[EM] working paper on delegable proxy voting

[Abd ul-Rahman Lomax]

At 12:01 AM 11/14/2005, James Green-Armytage wrote:
>• Issue independence: Even when there are multiple issues on the same
>ballot, I should have the option of indicating separate proxies for
>separate issues, while still voting directly on other issues, if I choose.

James is one of the delegable proxy pioneers, 
along with myself, Mikael Nordfors, and the guy 
who came up with "Liquid Democracy," whose name 
escapes me at the moment (possibly because he has 
to some degree disowned it?) I'd be interested to 
know of any other early writers on the subject. 
(Anything during or before 2002 is of interest; 
my own concepts go back to the 1980s, but I don't 
have written evidence and I was not actively promoting the ideas.)

It appears that delegable proxy was independently 
invented in at least three or four different places.

Having said that, and noting that I agree with 
nearly everything James wrote in the paper he posted, I here disagree.

The whole point of a proxy is to represent a 
person to an organization. Issues will arise at 
meetings that could not be anticipated; the proxy 
acts in one's absence. Corporate proxies function 
in this way. Yes, with *different* organizations, 
one can and people do appoint different proxies. 
Within one organization, however, setting up 
alternate proxies demolishes the simplicity of 
single proxy designation, and it vastly confuses 
delegability. I'm not denying that somewhere, 
sometime, this might be a good idea, but it is 
going to be quite enough of a task to get the 
relatively simple concept of single delegable 
proxy implemented. If there is a need, delegable 
proxy organizations will be, I believe, quite 
readily amendable. This is part of the concept, 
indeed: delegable proxy is, among other things, 
an idea-collection network, where ideas are filtered by friendly filters.

So I *highly* recommend starting with single 
delegable proxy. Any issue where the member 
thinks his or her position is sufficiently 
different from the routine proxy's position, and 
if the member thinks it important, the member can 
always participate directly, and if some issue 
needs to be presented at a higher level for which 
the member does not enjoy full participation 
rights, parallel representation, informally, will 
be easy. And the informal rep would simply advise 
the member, if needed, to vote directly when a vote comes up.

But I don't think that will be necessary very 
often. I think people will largely let their 
single proxy handle the business unless they have 
a personal and special interest, in which case 
they will participate more directly.

An important key here is the separation of voting 
rights and discussion rights. In an FA/DP 
organization (FA stands for Free Association) 
members always have the right to vote directly 
(just as with corporate proxies, and subject only 
to practical limitations), but they do not 
necessarily have the power to grab everyone's 
attention. In a very large organization, there 
would be, I would presume, a basic organization 
mailing list, to which every interested member 
could subscribe who wanted to follow the central 
activities of the organization. But that list 
would have different classes of membership. Some 
members would have the right to post directly, 
others would have to have posts approved. Note 
that any member who has direct posting rights can 
effectively approve messages even if not a 
moderator, simply by forwarding them to the list. 
In a DP organization, a proxy level (number of 
people represented, directly or indirectly) might 
be a simple way to determine who gets full rights.

But FA/DP organizations would not start with 
restricted lists. They would start, I assume, 
with open lists, and restrictions would only come 
into use when traffic began to exceed what a 
majority of members considered acceptable. And 
there is a great deal of thought that has been 
put into these ideas, but I won't repeat it here.....

Unlike other representative organizations, 
though, restriction of participation does *not* 
bring with it restriction of the right of 
decision. There is good reason to restrict full 
participation in large organizations; the 
problems of intractable meetings are the reason 
why New England towns abandoned Town Meeting when 
they grew large enough; but this rationale does 
not apply to voting rights, and *especially* it 
does not apply when the internet makes it 
possible for large numbers to follow a debate and 
form intelligent opinions about it, and to 
participate in polls. As to the argument that 
many or most voters are not qualified to make 
decisions on public issues, I respond that this 
may be true; however, first of all, people, when 
they can easily find good information, make much 
better decisions than we might think, and, 
secondly, the question is *who* decides who is qualified and who is not?

I submit that if we want a democracy, the one who 
decides is the voter himself or herself. Under 
delegable proxy, the voter either participates 
directly, or leaves it to a trusted proxy. And if 
that proxy, again, considers himself 
insufficiently informed, or is otherwise unable 
to participate, then there is the next level proxy....

I'd suggest keeping that very simple. If it is 
simple, it does not take complicated software to 
keep track of proxies, and while there may be a 
central database, the real proxy system is 
intangible, in the relationships between members, 
who can recreate the whole structure quickly even 
if the central site disappears or is hijacked. 
Organizations often lose their way because 
gatekeepers pursue their own interests.

And then:

>If corporations were required to allow for delegable
>proxy voting, then I as a small stockholder could potentially delegate my
>votes to nonprofit organizations that shared my values with regard to
>corporate policy.

You can do this now. Without delegable proxy, it 
is only slightly more complicated.

If I understand correctly, a shareholder can 
designate *anyone* as proxy. It may even be 
possible, correct me if I am wrong, to designate 
a corporation, a legal person, as proxy, in which 
case the legal representative of the corporation is the effective proxy.

So I think you can do this now. Even if the rules 
require a person (not a corporation) to be named, 
one would simply name the person recommended by 
the nonprofit. I don't think that the proxy must 
be himself or herself a shareholder. That proxy 
has the right to attend and vote simply by holding a proxy.

Another writer seems to have misunderstood this 
proposal. There was no proposal that a nonprofit, 
or any other organization, represent shareholders 
who have not chosen to permit or implement this. 
If I want to delegate my proxy for shares in 
Microsoft to, say, a nonprofit organization 
promoting open source software, that is and 
should be my absolute right. This takes nothing 
away from any other shareholder; essentially, if 
you think that this is foolish, fine. You don't 
do it. It's my money at risk from owning the 
shares, and so it is my right to participate as I 
choose, just as it is yours to do likewise.

There is no need for changes at law. Shareholders 
interested in delegable proxy can simply form an 
independent association to create the structure, 
and that association can recommend to members 
whom to designate as corporate proxy. Delegable 
proxy organizations, theoretically, should be 
highly efficient and so the organizational 
overhead for doing this should be trivial. All it 
would take is a few shareholders interested in 
making it easier for themselves to be effectively 
represented at the annual meeting.

Large institutional shareholders already hire 
proxy firms which do exactly that. FA/DP 
organizations of shareholders would make it 
possible for small shareholders to exercise 
similar power, for, collectively, they do have 
the resources; the trick is to coordinate those 
resources without creating a serious 
organizational burden (which would defeat the 
purpose). And there is no intrinsic conflict of 
interest between large institutional shareholders 
and small shareholders, so they might share 
resources, a possibility which could benefit both.

I think that as soon as one such organization 
exists for shareholders in a major corporation, 
it will be successful, and it will be 
imitated.... this is one of the possible 
implementation paths I see for delegable proxy.

*It is not necessary to change the laws, nor the corporate rules.*

But if changes do become necessary, such 
organizations could rather easily develop the 
power to cause them to be implemented. The power 
is in the hands of the shareholders *already*, 
but they keep expecting the cart to lead the way.