DAOs and Corporate Governance

Abstract Decentralized autonomous organizations (DAOs) offer the promise of enabling an enterprise to combine a democratic member-run governance system with the efficiency and predictability of automation. DAOs challenge traditional conventions about corporate governance in several ways. By enabling enterprises to craft customized governance structures, they challenge the ability of participants to understand and price businesses that employ novel governance features. By broadening the potential scope of who can participate in governance systems, DAOs respond to an emerging debate over stakeholder governance. They also raise important issues about accountability and the extent to which a decentralized governance structure in which individual decision-makers are not constrained by fiduciary principles can effectively limit conflicts of interest and self-dealing. This chapter considers these features of DAO corporate governance. It embraces the potential offered by the DAO structure to rethink traditional corporate governance norms and highlights the implications of the governance choices made by DAOs.