nikosophia

Foundations

Nikosophia applies ideas from law, governance and logic about how a company is owned and accounted for.

Three processes

A shipping company is constituted before it operates, and then runs two kinds of operation.

Constituting the company is setting down what it is accountable for: which duties it carries, how each one is to be met, and who is responsible for it. In most companies that list is scattered across the articles, a policy manual, job descriptions and habit. In a Nikosophia system the owner, working with our analysts, sets it down as one declaration, the company's constitution, which can be read in full, changed on the record, and handed on with the company.

Business operations run the ships: voyages, maintenance, crewing, chartering, and the daily work of keeping certificates current and records complete. Fiduciary operations are the work of accounting for them: knowing what the company owes and to whom, holding the people who run the ships to account, and reporting to regulators, lenders, insurers, charterers and the family.

Governance frameworks have long separated the two. Auditors describe the separation through the Three Lines Model, which sets operational management, the compliance function and internal audit apart from the governing body they report to. The ISM Code separates business and fiduciary operations too, by giving the Designated Person Ashore direct access to the highest level of management. Almost all the software in shipping serves business operations, and Nikosophia serves fiduciary operations.

Constitution, business operations and fiduciary operations You set down your rules, which form the constitution: what your company is, declared and built. The constitution sends policies and procedures and system configuration to both business operations and fiduciary operations. Fiduciary operations queries business operations for records and evidence, and sends filings, certificates and reports up to the board, family, lenders, insurers, charterers and regulators. Constituting Operating You, the owner your rules Constitution what your company is, declared and built Board, family, lenders, insurers, charterers, regulators policies and procedures system configuration filings, certificates, reports Business operations Running the ships Managers and crews Operational systems, such as OneOcean Fiduciary operations Accounting for the company Monitoring the business Reporting up queries records, evidence Constitution, business operations and fiduciary operations You set down your rules, which form the constitution: what your company is, declared and built. The constitution sends policies and procedures and system configuration to both business operations and fiduciary operations. Fiduciary operations queries business operations for records and evidence, and sends filings, certificates and reports to the board, family, lenders, insurers, charterers and regulators. You, the owner your rules Constitution what your company is, declared and built policies and procedures, system configuration Business operations Running the ships Managers and crews Operational systems, e.g. OneOcean queries records, evidence Fiduciary operations Accounting for the company Monitoring the business Reporting up filings, certificates, reports Board, family, lenders, insurers, charterers, regulators
The constitution produces the policies and procedures and the system configuration that both sides of the company work to. Fiduciary operations then draws records and evidence from business operations and reports up to your board, your family, your lenders and the regulators.

Rules

In most business software, the rules a company runs on are buried in program code or held as settings that anyone with access can change. Reading the rules as a whole, seeing what the rules said a year ago, or checking whether two of them contradict each other means going through the code or the settings one at a time.

In Nikosophia every rule is declared in the system, with the duty, the conditions under which it applies, the method chosen for meeting it, and who is responsible for it. Changing a rule changes the system, and the change is recorded with who made it and when. Business-rules work has treated rules this way for decades, and the Object Management Group's SBVR standard sets this approach out formally (OMG, 2019). Nikosophia takes one distinction from SBVR: where a record breaks a rule that records must satisfy, Nikosophia refuses the record, and where a record shows a duty undone, Nikosophia accepts the record and records a breach.

Duties

A duty is always owed to someone. Wesley Hohfeld set this out a century ago: every legal relation has a party who bears it, a party it is owed to, and an act between them, and every duty has a matching right on the other side (Hohfeld, 1913, 1917). Every rule in Nikosophia names the party who bears the duty, the party it is owed to, and the act.

So for every duty in your Nikosophia system you can see who bears it, who it is owed to and what is owed, whether the other party is a regulator, a lender, a charterer or the board.

The shape of a duty A duty has a party who bears it, an act, and a party it is owed to, who holds the matching right. For example, your company must surrender allowances to the administering authority. Bears it your company The act surrender allowances Owed to the authority a duty the matching right: the authority can require the surrender

Coherence

Nikosophia checks rules against one another before your Nikosophia system is built. If two rules can apply to the same case and demand incompatible acts, the owner declares which takes precedence, and until the precedence is declared, the build stops and names the two rules. A rule written for a specific case is applied ahead of the general rule it narrows.

