Governance
A Template for the 21st Century

In the Second Dimension, all organisations, irrespective of their purpose (government, business, social, or scientific), will be treated equally in terms of taxation and status before the law. This is an important deviation from current practice, where organisations exist under very different regulations, depending on whether they are for-profit or non-profit, trusts or corporations, public or private. The fundamental idea driving this “normalisation” of social enterprises is that all organisations, irrespective of their composition, size, or funding structure, must share the same goal, namely the betterment of all of life’s constituents, including all strata of society, all communities and individuals, and the environment. Though ambitious, this inclusivity must be enshrined in the mission and vision statements of all organisations, and carried out in their daily operations. It must also be measurable according to transparent, objective, quantitative criteria, so that all organisations can be evaluated on the impact they have on society and nature. 

For government organisations, impact must be defined as the number of citizens they serve, while performance must be a measure of their ability to uphold and extend rights and freedoms. Guaranteeing and managing the (enhanced) rights and freedoms of its citizens will remain the overriding responsibility of government at every level.

For all other organisations, the determination of impact will be based on a combination of size (revenues or budget) and staffing level. Below is a tabulation of impact levels that includes enterprises from all spheres of professional activity, including private businesses, social enterprises, and scientific/academic institutions, shown alongside governance institutions of similar impact. Their level can be equated by realising, for example, that a large private company with thousands of employees can have the same impact on economic and social welfare as an Area government, or, for that matter, a well-respected news network with high visibility. However, there is no equivalency between governance and other spheres of activity at levels above 5, as no business can be said to have the same impact as a governance institution of national or international scale.

Level 

Example from Governance

Leader

Example from Other Sectors 

Leader

20

Local library

Chief Librarian

Company, branch or franchise with <10 employees

CEO/MD

19

Local fire dept.

Fire Chief

Policy think-tank

Director

18

Local school

Principal

Department/faculty of a university

Head of Department

17

Community arbitration court

Chief Arbitrator

Company with about 100 employees

CEO/MD

16

Community registry

Registrar

Large museum

Director

15

Community

Community Leader

Company with >1000 employees

CEO/MD

14

Area-level police force

Police Chief

Daily newspaper

Editor in Chief

13

Area-level hospital

Hospital Director

Large NGO

CEO/MD

12

Area-level Dept. of Public Works

Chief of Public Works

Finance dept. of a mid-sized company

CFO

11

Area-level judicial court

Judge

University

Chancellor

10

Area

Area Manager

Enterprise with at least $10 billion in revenues, and/or 10,000 employees

CEO/MD

9

Regional transportation board

Transport Commissioner

International sporting federation (FIFA, IOC, etc.)

President

8

Regional dept. of agriculture

Agriculture Commissioner

Technology dept. of a large company

CTO

7

Regional tax authority

Revenue Chief

Enterprise with at least $25 billion in revenues, and/or 25,000 employees

CEO/MD

6

Appellate court

Judge

Enterprise with at least $50 billion in revenues, and/or 50,000 employees

CEO/MD

5

Region

Regional Governor

Enterprise with at least $100 billion in revenues, and/or 100,000 employees

CEO/MD

4

National parks, forests and agriculture

Minister for the Environment

--

--

3

National defence

Commander in Chief

--

--

2

National government

Head of State

--

--

1

Continental / global government

 

--

--

The only way to ensure that complex organisations (governmental or otherwise) will deliver on their goals is for their leaders to be selected on the basis of demonstrated skills and experience, and held accountable by way of measurable results. They should not be chosen for their likability or because they are good at tweeting or giving divisive speeches, or for their ability to crush dissent within their own party, but by their ability to improve the lives of those they govern. The meritocratic nature of the new democracy will be guaranteed through the use of a sophisticated, transparent, quantitative tool to evaluate the year-on-year performance of leaders and, by extension, their suitability for even higher positions of authority to which they may aspire. As we shall see shortly, this tool is a balanced scorecard whose basic building blocks are the rights and freedoms that each level of government is expected to deliver to its citizens. It is the critical component in the machinery of the new democracy because it ensures that leaders at every level are perfectly qualified to fulfil their managerial responsibilities, and that their qualifications are proven by a track record of successful governance.

A convenient outcome of this system is that leadership would be fungible. In other words, the system allows for, and encourages, leaders to be engaged in both public governance and what we currently call private enterprise. The underlying assumption is that good leaders can flourish in any type of organisation. The best leaders are usually men and women capable of a vision greater than narrowly-defined economic profit. Given the right level of autonomy, a clear mandate, control over their own tenure, and the recognition and respect of the public, most experienced, successful leaders would probably opt in favour of positions that have a significant impact on society and a wider social and ecological utility over ones that are merely profitable.

