Decision-Making Authority Matrix — Lantern
Effective Date: 2026-01-09
Status: Constitutional Document (requires 75% employee vote to amend)
Purpose
This document establishes who can make which decisions at Lantern. It ensures that:
- Only employees have decision-making authority
- Non-employees (lenders, advisors, contractors) have zero decision-making power
- Decision authority is clear, transparent, and democratically governed
Core Principle: Employees Decide Everything
Who Can Make Decisions?
✅ Employee-owners ONLY (worker cooperative members or ESOP participants)
Who CANNOT Make Decisions?
❌ Lenders (including anyone who has provided loans to the company)
❌ Advisors (even if they provide valuable guidance)
❌ Contractors or consultants (even if long-term)
❌ Former employees (unless they retain employee-owner status per bylaws)
❌ Family, friends, or investors (regardless of relationship)
❌ Board members who are not current employees (except Stewardship Board veto on mission-critical items)
Decision Categories & Authority Levels
Level 1: Constitutional Decisions (75% Supermajority Required)
Definition: Decisions that affect ownership structure, mission, or foundational governance.
Who decides: All employee-owners vote; requires 75% approval
Examples:
- Amending articles of incorporation or bylaws
- Changing the company mission or core values
- Adding or removing employee rights from the Employee Rights Charter
- Accepting equity investment or granting voting shares to non-employees
- Mergers, acquisitions, or sale of substantially all assets
- Dissolving the company
- Taking loans exceeding 100,000 or 2× annual revenue
- Converting loans to equity
- Granting board seats to non-employees
- Changing the 3× salary cap ratio
- Modifying profit-sharing formula
- Implementing layoffs (except when runway < 6 months)
Voting process:
- Any employee-owner can propose
- 30-day review and discussion period
- Anonymous voting via secure platform
- 75% of all employee-owners must approve (not just those who vote)
Non-employee involvement: Information only; no voting rights
Level 2: Major Operational Decisions (Majority Vote Required)
Definition: Significant operational changes that affect all employees or company direction.
Who decides: All employee-owners vote; requires >50% approval
Examples:
- Hiring C-level executives or senior leadership
- Changing compensation structures or salary bands
- Major product pivots or new product lines
- Opening new offices or geographic expansion
- Marketing budget allocation above certain threshold (e.g., >50,000)
- Benefits package changes
- Work policies (remote vs. office, work hours, meeting culture)
- Annual budget approval
- Profit distribution timing and amounts
- Hiring decisions for roles that affect team dynamics
Voting process:
- Proposed by any employee-owner or designated role (e.g., CEO)
- 14-day review period
- Majority vote (>50% of votes cast; minimum quorum of 60% employee participation)
Non-employee involvement: May provide input if requested; no voting rights
Level 3: Delegated Authority (Role-Based)
Definition: Day-to-day decisions within a defined scope assigned to specific roles.
Who decides: Employee-owner in designated role
Examples:
CEO/Acting CTO (Mechelle)
- Tech stack and architecture decisions
- Contractor hiring for specific projects
- Weekly priorities and sprint planning
- Customer support policies
- Third-party tool selection (within budget)
- Product feature prioritization (non-pivot)
COO (Alexx)
- Operational workflows and processes
- Vendor selection (within budget)
- Day-to-day scheduling and coordination
- Team communication tools and practices
CTO (when hired)
- Engineering hiring (with team input)
- Code review standards and practices
- Infrastructure and deployment decisions
- Security implementations (within compliance requirements)
CGO / Stephen (Chief Growth Officer)
- Growth experiment design and execution
- Partnership outreach and negotiation (final terms require vote)
- Marketing campaign tactics (within approved budget)
- User research and testing priorities
CMO / Pallavi (Chief Marketing Officer)
- Brand messaging and positioning
- Content strategy and calendar
- Social media and community management
- Creative direction and design choices (within brand guidelines)
Constraints:
- Must operate within approved budgets
- Transparency required: decisions logged and accessible to all employees
- Any employee can challenge a decision and call for a review vote
- Cannot contradict employee-voted policies or constitutional documents
Non-employee involvement: None; they may provide specialized advice if requested, but decision remains with employee
Level 4: Consensus or Committee Decisions
Definition: Decisions that benefit from collaborative input from affected employees.
