NBER: Blockchain could change corporate governance

Regulation | December 28, 2015 By:

According to a recent report published by the National Bureau of Economic Research (NBER), blockchain could dramatically change corporate governance by reducing legal insider trading and making shareholder voting more reliable.

NBER explores how the widespread adoption of distributed ledgers could impact investors, shareholders, auditors and other participants in corporate governance.

”Managerial ownership could become much more transparent, with insider buying and selling detected by the market in real time, and chicanery such as the backdating of stock compensation becoming much more difficult, if not impossible. Corporate voting could become more accurate, and strategies such as ‘empty voting’ that are designed to separate voting rights from other aspects of share ownership could become more difficult to execute secretly,” said NBER.

NBER sees the technology as being first adopted in developing nations where existing recordkeeping systems are inadequate, market regulators are ineffective and smartphone penetration levels are high.

The National Bureau of Economic Research is an American private nonprofit research organization committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.