Years ago I went freelance. I was good at staying busy, but two things stressed me out almost immediately: health insurance was expensive and weird to navigate solo, and collaborating with other independents on larger engagements required a lot of informal trust and handshake agreements. There was no shared infrastructure.
What I wanted was the advantages of being part of a company: a brand, shared tooling, client credibility, benefits. But without the permanence of employment. Not a traditional firm. Not a co-op exactly. Something looser.
So I did what I always did when I was trying to think something through: I built a slide deck. You can see it here.
The result was what I called the Open Corporation. The governance model underneath holds up, and I thought about it again recently when I noticed how fast the consulting collective pattern has spread. LinkedIn profiles mentioning “fractional leadership” went from about 2,000 in 2022 to over 110,000 in 2024. The trend arrived. The structural problems I was trying to solve in 2015 are the same ones people are running into now.
The Core Idea
The Open Corporation is a company where all members are shareholders, anyone can join or leave at any time, and the company takes a cut of revenue to fund its own operations. It is not a traditional employer. It is more like a persistent brand and administrative shell that consultants operate under.
The founding principles were simple:
- Anyone can join or leave at any time (with constraints on how that works in practice)
- The corporation takes a percentage of member revenue for operating costs
- All members are shareholders
- There is an elected president who handles operations and can spend company funds
- Governance happens monthly via elections
The interesting parts are not the obvious ones. Let me walk through the three pieces I think matter most.
The Part-Time Rotating President
Consulting collectives have a classic failure mode: nobody focuses on the company itself. Client work is always more urgent and more billable. So the website goes stale, the taxes are filed late, the contracts never get standardized, and the whole thing slowly stops functioning.
The Open Corp model solves this by making operational responsibility into an elected position with a stipend.
The President is elected monthly, with implied re-election if voter participation drops below 60%. They receive a monthly stipend drawn from company funds, pegged to stay slightly above the highest-paid manager (more on managers below) to keep the incentive real. Their job is to handle the things that need to be operationalized: keeping the website current, filing the corporate taxes, managing expenses, running elections, authorizing spending.
Their authority is bounded. They can modify the mission statement and spend within limits. They cannot change their own salary or the rules around voting without a supermajority vote. They can ban a member (the member’s shares still reduce at the normal pace, covered in the next section).
The point is: someone is accountable for the company itself, they are compensated for it, and the role rotates. A member who has a slow quarter might want to take the President role. Someone growing fast with client work can pass it off. No single person is permanently stuck with the administrative overhead.
Operating Cost Collection
The company needs money to exist. Taxes, incorporation costs, the website, the President’s stipend. Most consulting collective attempts I have seen ignore this entirely until it becomes a crisis.
The Open Corp model handles this with a flat percentage taken off the top of member revenue. The original design set this at 5%, adjustable by the President within limits. The percentage funds all operating costs. If the company grows and generates enough surplus, that becomes the vehicle for providing benefits at scale.
This sounds obvious, but it is not. Most people trying to build cooperative structures assume the operational costs will just work themselves out, or that everyone will contribute informally. They do not, and they will not. Naming the number and building it into the structure upfront is the difference between a real company and an informal network that eventually dissolves.
Graduated Ownership
The hardest governance problem in a company with fluid membership is what happens to shares when people join and leave.
If new members get full ownership immediately, it creates an incentive to join right before a profitable period and exit right after. If departing members lose their shares instantly, it punishes people who built the company for years when they want to step back or leave temporarily.
The Open Corp model uses graduated transitions in both directions.
On joining: the first month, no shares. The second month, a normal share allocation with a contribution requirement. Ongoing, a fixed number of shares per month of continued membership.
On leaving: shares reduce at three times the rate they were gained. So if you spent years building equity, it does not disappear overnight, but it does clear out on a defined schedule. You do not leave and maintain a permanent claim on governance or profits indefinitely.
This solves both problems. It discourages gaming the entry timing, gives departing members a fair wind-down, and keeps the active membership actually driving governance.
Scaling to Management
The original design also included a manager tier for companies that grew beyond eight members.
Managers are elected rather than appointed, and only after they declare both who they intend to manage and a department name. The election requires 60% participation from the people who would be managed, and 60% in favor. Managers receive a monthly stipend from company funds, scaled by the number of management layers below them.
I am less certain the specific numbers here are right. But the structural principle holds: management is legitimized by the people being managed, not just declared from above.
Where This Stands
The specific numbers were educated guesses. The 5% operating cut, the exact share schedule, the stipend formula: a real implementation would need to calibrate all of those to the size and economics of the specific collective. But the structural ideas hold, because the failure modes they address are real and I have watched them kill otherwise good attempts.
Two things have changed since 2015. The tooling to run this now exists — monthly elections, transparent share tracking, shared invoicing and expense management are all buildable today on off-the-shelf infrastructure. And AI is starting to handle the administrative overhead that used to justify having a firm in the first place: proposals, intake, contract templates, tracking. A collective with a working AI control plane can now punch above its organizational weight class in ways that were not possible a decade ago. The structural case for the model just got stronger.
If you are thinking about a consulting collective, the original slide deck is below. The design is a product of its time. The governance model is not.
Open Corporation Manifesto (PDF)
AI Attribution