Lafarre, Anne; Van der Elst, Christoph --- "Legal tech and blockchain for corporate governance and shareholders" [2018] ELECD 1442; in Mak, Vanessa; Tjong Tjin Tai, Eric; Berlee, Anna (eds), "Research Handbook in Data Science and Law" (Edward Elgar Publishing, 2018) 153

Book Title: Research Handbook in Data Science and Law

Editor(s): Mak, Vanessa; Tjong Tjin Tai, Eric; Berlee, Anna

Publisher: Edward Elgar Publishing

ISBN: 9781788111294

Section: Chapter 8

Section Title: Legal tech and blockchain for corporate governance and shareholders

Author(s): Lafarre, Anne; Van der Elst, Christoph

Number of pages: 30

Abstract/Description:

This chapter looks at how legal tech can offer smart solutions for classical corporate governance inefficiencies, like the agency problem and the old-fashioned Annual General Meeting of Shareholders (hereinafter: the AGM). This chapter focusses on the smart solutions of legal tech, thereby investigating and critically assessing its benefits and risks in the field of corporate governance and the AGM. The chapter provides a general introduction to the agency problem and the associated agency costs between shareholders and their corporate board members in corporate governance and introduces blockchain technology as a solution to the agency problem, thereby discussing the decentralized autonomous organization (hereinafter: The DAO). Although blockchain offers the possibility to create a decentralized peer-to-peer network, we will see that The DAO had still some governance problems. Therefore, the authors consider blockchain and smart contracting technology to decrease the monitoring and bonding costs of companies, by introducing and evaluating a blockchain based AGM.