Blockchain Technology and Corporate Governance: An Analysis of Board Structure, Shareholder Rights and Compensation Policies

Abstract

The blockchain technology (BT)_offers a new means to trade and monitor the ownership of financial assets which is similar to the advent of double-entry bookkeeping centuries ago. This represents a significant development in financial record-keeping. Stock exchanges are investigating BT worldwide to enable businesses to list, to trade and to vote on shares. This adoption has the potential to benefit stockholders through reduced trading costs, faster ownership transfers, improved record accuracy and increased process transparency. This study examines the effect of BT on corporate governance. Using feasible generalised least squares analysis, our study analyses data from 297 European businesses included in the STOXX Europe 600 index between 2016 and 2021. The results show that the adoption of BT improves the quality of board decision-making and streamlines board activities. In addition, the study indicates that BT facilitates greater direct shareholder rights and encourages effective worldwide administration of director and board member compensation. The research contributes to the current body of literature by confirming the positive impact of implementing (BT) on enhancing corporate governance measures. This, in turn, assists managers in formulating appropriate strategies.

DOI: https://doi.org/10.21863/jcar/2024.13.3.002

Keywords: Blockchain Technology, Corporate Governance, Board Structure and Function, Shareholders Rights, Compensation Policy, Vision and Strategy

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