THE POTENTIAL IMPACT OF BLOCKCHAINS ON CORPORATE GOVERNANCE: A SURVEY ON SHAREHOLDERS’ RIGHTS IN THE DIGITAL ERA

Blockchains offer a revolutionary application of cryptography and information technology to old financial record-keeping issues while forging great hopes with regard to lower cost, greater liquidity, more accurate record-keeping, and transparency of ownership. There is also an increasing demand from individual companies to employ blockchains in their activities as some stock exchanges see blockchain technology as a new method for trading corporate equities and tracking their ownership. At the same time, an expanded use of this new technology may introduce new risks on the market and lead to far-reaching changes in corporate governance. The end of anonymity is one of these issues but other corporate governance issues may be raised. While EU regulation regarding shareholders’ rights is moving forward, these risks have not been taken into account so far: the potential impact blockchains may have on shareholders’ protection in the EU Market and elsewhere is absent. European institutions seem to have dodged consideration of this impact. This paper evaluates the potential implication blockchains may have in a near future, assessing whether and how this new technology may modify the balance of power among managers, institutional investors, small shareholders, proxy advisors and other parties involved in corporate governance