Governance Evaluated: The Scorecard

Below is an example of what could be a Community Leader’s scorecard in the Second Dimension. At first glance it may seem daunting because it is long and contains many indicators. Governance is a complex undertaking, especially in the sophisticated and highly structured societies of our time, so unfortunately it requires an equally elaborate measuring mechanism. In essence, the Community Leader’s performance is being measured according to specific criteria in ten areas: 

Citizen services (including employment and welfare)

Education

Environment

Finance and economic development

Health

Housing and property development

Leisure, culture and tourism

Public works

Safety and justice

Transport

Under each of these headings there are indicators chosen by the Scorecard Development Authority of the Area where this Community is located. The Authority selects these indicators based on an assessment of what improvements the Community needs most urgently, and it sets a five-year target for those improvements. For example, in the very first line item, it has recommended that the Community should reduce the proportion of disadvantaged population (those receiving welfare support) from 18% to 3% within five years, which is equivalent to an improvement of 3 percentage points per year. This is an ambitious target, and judging from the high number of points at stake for achieving this goal (shown in the last column), it is a high priority.

Community Leader's Scorecard

It’s important to understand that each scorecard would be different. While the health of every Community would be measured in the same ten general areas of concern, individual line items and target values could differ greatly, for the simple reason that different Communities have significantly different needs at different times. For example, the scorecard above is intended for a community in a fairly advanced, developed country. You will notice that there are no points awarded for adequate delivery of basic services like water, sewage removal, electricity and gas, telephony, etc., presumably because the entire population already enjoys those services. For a community in rural Niger, on the other hand, this might be quite different. Only a minority of its citizens might have piped water and electricity supply, and in that case the Scorecard Development Authority would prioritise the delivery of basic services and the development of infrastructure over other needs. Accordingly, it might award points for the extension of sewage, water, communications and electrical systems to an increasing proportion of the population, while delaying the introduction of more sophisticated indicators until these fundamental services are well established.

Each scorecard is also a dynamic tool in that it changes from year to year in at least two ways. First, targets for each indicator may be revised every year, depending on the new baseline, the needs of the community, or the availability of new information or new technology. For example, if the Community is making progress toward its five-year target much faster or much slower than expected, the Authority may decide to adjust it.

Second, when a Leader has achieved a five-year target for a particular indicator, the Authority will either set a new target value or replace that line item altogether with a new indicator that reflects the Community’s more advanced status. In the previous example of a poor community in Niger that provides running water to only a few citizens, the priority would be to extend the provision of piped water to all households. Once that is achieved, the corresponding indicator (percentage improvement in the number of households served by the water supply system) would be changed to something more advanced, such as the quality of the water supply measured by how much water is wasted in leakage, or by the microbial purity of the water itself. 

The changing nature of the scorecard means that, over the course of several years, a Community Leader, and therefore the Community he represents, will transition through several increasingly sophisticated scorecards that include more Third Dimension ideals. The continuing refinement of each scorecard will help to maintain the Leader’s focus on the ultimate goal of governance—the achievement of a healthy, prosperous society.

The transaction cost of such a system would be high. It would require a Scorecard Development Authority and a Scorecard Auditing & Evaluation Authority at each higher level of governance (Area, Region, Nation), a veritable army of analysts, statisticians, auditors and assessors, and an elaborate machinery to manage these complex and detailed evaluation efforts. This cost, however, pales in comparison to the cost of poor governance.

Finally, there is one more item on the Community Leader’s scorecard that needs explanation. At the very end of the scorecard is an item labelled “Constituency” that carries a heavy point value, amounting to about 15% of the overall score. This line item reflects the Community’s overall satisfaction or appreciation of the Community Leader’s work as expressed in an annual survey administered to a sizeable sample of the population. This very generalised indicator is essentially a corrective measure. It ensures that whatever measures a Leader takes to achieve the required goals do not cause undue hardship to the Community.

Imagine for a moment that a Community Leader must work hard to reduce traffic congestion in his city. It is a pressing problem, and therefore the weight of that line item on his scorecard is substantial. He could, in theory, achieve the required target quickly by enforcing draconian measures like banning vehicles from most roads, imposing extremely high vehicle registration fees, introducing exorbitant road tolls, and so forth. Such measures would help him to quickly reach the required target, but doing so would cause considerable hardship to many of the Community’s residents. Causing such sudden hardship for the Community would probably result in a low appreciation or “Constituency” score (item 11.1 in the scorecard), which would bring the Leader’s overall score down. This built-in check forces the Leader to opt for innovative solutions to the traffic problem that not only achieve the desired objective (traffic mitigation) but also prove popular with residents. In this case, it might mean improvements in public transport facilities, construction of pedestrian and bike lanes, launch of vehicle sharing programmes, design and implementation of alternative routing, and so forth.

