Scientific Center of Innovative Research, International Conference on Corporation Management-2020

APPLICATION OF BLOCKCHAIN TECHNOLOGIES IN CORPORATE MANAGEMENT

Volodymyr Marchenko

Abstract


The relevance of research on the use of blockchain technology is due to the institutional problems faced by society in the development of the information economy. These are, first of all, the problems of trust, high costs of maintaining registers and managing large amounts of information, the risks of information attacks and the possibility of damage or loss of data of these registers due to various circumstances.

The introduction of blockchain technologies in business structures, public administration, corporate governance are widely discussed among politicians, lawyers, other specialists in the field of information and telecommunication technologies, and scientists as well. Blockchain issues have been developed in the works of: M.Atzori [1], M. Swan [2], D. & A. Tapscott [3], O. Danilchenko [4], P. Kravchenko [5] and others .

Today in Ukraine blockchain technologies are not widely used both in the field of public administration and in corporate management,. Thus, the purpose of this work is to analyze the prospects for the use of blockchain technologies in the field of corporate management, in particular when making decisions at a general meeting of shareholders.

The peculiarity of the blockchain is the possibility of decentralized storage and processing of user and other data: this universal principle can be used in any voting process. The technology is able to guarantee a qualitatively higher degree of security, including effective protection against hacker attacks and misuse of personal data.

The architecture of blockchain technology is based on the principle of decentralized management of data. Blockchain can be applied to any database and provide reliable storage of information. Within this system, there is no "management" center (single server), which makes falsifying voting results not possible.

Among the advantages of blockchain the ability of the technology to more effectively preserve the privacy of users, the ability to individually control their personal data should also be noted.

Internet voting has been used worldwide since 2000. However, the advantages of blockchain voting during the general meeting of shareholders are obvious. This is transparency and the impossibility of falsification. In addition, the world is facing a pandemic, and the use of blockchain voting allows not to visit the venues of the general meeting of shareholders. The only need is to install the necessary software.

The right to hold general meetings remotely during quarantine is provided by the Law of Ukraine № 540-IX of March 30, 2020 “On Amendments to Certain Legislative Acts of Ukraine Aimed at Providing Additional Social and Economic Guarantees in Connection with the Spread of Coronavirus (COVID-19)”. To implement the provisions of Law № 540-IX, the National Securities and Stock Market Commission (NSSMC) approved the Temporary Procedure for convening and remote holding of general meetings of shareholders and general meetings of corporate investment fund participants.

The decision of the NSSMC № 196 of April 16, 2020, which approved this procedure, states that the body convening the general meeting must enter into an agreement with the Central Depository on the provision of services for remote general meeting.

In turn, shareholders, for registration at the general meeting, submit ballot papers to the depository institution that maintains the securities account of such shareholders. If a shareholder has security accounts in several depository institutions where the company's shares are accounted for, each of the depository institutions accepts a ballot paper for voting at the general meeting. Thus, according to the NSSMC, issuers will interact with the Central Depository, and shareholders - with depository institutions, with which they have a contract for servicing a securities account. Through the depository system, the information will reach the issuer from the shareholders, and in reverse order, the issuer will receive the results of the shareholders' voting.

The weakness of such a voting system is its vulnerability to hacker attacks and the possibility of data loss due to fraud, theft or unauthorized use of data from these registers.

Blockchain technology allows to solve the above problems in an optimal way, to minimize the costs of participants in electronic interaction, opens new opportunities in the creation and management of electronic registers and their promotion in a network economy. Blockchain technology can be implemented to solve the problems of information management, in particular for maintaining public registers of shareholders and members of the corporate investment fund.

REFERENCES:

1. Atzori, M. (2017). Blockchain Technology and Decentralized Governance: is the State Still Necessary? Journal of Governance and Regulation, 6(1), 45-62. https://virtusinterpress.org/IMG/pdf/10.22495_jgr_v6_i1_p5.pdf

2. Swan Melanie. Blockchain: Blueprint for a New Economy / Melanie Swan - Sebastopol CA : O'Reilly Media, 2015. – 152 p.

3. D. & A. Tapscott. Blockchain revolution: How the Technology Behind Bitcoin is Changing Money, Business, and http://dontapscott.com/books/blockchain-revolution.

4. Danylchenko O. Blokchein: yuryst iz mashiny // YURYST&ZAKON. 2017. – No 21, june. URL : http://uz.ligazakon.ua/magazine_article/EA010438. (In Russian).

5. Kravchenko P. Blokcheyn i detsentralizovannyie sistemyi [Blockchain and decentralized systems]: textbook for students of institutions of higher education: in 3 parts. Part 1 / P. Kravchenko, B. Scriabin, O. Dubinina. - Kharkov: PROMART, 2018. – 408 p. : ill. 185; tab. 13; bibliography: 30 titles. (In Russian).