Blockchains - Catching the Board's Attention
It has been over 25 years since the first website was set up. The internet disrupted how business was done at the time. Blockchains can be as disruptive as the internet was for most businesses. In July 2017, Delaware became the first state to authorize the use of blockchains for issuing stock, maintaining current shareholder lists and for record keeping purposes. Since 60% of all US corporations are based in Delaware, this is a significant development. Yet, a recent survey found that 38% of CXOs are taking a wait and watch approach to the adoption of blockchains, whereas the rest are doing nothing at all. Public companies are focused on near-term results to pursue any meaningful strategies to building blockchain based platforms and ecosystems. This is exactly where the board needs to step in, for the board has a responsibility to engage in a forward thinking dialog and participate in strategic conversations that maximize shareholder value. The next generation of technology is a discussion that every board member should have on a regular basis.
While some directors may see blockchain technology as a threat to the company's underlying business, at Proteum, we work with boards and advise on the opportunities that are spawned by recasting archaic business models. Even if the technology is a threat, the board has a responsibility to mitigate the threat and adopt solutions that will help sustain the business. If directors are not well versed in the blockchain technology, they may not be living up to their fiduciary responsibilities. Ongoing education for the full board is a great way to start these conversations, followed by a formal committee to look into the opportunities and threats to the current business model.