Nikosophia refuses rules in which each holds only if the other does not (A unless B, B unless A), because they have no single answer (Apt, Blair and Walker, 1988). Nikosophia reports a condition whose inputs are missing as undecided, and names the record the condition needs (Van Gelder, Ross and Schlipf, 1991). The nearest published work on checking rules before any process runs is by Governatori and Rotolo (2010), and on overlapping rules in decision tables by Calvanese and colleagues (2016).

Whether each rule states the law correctly is a separate question. Interpreting each regulation is our work. Our analysts tie each rule to the statute text it came from, and we sign off each rulebook before it reaches your Nikosophia system. Your Nikosophia system then holds your company to the result.

Two rules that can apply to the same case Rule A and Rule B each apply over a range of a field, such as gross tonnage. Where the ranges overlap, a case falls under both. If the two rules demand different acts and no precedence is declared, the build stops and names both rules. a field, e.g. gross tonnage Rule A Rule B both apply different demands, no precedence declared: the build stops and names both rules

Evidence

Evidence made at the time of the work, for the work, carries more weight than a file assembled later for an argument. That is why Nikosophia gathers the evidence against each duty as the work is done, and adds every change as a new entry, so the position on any past date can be shown as it stood.

Two properties are kept apart. A figure is reproducible when the same inputs always give the same answer and the path stays visible. It is correct when the method matches the regulation and a competent person stands behind it. A company needs both, and they come from different places: reproducibility from fixed arithmetic over versioned records, correctness from our interpretation of the law and from the person who signs.

A figure traced back to its source A figure in a filing traces to the calculation that produced it and the version of the rule and statutory factors it used, then to the confirmed records, then to the place on the page of the source document. A figure in a filing The calculation rule and factors, by version The confirmed records The page it came from

Composition

Your Nikosophia system is assembled from a written declaration of its parts. Each part states what it needs and what it provides. A composition engine called daedal assembles them.

Assembling the same parts in any order gives the same system (Douglas, 2026a; compare Fettke and Reisig, 2024). If two parts could both meet the same need of a third, daedal refuses the declaration. A system assembled this way is determined by its declaration before it runs, so you can establish what it is by reading the declaration alone (Douglas, 2026b).

The same parts in any order give the same system Three declared parts, assembled in one order or another, normalise to one form: the same system either way. declared parts, in any order A B C C A B One system one normal form settled by the declaration, before it runs

References

Published work that Nikosophia is built on, and work it is related to. Every entry was checked against its DOI record, the publisher's page or its arXiv record. Each carries one line on how it bears on Nikosophia. Within each group the sources Nikosophia is built on come first, and the groups run from the anatomy of a single rule to the composition of a whole system.

  • W. N. Hohfeld. Some Fundamental Legal Conceptions as Applied in Judicial Reasoning. The Yale Law Journal 23(1):16–59, 1913. doi:10.2307/785533 Nikosophia's rules take Hohfeld's anatomy of a legal relation: a bearer, a counterparty and an act, with every duty correlative to someone's right, so a duty owed to no one is malformed.
  • W. N. Hohfeld. Fundamental Legal Conceptions as Applied in Judicial Reasoning. The Yale Law Journal 26(8):710–770, 1917. doi:10.2307/786270 The sequel, which completes the scheme of correlatives and opposites that Nikosophia's relation positions are drawn from.
  • L. T. van Binsbergen, L.-C. Liu, R. van Doesburg, T. van Engers. eFLINT: A Domain-Specific Language for Executable Norm Specifications. GPCE 2020, pp. 124–136. doi:10.1145/3425898.3426958 An executable language built directly on Hohfeld's framework, and a reference implementation against which Nikosophia's relation design can be checked.

Modality and business vocabulary

  • Object Management Group. Semantics of Business Vocabulary and Business Rules (SBVR), Version 1.5. OMG formal/19-10-02, December 2019. omg.org/spec/SBVR Nikosophia takes SBVR's division of rules by modality: an alethic rule cannot be violated, so a record that breaks it is refused; a deontic rule can be, so a record that breaks it opens a breach. It also takes SBVR's layering of rules on facts, and facts on terms.
  • J. R. Searle. Speech Acts: An Essay in the Philosophy of Language. Cambridge University Press, 1969. doi:10.1017/CBO9781139173438 The distinction between constitutive and regulative rules, which reaches SBVR's modality cut from philosophy.
  • A. J. I. Jones, M. Sergot. A Formal Characterisation of Institutionalised Power. Logic Journal of the IGPL 4(3):427–443, 1996. doi:10.1093/jigpal/4.3.427 The formal account of "X counts as Y in context C", the form of a constitutive rule.