Who decides: Relevant employee committee or working group; consensus preferred, majority vote if needed
Examples:
- Hiring decisions for team roles (team members vote together)
- Feature specifications for specific products (product team consensus)
- Design system updates (design + engineering consensus)
- Internal tooling choices (engineering team consensus)
- Event planning (events committee)
- Onboarding process (HR/operations committee)
Process:
- Committee or working group discusses and seeks consensus
- If consensus not reached, committee votes (majority required)
- Outcome communicated to all employees for transparency
- Any employee can escalate to full employee vote if concerns arise
Non-employee involvement: None
Decision Escalation Process
Any employee can escalate a decision to a higher level if they believe:
- The decision exceeds the delegated authority
- The decision violates company values or mission
- The decision affects all employees and should be voted on
- The decision creates risk (financial, legal, reputational)
Escalation steps:
- Employee raises concern in transparent internal channel
- Designated neutral facilitator (rotating role) reviews concern
- If valid, decision is paused pending review
- Higher authority level votes on decision (e.g., delegated → majority vote)
- Final decision is binding and documented
Stewardship Board Role (Limited Veto Power)
The Stewardship Board is NOT a decision-making body. It is a mission protection entity with limited veto power.
Stewardship Board Composition
- 3–7 independent trustees (not employees, not lenders)
- Expertise: corporate law, cooperative governance, mission-aligned advisors
- Appointed by employee vote; 3-year rotating terms
- Trustees cannot be:
- Current or former lenders
- Competitors or conflicted parties
- Family members of employees (to avoid bias)
Stewardship Board Powers (Veto Only)
✅ CAN veto:
- Loan agreements that threaten employee control (e.g., equity conversion clauses without proper safeguards)
- Decisions that violate the stated mission (e.g., selling user data, abandoning privacy-first principles)
- Amendments to governance documents that weaken mission protections
- Mergers or acquisitions that would end employee ownership
❌ CANNOT:
- Initiate decisions
- Vote on operational or strategic matters
- Override employee votes on non-mission-critical issues
- Hire, fire, or manage employees
- Control finances or budgets
Veto process:
- Stewardship Board reviews employee-approved decision
- If veto needed, Board must provide written justification citing specific mission violation
- Employees can override veto with 80% supermajority vote
- Veto decisions are public and documented
Purpose: The Stewardship Board protects the mission from being undermined, even by well-meaning employees under financial pressure. It is a safeguard, not a power structure.
Non-Employee Participation (Strictly Limited)
Advisors
- Role: Provide expertise and guidance when requested
- Authority: Zero decision-making power
- Compensation: Hourly consulting fees or stipends (no equity, no profit sharing)
- Engagement: Project-based or retainer; terminated at will by employees
- Restrictions: Cannot vote, cannot attend governance meetings, cannot access employee-only information
Contractors
- Role: Provide specialized services (e.g., design, copywriting, legal)
- Authority: Zero decision-making power
- Scope: Execute defined tasks; cannot set strategy or priorities
- Restrictions: Cannot vote, cannot participate in governance, cannot influence hiring or firing
Lenders
- Role: Provide capital via loans (see Shareholder-Lender Framework)
- Authority: Zero decision-making power
- Rights: Financial transparency (quarterly reports), repayment updates
- Restrictions: Cannot vote, cannot demand changes to business strategy, cannot attend employee meetings
Legal Counsel
- Role: Provide legal advice and ensure compliance
- Authority: Advisory only; cannot make legal decisions for the company
- Employee oversight: Employees decide whether to follow legal advice
- Restrictions: Attorney-client privilege applies; cannot share employee information without consent
Key Principle: Non-employees can provide VALUE (advice, services, capital), but they cannot exercise POWER (decisions, votes, control).
Emergency Decision-Making
In rare emergencies where immediate action is required and employee vote is not feasible (e.g., server outage, security breach, legal deadline):
Emergency Authority
- CEO or designated role can make emergency decision
- Scope: Limited to immediate crisis resolution
- Notification: All employees notified within 24 hours
- Ratification: Decision must be ratified by employee vote within 7 days or reversed
Examples of Emergencies
- Critical security vulnerability requiring immediate patch
- Legal compliance deadline (e.g., GDPR data request)
- Server failure requiring urgent infrastructure change
- Immediate financial crisis (e.g., bank account frozen)
Examples of NON-Emergencies (Cannot Use Emergency Authority)
- Hiring decisions
- Product feature launches
- Partnership agreements
- Budget reallocations
Abuse of emergency authority: Results in internal investigation and potential termination.
