Skip to main content

Blockchain and artificial intelligence (“AI”) are often referenced as key developments for the boardrooms of the future. An increasing amount of academic literature is being produced to examine the theoretical and legal arguments regarding these innovations. A roundtable, organised by the European Corporate Governance Institute (ECGI) and University of Oxford, Faculty of Law, took place at the offices of Allen & Overy in London on 26 November 2018 to discuss some of these arguments.

At the roundtable, blockchain was presented as one solution to a range of current issues which include the legal requirement to identify shareholders, to enable them to exercise their right to vote, for institutional investors to develop their shareholder engagement policies, and to eliminate the unequal distribution of information to shareholders. By using one major chain of information, blockchain could potentially ensure the efficient and equal distribution of information, the immutability of each transaction, while also reducing the number of intermediaries involved and transaction costs simultaneously. The mainstream introduction of such technology could effectively alter the division of power between the board and shareholders by giving shareholders the capability to make decisions on a wider range of matters in an efficient manner.

The discussion that ensued raised a number of concerns that may require thought prior to the widespread introduction of blockchain. These included the need for legal governance which would require centralisation of the system in order to properly reflect judicial decisions and changes in the law, the unproven claims that it was immutable and unhackable, the existing ability to challenge the immutability of a transaction, and the justification for some market participants to be allowed NOT to disclose their actions and stakes for a reasonable time period (eg. traders or raiders) to be considered. Furthermore, the introduction of more efficient voting may add to pressure to give a vote to individual members of pension funds for example.

The practical, legal and policy implications of implementing blockchain as a corporate governance tool are therefore diverse, but perhaps not insurmountable.

Examples of AI technology are becoming increasingly prevalent and machine-learning has dramatically altered the development of AI, replacing forerunners, known as ‘expert systems’ which depended on enormous engineering inputs and a finite knowledge base. The potential to adopt AI in relation to corporate governance is evident when considering it as a tool for monitoring and synthesising information, measuring performance, risks, compliance, and for sophisticated scenario planning (simulations). These possible uses could facilitate and enhance the board’s required oversight of internal controls along with their legal duty of care.

The concerns relating to data governance, that is, the governance issues arising from firms’ use of AI for monitoring and simulations, were highlighted during the roundtable to include the objective standard legally required by directors to exercise their duty of care (which may require in the future an appreciation of the strengths and weaknesses of AI model analyses), the model’s external validity insofar as the model has a general character, and the risk of dashboard myopia. In addition, legal systems would have to get better at assessing probabilistic evidence.

The roundtable provided a useful platform to examine the current status of these new tools, their potential application and the main areas of concern that will require consideration and debate.

A full summary report of the event is available on the ECGI website here.




Working Paper: Blockchain and Smart Contracting for the Shareholder Community


More resources on this topic can be found at the following page:






Elaine McPartlan

General Manager

European Corporate Governance Institute (ECGI)

+32 2 550 2340




Professor Marco Becht

Executive Director

European Corporate Governance Institute (ECGI)




About the European Corporate Governance Institute (ECGI)

The ECGI is an international scientific non-profit association which provides a forum for debate and dialogue focusing on major corporate governance issues and thereby promoting best practice. It is the home for all those with an interest in corporate governance offering membership categories for academics, practitioners, patrons and institutions.

Its primary role is to undertake, commission and disseminate research on corporate governance. Based upon impartial and objective research and the collective knowledge and wisdom of its members, it can advise on the formulation of corporate governance policy and development of best practice. In seeking to achieve the aim of improving corporate governance, ECGI acts as a focal point for academics working on corporate governance in Europe and elsewhere, encouraging the interaction between the different disciplines, such as economics, law, finance and management.


The ECGI Roundtable Series

The ECGI Roundtable Series provides an engagement platform between ECGI Research Members and Institutional or Patron Members of ECGI.  The topics are selected based on geographic relevance and the interests of the participating members. For queries about hosting or taking part in an ECGI Roundtable, contact Prof. Marco Becht, ECGI Executive Director.


Click here for information about becoming an institutional member of ECGI.


More News

Scroll to Top