Blockchain Technology: the Beginning of a New Era in Reforming Corporate Governance Mechanisms

This study has reviewed the literature related to corporate governance (CG) and blockchain technology (BCT). Theoretical and conceptual arguments are used to develop the link between CG mechanisms and BCT. The author identifies that BCT helps firms in reducing the unethical and harmful effects of entrenched managers and the information asymmetry between management and shareholders in firms. BCT, which is a distributed and decentralised ledger for recording transactions, does this by providing an advanced level of security, accuracy, transparency, and accountability in record-keeping. Thus, BCT has the potential to lower agency costs and the roles and functions of traditional CG practices in firms. However, empirical studies on this particular area are scant. Therefore, this study proposed a model for future researchers to test empirically that develops a mechanism between CG practices and BCT. This study will raise awareness among shareholders, practitioners, and policymakers about the need and importance of inducting BCT and modifying CG mechanisms in order for them to survive and be competitive.