Blockchain Technology for Corporate Governance and Shareholder Activism

Lafarre, Anne; Elst, Christoph Van der

doi:10.2139/ssrn.3135209

Cited by 53 publications

(33 citation statements)

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“…This would make decision-making faster, which will cut costs to companies. The same authors, in a later article [47], point out that with blockchain remote voting "becomes yet more transparent and reliable and thus further reduces the transaction costs to shareholders, which further stimulates (small) shareholder participation rates". Blockchain voting would solve a problem of identification of actual shareholders, which would facilitate participation.…”

Section: The Organisational Environment Creating the Conflictmentioning

confidence: 99%

“…On top of that, currently there are several large-scale blockchain implementation experiments in process. See [47] for a comprehensive table of efforts with a status as of 2018.…”

Section: Se De Falco Et Al [50] Conducted a Survey Of Members Of Tmentioning

confidence: 99%

“…One of the first pilots was Nasdaq's project for e-voting in Estonian AGMs in 2016. In February 2016, Nasdaq announced, in cooperation with the Estonian government, a blockchain based e-voting application which allows shareholders that hold shares in companies listed on the Tallinn Stock Exchange (belonging to Nasdaq) to vote remotely in AGMs [47]. Based on this pilot scheme, Nasdaq expanded blockchain usage to South Africa and is now also using blockchain for trading of mutual funds.…”

Section: Se De Falco Et Al [50] Conducted a Survey Of Members Of Tmentioning

confidence: 99%

“…Another example is a blockchain-based process for proxy voting introduced by CSD Working Group on Distributed Ledger Technology, which is a Consortium of Central Securities Depositories (NSD in Russia, Strate in South Africa, Six Securities Services in Switzerland, Nasdaq Nordic, and DCV in Chile), see [47] for details. The previously-mentioned Broadridge, a large proxy voting business, successfully piloted the proxy voting progress process in cooperation with J.P. Morgan, Santander Investment and Northern Trust in 2017 [53].…”

Section: Se De Falco Et Al [50] Conducted a Survey Of Members Of Tmentioning

confidence: 99%

“…Yet, despite the overall positive attitude towards blockchain for corporate voting, there are, of course important issues to consider. For example, A. Lafarre and C. Van der Elst [47] highlight several issues. If voting is moved to blockchain, would traditional shareholder meetings still be necessary?…”

Section: Se De Falco Et Al [50] Conducted a Survey Of Members Of Tmentioning

confidence: 99%

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The Impact of the Digital Transformation of Business on Corporate Governance. An Overview of Recent Studies

Ivaninskiy

2019

КФ

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This article presents a survey of recent studies on the impact of digitalisation, and particularly blockchain technology, oncorporate governance and the principal-agent conflict in companies. The principal-agent conflict has been a centerpieceof the corporate governance research for more than 40 years. However, recent technological developments, andblockchain in particular, has created new avenues for exploration.We survey the implications of blockchain for the principal-agent conflict in three parts: 1) the organisationalenvironment, and the creation of the conflict; 2) common observable instances of conflict; 3) actions necessary tomaximise the value of blockchain implementation. We limit the studied conflict to the relationship between shareholdersand management. We also limit the blockchain use cases to those currently in testing. The applications for blockchain insecurities trading and for corporate functions automation via ‘smart’ contracts are both analysed. We also evaluate theimplications for investor activism.Our results indicate that passive investor behaviour is at the core of the environment that creates conflict. One of thekey drivers of low activity is a non-transparent voting process resulting in low participation rates. Studies indicate thatblockchain can solve this issue, thus mitigating the conflict, and is an attractive proposition for board members. Themost frequent instances of conflict are related to the composition of boards of directors and compensation schemesobserved at shareholder voting. Using blockchain for settlement would eliminate ambiguity in shareholder registersand prevent such strategies as “empty voting”. Smart contracts promise automation of governance functions like audit,which also weakens conflict. Even skeptics agree that voting is a promising application for blockchain. However, thereis evidence that blockchain poses its own problems, and that smart contracts are associated with practical risks. Somecritics argue that blockchain is less efficient than conventional corporate procedures.Blockchain is among the top digital technologies that business leaders have to monitor closely. As such, this overview ofthe most up-to-date thinking on the subject is relevant for anyone interested in the future of corporate governance andthe digitalisation of business processes. This evaluation serves to highlight the current status of this innovative resource,outlining for both professionals and newcomers what exactly blockchain’s potential uses and implications are, while alsooutlining where a lack of quantitative research creates opportunities for further contributions to the research field. Thisstudy will also be instructive for those investigating blockchain implementation and the optimal characteristics of thesolution.

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Section: The Organisational Environment Creating the Conflictmentioning

confidence: 99%

“…On top of that, currently there are several large-scale blockchain implementation experiments in process. See [47] for a comprehensive table of efforts with a status as of 2018.…”

Section: Se De Falco Et Al [50] Conducted a Survey Of Members Of Tmentioning

confidence: 99%

Section: Se De Falco Et Al [50] Conducted a Survey Of Members Of Tmentioning

confidence: 99%

Section: Se De Falco Et Al [50] Conducted a Survey Of Members Of Tmentioning

confidence: 99%

Section: Se De Falco Et Al [50] Conducted a Survey Of Members Of Tmentioning

confidence: 99%

See 3 more Smart Citations

The Impact of the Digital Transformation of Business on Corporate Governance. An Overview of Recent Studies

Ivaninskiy

2019

КФ

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Blockchain and Governance: Theory, Applications and Challenges

Grover

Chaudhary

Rajput

et al. 2021

Blockchain for Business

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Corporate Finance in the New Business Ecosystem in the Digital Age

Gürünlü

2019

Contributions to Economics

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Blockchain Technology for Corporate Governance and Shareholder Activism

Cited by 53 publications

References 1 publication

The Impact of the Digital Transformation of Business on Corporate Governance. An Overview of Recent Studies

The Impact of the Digital Transformation of Business on Corporate Governance. An Overview of Recent Studies

Blockchain and Governance: Theory, Applications and Challenges

Corporate Finance in the New Business Ecosystem in the Digital Age

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