The Handbook of Board Governance, 2nd Edition

20The Impact of Blockchain Technology for Corporate Governance

Jack J. Bensimon

Managing Partner, Black Swan Diagnostics Inc.

Executive Summary

Effective corporate governance involves balancing the interests of the various stakeholders of a corporation, including the community, financiers, suppliers, customers, shareholders, and management. The most important role that corporate governance can play, however, is in the creation of a board of directors and board access to accurate and complete information.

Using blockchain technology as the means for a common framework of data collection, analysis, and monitoring has significant potential for corporate governance. Blockchain solves the integrity and trust problem in recording transactions without having a trusted third party. What DOS (Disk Operating System) did to power numerous applications today, this technology will do and be as powerful if not more powerful. Distributed Ledger Technology (DLT) enabled by blockchain fosters clearer corporate oversight and top-to-bottom collaboration that can bolster leadership efficacy. Most corporations have a material democratic deficiency in corporate decision-making; blockchain-linked platforms may change the nature of corporate governance by granting real power to shareholders and bringing management decisions into greater focus and accountability.

The use of smart contracts on the blockchain through programmable ownership can bring greater efficiency, transparency, liquidity, and access ...