Corporate Governance Appended: Application of Blockchain to Revive Lost Management
Aniruddh Vadlamani, Ryan Joseph & Chetan Soni*
Volume 16 Issue 1 (2023)
One can ponder whether blockchain technology can provide a viable new-age solution to the age-old growing concerns surrounding corporate governance. This paper argues that the integration of blockchain technology has the potential to revolutionise the way corporations manage their governance processes. It highlights how the issue of agency costs, information asymmetry and lack of shareholder activism can be addressed by the lightning quick, secure, transparent, and immutable records of transactions on the ledger, thereby making it an ideal tool for improving corporate transparency and accountability. The ability to lower shareholder voting costs and the organisation costs for companies, including holding of an annual general meeting benefits both the company and the erstwhile forgotten shareholders. Further, through the introduction of tokens, and its uniquely malleable nature, blockchain provides the company with an opportunity to get creative with its capital raising while allowing a tokenholder to reap such benefits over a similarly placed shareholder. Lastly, the paper showcases that by reinstating oversight over the managerial role in hands of those directly impacted by a company’s actions, blockchain allows us to call for the wringing back of control. Hence, the enhancement in a company’s overall efficiency allows us to eliminate corporate governance concerns through the implementation and integration of blockchain technology.