Mainstream economic and finance theory holds that the fundamental problem facing corporations is the separation of ownership from control. This suggests the key challenge for corporate governance is to ensure the managers and directors do not act in their own interests, but rather in the interests of shareholders. There are two fundamental challenges with this approach: (1) it assumes that all shareholders share a common interest, often assumed to a maximisation of shareholder value and (2) it ignores the legal basis of corporate decision making whereby the directors, not shareholders, maintain ultimate decision control.

Given the corporate decision-making process evolved in the 19th century, we propose that digital technologies such as blockchain allow for a fundamentally different apportioning of decision rights among the shareholders and stakeholders to resolve the conflicts between them. In fundamentally questioning the apportioning of decision rights across different stakeholders, we propose that the introduction of new corporate forms based on a blockchain style system of membership voting and correct apportioning of decision rights will allow for a broader variety of stakeholders to voice their opinions and votes more accurately.

In so doing, the approach addresses issues fundamental to corporate social responsibility, as it provides a mechanism for those affected by corporate decision making to have direct input into the decision-making process. This shifts the nature of CSR away from an external pressure applied to firms to one that is embedded in its decision processes.

In addition to researching, lecturing and developing materials in the areas of governance policy and practice, Dr Gavin Nicholson is an experienced director, governance researcher and board consultant. He has published extensively in the leading journals of his field and currently oversees several large research projects aimed at understanding how boards operate. Gavin has provided advice on corporate governance and strategy to listed and large public companies, government owned corporations, statutory authorities, not-for-profit organisations and local government. He has published extensively in the area of corporate governance, co-authoring two books 'Boards that Work: A New Guide for Directors' and 'Board, Director and CEO Evaluation' and a manual for boards seeking to implement the ASX Corporate Governance Principles.