Rules and defeasibility

Guido Governatori's work is the closest prior art to Nikosophia's rules layer. A defeasible theory takes its rules and the precedence among them as given, and how they were assembled is outside its subject. Nikosophia's composition assembles a rulebook, and a defeasible reasoner could take that rulebook as its input. The two bodies of work are orthogonal and compose.

  • G. Governatori. Practical Normative Reasoning with Defeasible Deontic Logic. Reasoning Web 2018, Lecture Notes in Computer Science, Springer, pp. 1–25. doi:10.1007/978-3-030-00338-8_1 Reasoning about obligations with exceptions, priorities and violations, including what is owed once a duty has already been breached, which is the ordinary condition of a compliance record.
  • S. Sadiq, G. Governatori, K. Namiri. Modeling Control Objectives for Business Process Compliance. Business Process Management (BPM 2007), Lecture Notes in Computer Science, Springer, 2007, pp. 149–164. doi:10.1007/978-3-540-75183-0_12 Compliance by design: control objectives modelled alongside the business process rather than checked after it, the approach Nikosophia's projection of rules into business operations shares.
  • G. Governatori, A. Rotolo. Norm Compliance in Business Process Modeling. RuleML 2010, Lecture Notes in Computer Science, Springer, pp. 194–209. doi:10.1007/978-3-642-16289-3_17 A normaliser that examines a rule set on its own, before any process runs, and detects genuine conflicts as distinct from apparent ones; the closest prior art to Nikosophia's build-time check of a rulebook.
  • G. Governatori. The Regorous Approach to Process Compliance. 2015 IEEE 19th International Enterprise Distributed Object Computing Workshop (EDOCW), pp. 33–40. doi:10.1109/EDOCW.2015.28 Regorous, a compliance checker for business processes built on defeasible deontic logic.
  • H.-P. Lam, G. Governatori. The Making of SPINdle. RuleML 2009, Lecture Notes in Computer Science, Springer, pp. 315–322. doi:10.1007/978-3-642-04985-9_29 SPINdle, the open reasoner for defeasible logic that Governatori's compliance work runs on.
  • M. Palmirani, G. Governatori, T. Athan, H. Boley, A. Paschke, A. Wyner (eds.). LegalRuleML Core Specification Version 1.0. OASIS Standard, 30 August 2021. docs.oasis-open.org/legalruleml The OASIS standard for representing legal norms, including their sources and their temporal status.
  • L. Robaldo, S. Batsakis, R. Calegari, F. Calimeri, M. Fujita, G. Governatori, M. C. Morelli, F. Pacenza, G. Pisano, K. Satoh, I. Tachmazidis, J. Zangari. Compliance Checking on First-Order Knowledge with Conflicting and Compensatory Norms: A Comparison among Currently Available Technologies. Artificial Intelligence and Law 32(2):505–555, 2024. doi:10.1007/s10506-023-09360-z A comparison of the technologies available for compliance checking where norms conflict or compensate for one another.
  • D. Makinson, L. van der Torre. Input/Output Logics. Journal of Philosophical Logic 29(4):383–408, 2000. doi:10.1023/A:1004748624537 A norm treated as a relation from conditions to what is obligatory, held apart from the operation that derives obligations; Nikosophia holds its rules apart from the step that assesses them in the same way.

Law as code

  • D. Merigoux, N. Chataing, J. Protzenko. Catala: A Programming Language for the Law. Proceedings of the ACM on Programming Languages 5(ICFP):1–29, 2021. doi:10.1145/3473582 Statute written as general cases with exceptions and compiled to executable code; Catala resolves exceptions within a definition, where Nikosophia's rules reach the rulebook from anywhere in the composition.
  • T. J. M. Bench-Capon, F. P. Coenen. Isomorphism and Legal Knowledge Based Systems. Artificial Intelligence and Law 1(1):65–86, 1992. doi:10.1007/BF00118479 The principle that a rule base should correspond, provision by provision, to its source text; each Nikosophia rule is identified by the authority whose text it transcribes.
  • S. Peyton Jones, J.-M. Eber, J. Seward. Composing Contracts: An Adventure in Financial Engineering. ICFP 2000, pp. 280–292. doi:10.1145/351240.351267 Contracts as values composed under an algebra, the nearest prior art to rules held as composable parts.

