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Blockchain is currently still largely focused on speculation with virtual currencies like bitcoins. However, it can also offer smart solutions for classical inefficiencies in the corporate field. Blockchain can be described as a distributed ledger that can record transactions between (unknown) parties in a verifiable and immutable way. In a blockchain system, which is operating on a decentralized peer-to-peer network, information is stored on a public ledger or a private one (or permissioned) and contains all transactions that are executed.

In our paper we look into the applications of blockchain technology in the field of corporate governance, paying special attention to the restructuring of the old-fashioned and rigid Annual General Meeting of Shareholders (the AGM). The AGM plays an important theoretical role in the agency relationship by offering shareholders an important monitoring tool, but in practice, the AGM is considered a dull mandatory ritual, which classical outline remained unchanged for centuries. In contrast, corporate life has moved on and pays only lip service to the old-fashioned legal requirements of AGMs. Blockchain offers new possibilities to facilitate the agency relationship between corporate actors, thereby creating trust and transparency.

In a private blockchain, managed by the company only accessible for shareholders, the company and shareholders can present proposals, after which shareholders are immediately notified and can exercise their voting rights during a short period. The voting results may become instantly available after a cut-off point, and majority requirements, necessary to render the decision binding and verifiable, need to be reached in a specified timeframe. Shareholders can verify their own transactions, but none of the shareholders should be able to determine what voting decision was taken by other shareholders. Blockchain decreases the organisation costs for companies and increase the speed of decision-making, making the AGM a fast and lean corporate organ.

The recent prototypes of blockchain-based AGMs that we discuss in our paper, of which some are already launched in practice, show that this modernization of the AGM is indeed practically feasible and perhaps just around the corner. Given the large opportunities we expect more initiatives to be launched soon, probably before our contribution’s ink is dry. Nonetheless, it is important to recognize that the blockchain-based AGM would also raise important new corporate legal questions, including whether it is desirable to abolish the physical classical AGM.


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