*5.3. Decentralized Autonomous Corporate Governance (DACG) Framework*

In essence, blockchain is a distributed ledger (which can be open, permissioned or private) that records transactions in a permanent verifiable manner among parties efficiently. In some platforms, these tasks can be programmed to trigger transactions automatically given certain contingencies (smart contracts). With blockchain-enabled corporate governance, need for intermediaries such as brokers, banks and lawyers would be significantly reduced. Instead, stakeholders, users, organizations and blockchains would transact and communicate with each other with as little friction as possible. Such a newly digitized world of corporate governance, which may seem decades away into the future, is the daunting potential of blockchains. Moreover, due to COVID-19, that future may come more sooner than anticipated. Figure 6 outlines our DACG framework.

#### *Int. J. Financial Stud.* **2020**, *8*, 36

**Figure 6.** Decentralized autonomous corporate governance.

Key features of the blockchain technology are already deeply embedded in our economic, legal and political systems in terms of record-keeping, transactions, contracts and stakeholders. Similar to the functions in a blockchain, organizational governance and boundaries are established as is verification of ownership, identities, recordkeeping of events and interactions among stakeholders. Hence, in our opinion, application of blockchain into corporate governance is just another form of digitizing the same factors in corporate governance. However, the possibility of digitization at every level may pose several ethical, regulatory and social issues apart from key advantages. These issues and advantages are discussed in the later sections of this study. The DACG Framework is designed to help organizations and interested parties achieve clarity, ensure value from their efforts, create a clear mission, maintain scope and focus and establish accountabilities with regard to blockchain adoption in corporate governance. This section of the paper describes the key components and core factors of the DACG Framework. In essence, this framework provides an overview of blockchains, its impact and relevant corporate governance applications and theories to enable proper adoption.