Decision Transparency & Documentation
All decisions (except confidential personnel matters) must be:
- Documented: Written record of decision, rationale, and outcome
- Accessible: Available to all employees in shared knowledge base
- Timestamped: Date and decision-maker(s) logged
- Categorized: Linked to appropriate authority level
Confidential decisions (e.g., individual performance reviews, salary negotiations):
- Limited to relevant employees and HR/manager
- Principles and outcomes aggregated and shared anonymously
- No hidden decisions that affect company strategy
Decision Review & Appeals
Annual Governance Review
- All employees review decision-making authority matrix annually
- Propose amendments to improve clarity or address gaps
- Vote on amendments (75% required for constitutional changes)
Individual Decision Appeals
- Any employee can appeal a decision within 30 days
- Appeals reviewed by rotating employee committee (3–5 members)
- Committee can:
- Uphold decision
- Reverse decision
- Escalate to full employee vote
- Appeal outcome is final and documented
Comparison: Lantern vs. Traditional Company
| Decision Type | Traditional Company | Lantern (Employee-Owned) |
|---|---|---|
| Strategy | CEO or board of directors (often investors) | Employee majority vote |
| Hiring | Managers or HR | Employee vote (senior roles) or delegated authority (team roles) |
| Compensation | Executives or board | Employee-voted structure (3× cap) |
| Product | Product managers or executives | Delegated to product role; escalates to employee vote if pivot |
| Funding | Board approves equity deals | Employee 75% vote; lenders have no say |
| Mergers | Board and shareholders vote (investors control) | Employee 75% vote + Stewardship Board veto |
| Layoffs | Executive decision | Employee 75% vote (only if runway < 6 months) |
| Mission changes | CEO or board | Employee 75% vote + Stewardship Board veto |
Enforcement
Violations
If anyone (employee or non-employee) attempts to make a decision outside their authority:
For employees:
- Internal investigation by rotating employee committee
- Decision reversed if improper
- Remediation: training, clarification, or discipline
- Repeated violations: termination via employee vote
For non-employees:
- Immediate notification to all employees
- Relationship terminated (advisor, contractor) or loan accelerated (lender)
- Legal action if necessary
Whistleblower Protection
- Employees who report authority violations are protected from retaliation
- Anonymous reporting available
- Retaliation results in termination
FAQs
Q: Can a non-employee advisor attend an employee governance meeting?
A: Only if explicitly invited for a specific topic (e.g., legal advice) and only during that portion of the meeting. They must leave before any votes.
Q: What if we hire a contractor for 2 years? Do they become an employee-owner?
A: No. Contractors remain contractors unless they are formally hired as employees and granted employee-owner status per the Employee Rights Charter.
Q: Can a lender demand to see our product roadmap or financials?
A: Lenders receive quarterly financial summaries (revenue, expenses, runway) per the Shareholder-Lender Framework. Product roadmaps and strategy are employee-only unless we choose to share.
Q: What if an employee wants to delegate their vote to another employee?
A: Proxy voting is allowed only for operational decisions (Level 2). Constitutional decisions (Level 1) require direct individual votes. Proxies must be documented.
Q: Can we hire a non-employee CEO?
A: Only if employees vote (75%) to grant that person employee-owner status. A CEO who is not an employee-owner cannot make constitutional decisions.
Q: What if the Stewardship Board vetoes something employees strongly support?
A: Employees can override the veto with an 80% supermajority vote. This high threshold ensures mission protection while allowing employees to make final decisions.
Related Documents
- Shareholder-Lender Framework — Lenders have zero decision-making power
- Employee Rights Charter — Constitutional rights for employee-owners
- Governance & Ownership — Legal structures and mission protections
- Anti-Greed Safeguards — Protections against mission drift
Amendment Process
This matrix is a constitutional document:
- Requires 75% employee-owner vote to amend
- Annual review during employee governance meeting
- Amendments proposed with 30-day review period
- Anonymous voting required
Summary
Decision-making at Lantern is simple:
- Employees decide everything
- Non-employees (lenders, advisors, contractors) decide nothing
- Transparency and democratic governance are non-negotiable
If there is ever ambiguity about who can make a decision, default to employee vote. When in doubt, ask all employee-owners.