Conflict and precedence

  • D. Calvanese, M. Dumas, Ü. Laurson, F. M. Maggi, M. Montali, I. Teinemaa. Semantics and Analysis of DMN Decision Tables. Business Process Management (BPM 2016), Lecture Notes in Computer Science, Springer, pp. 217–233. doi:10.1007/978-3-319-45348-4_13, arXiv:1603.07466 A geometric semantics for decision tables with algorithms that detect overlapping and missing rules; the overlap problem Nikosophia's conflict check addresses.
  • C. L. Forgy. Rete: A Fast Algorithm for the Many Pattern/Many Object Pattern Match Problem. Artificial Intelligence 19(1):17–37, 1982. doi:10.1016/0004-3702(82)90020-0 The production-system tradition that ordered competing rules by salience, specificity and recency; Nikosophia orders them by where each sits in the composition, the specific ahead of the general.
  • K. R. Apt, H. A. Blair, A. Walker. Towards a Theory of Declarative Knowledge. In J. Minker (ed.), Foundations of Deductive Databases and Logic Programming, Morgan Kaufmann, 1988, pp. 89–148. doi:10.1016/B978-0-934613-40-8.50006-3 Stratified negation. Nikosophia refuses a rulebook in which rules depend on one another through a negation in a cycle, and allows cycles without one, on the same ground.
  • A. Van Gelder, K. A. Ross, J. S. Schlipf. The Well-Founded Semantics for General Logic Programs. Journal of the ACM 38(3):619–649, 1991. doi:10.1145/116825.116838 A three-valued semantics. Nikosophia evaluates a condition as true, false or undefined, so a missing record is reported as missing and never read as false.

Composition

  • L. Douglas. Free Assembly: A Calculus of Composition by Name. Operative, 2026. operative.au/papers/free-assembly The calculus Nikosophia's composition rests on: a system's form assembled from declared parts, by name, in any order, to one normal form.
  • L. Douglas. No Feedback: A Logical System Is Not a Process. Operative, 2026. operative.au/papers/no-feedback Why a system's form is settled by its declaration before it is built or run, and so can be checked by reading the declaration.
  • P. Fettke, W. Reisig. Once and for All: How to Compose Modules – The Composition Calculus. ISoLA 2024, Lecture Notes in Computer Science, Springer, pp. 173–190. doi:10.1007/978-3-031-75107-3_11, arXiv:2408.15031 The calculus of sequential composition, for building an instance; Free Assembly is its parallel complement, for settling a form.
  • E. Dolstra, A. Löh, N. Pierron. NixOS: A Purely Functional Linux Distribution. Journal of Functional Programming 20(5–6):577–615, 2010. doi:10.1017/S0956796810000195 Configuration merged from independent modules, independent of order, and normalised before it is realised; the nearest mechanism to Nikosophia's composition, which refuses a double definition where NixOS ranks it by priority.
  • N. Schärli, S. Ducasse, O. Nierstrasz, A. P. Black. Traits: Composable Units of Behaviour. ECOOP 2003, Lecture Notes in Computer Science, Springer, pp. 248–274. doi:10.1007/978-3-540-45070-2_12 A composition in which a name defined twice is an error for the composer to resolve, the discipline Nikosophia's composition applies to its parts.
  • J. C. Reynolds. Separation Logic: A Logic for Shared Mutable Data Structures. 17th Annual IEEE Symposium on Logic in Computer Science (LICS 2002), pp. 55–74. doi:10.1109/LICS.2002.1029817 The separating composition and frame property that Free Assembly's operator shares: adding a part leaves what the other parts establish undisturbed.
  • J. A. Goguen, R. M. Burstall. Institutions: Abstract Model Theory for Specification and Programming. Journal of the ACM 39(1):95–146, 1992. doi:10.1145/147508.147524 Composition of specifications prior to, and untouched by, their interpretation; the same order Nikosophia keeps between assembling a rulebook and reading what its rules mean.
  • A. Mazurkiewicz. Trace Theory. Petri Nets: Applications and Relationships to Other Models of Concurrency, Lecture Notes in Computer Science 255, Springer, 1987, pp. 278–324. doi:10.1007/3-540-17906-2_30 The mathematics of order-independence that No Feedback uses to state when a form depends only on its parts and not on the order they were put together in.