Scorecards at Area and Regional Levels

Now, what about administrators operating at higher levels, such as Area Managers, Regional Governors and the Head of State himself? They, too, would be held accountable for their effort in delivering the full spectrum of rights and freedoms to their areas of jurisdiction. Some responsibilities necessarily fall outside the purview of a Community Leader and are assigned to the Area Manager above him, or even higher in the hierarchy of governance. Indicators for which an Area Manager is directly accountable would feature in his scorecard and would have five-year targets as well, as shown in the sample scorecard below:

Area Manager's Scorecard

What is apparent immediately is that the Area Manager’s scorecard is shorter and simpler than the Community Leader’s. Indeed, under each of the ten headings there are only a handful of indicators. This is because many of the citizens’ needs have been addressed at the level of governance closest to them—the Community level. Only Area-level services make an appearance in the Area Manager’s scorecard. For example, the quality of primary and secondary education is already evaluated in the Community-level scorecard, but tertiary education (universities, technical institutes, vocational schools) is an Area-level responsibility for which the Area Manager is accountable.

In addition to KPIs for which he is directly responsible, the Area Manager’s scorecard also takes into consideration the scores from the Community Leaders under him. Indeed, this line item (11.1 Community Scores) makes up the bulk of his overall score—300 points out of 470. This score is simply the average score of all the individual scores that Community Leaders in his Area have achieved for that particular year. Rather than delivering certain rights and freedoms to citizens himself, then, the Area Manager becomes an organisational head whose responsibility is to supervise and support his 100 Community Leaders in a manner that allows them to achieve the highest possible score. The Regional Governor would similarly derive a large part of his performance score from the performance of his Area Managers, and so on up to the Head of State. This accumulation of scores is shown below.

The Area Manager has a vested interest, therefore, in supporting his subordinate Community Leaders in every way he can, monitoring their activities and intervening when he feels help is needed toward achievements of certain goals. He may channel technical, human or financial Area-level resources to a Community in need, for example. Or he may recommend to the Scorecard Development Authority a temporary adjustment to scorecard items that a Community Leader cannot meet due to unforeseen circumstances. Or he may push a Community to adopt measures that have been successful in other Communities.

The objective of this exercise is to carefully align interests across the entire governance hierarchy, so that the lowest organisations at the grassroots have the same goals as the highest level of leadership. And it should be the overriding goal of the high-level leadership to ensure that they support the lower tier of leadership to accomplish their goals. This kind of bottom-up approach will create an organisational environment that current political structures do not have and will resolve most of the paralytic inertia of governments throughout the world. 

A Scorecard for the Nation

At the very highest layer of authority, the level occupied by the Head of State, the criteria and methodology of evaluation would be no different. The Head of State in the new nation state is not a politician who attained that position on the strength of a protracted, expensive, and often divisive electoral process. Rather, he is a highly seasoned leader who is capable of consistently delivering outstanding results as a public administrator and who has risen through the hierarchy of governance (or, for that matter, the hierarchy of private enterprise). At each stage of his career, this exemplary administrator must have demonstrated exceptional skill by consistently achieving high scores. In the beginning, when he first became Leader of his Community, he must have won a popular election on the basis of his skill as a campaigner and his ability to address his Community’s concerns—much like a First Dimension politician. Thereafter, however, he must have risen through the ranks of the Second Dimension’s governance hierarchy by excelling as an administrator at each level. Remember that candidates for positions like Area Manager, Regional Governor and Head of State are elected by their peers, rather than by the general population, on the basis of strict selection criteria. Only administrators with consistently high scores (90%+ for two consecutive years) are eligible for candidacy.

The Head of State’s tenure will continue for as long as he can maintain a high score for the entire nation. Like all administrators below him, she is required to achieve a 90% score every year to extend her tenure automatically. Her scorecard will contain a few indicators for which she is directly accountable, relating to responsibilities of national concern, such as national defence, monetary policy, foreign policy and trade alliances, etc. For the most part, however, it consists of the aggregated scores of all the Regional Governors below her, which in turn consist largely of the aggregated scores of all the Area Managers below them, and so on down the line. To ensure her continued tenure, her first duty will be to counsel, encourage, support, and monitor the performance of her Governors and Managers, and intervene quickly and effectively in situations where a subordinate’s score is under threat. In other words, in situations where the rights and freedoms of the nation’s citizens are not being upheld.

The Head of State’s personal score, therefore, becomes an overall assessment of the health of the nation, as measured by the degree to which Second Dimension and Third Dimension rights and freedoms are being developed and maintained. The Head of State’s score is thus also the nation’s score. 

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