Transparency Implications in Decision-Making Processes in the Case of Decentralized Autonomous Organizations

Abstract

Transparent corporate governance is crucial in today’s globalized economy to ensure acompany’s economic effectiveness. During the financial crisis in 2008, many businesses disguised their financial data, which resulted in the collapse of a large number of financial institutions, as regulators could not recognize and manage risks promptly.A new form of a blockchain-based organization, the Decentralized Autonomous Organization(DAO), represents a fully democratic and organizational structure, which enables new corporate governance models that actively build on trust by allowing transparency. It is an algorithmically governed, code-based system with its internal capital that operates autonomously and without management hierarchies and central decision-making structures. Built as a decentralized environment, a DAO is completely controlled by decisions of all its shareholders and relies on the trust and accountability of its community to achieve its business goals....