Transparency in the Board with Blockchain
The blockchain distributed ledger offers the chance to enhance trust in every sector to which it is applied. Blockchain verifies contracts, ownership, and payments that currently exist. Blockchains distributed ledger technology has applications in every kind of digital records and transactions. Blockchains are built to record information that can never be edited or deleted. This makes it fraud-proof and trustworthy without the need for third-party verification. The use of blockchain is highly impactful in every industry. However, the public sector can be highly beneficial when this technology is rightly applied. World identity network stores the critical information of refugee’s in digital lockboxes. Ukraine is implementing blockchain technology to conduct the elections. Iran government is launching cryptocurrency to by-pass the American-led economic approvals. The boardroom notices all these developments. The advent of blockchain technology has become tech-savvy to the board.
Decentralized Autonomous Organization (DAO) is the only company without employees, which is solely governed by the software called smart contract or virtual board of directors voting electronically, and several companies including fortune 500 companies use the DAO framework. Siemens, with the help of blockchain technology, raised funds for SOS children. The blockchain has high potential that it can disrupt the financial services, particularly in automating market surveillance events and post-trade event processing. Initial coin offerings (ICO) are powerful financing instruments that offer the companies to increase their capital quickly. These are attractive yet complex. Directors must acquire new skills to oversee such transactions.
Implementation of blockchain technology involves more risks. Smart contracts automate both internal and external transactions, as these are based on code rather than a law. If the code is a law, flaws in the code are also law and reciprocal to it. The other risk is from blockchain jurisdiction. The U.S. company blockchain technology should ensure that any other non-U.S. exporters or bankers do not use it; if this fails, the company could be prosecuted. The board faces two particular issues while adding the tech-savvy directors: a shortage of talent and reluctance to hire technologists. There should be a dedicated technology committee to give blockchain an even stronger presence in the boardroom; however, this becomes a rare course of action. The overall impact of a blockchain technology can be overcome by allocating competent blockchain director to the risk community. It is crucial that board directors should understand the blockchain technology and stay informed about the updates of the technology.