LEGAL ISSUES IN BLOCK-CHAIN BASED CORPORATE GOVERNANCE: SMART CONTRACTS, VOTING, AND TRANSPARENCY
AUTHOR – MUSKAN JAJOO & JENNIFER NENGNEIVAH HAOKIP
STUDENTS AT HIDAYATULLAH NATIONAL LAW UNIVERSITY
BEST CITATION – MUSKAN JAJOO & JENNIFER NENGNEIVAH HAOKIP, LEGAL ISSUES IN BLOCK-CHAIN BASED CORPORATE GOVERNANCE: SMART CONTRACTS, VOTING, AND TRANSPARENCY, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (1) OF 2026, PG. 619-627, APIS – 3920 – 0001 & ISSN – 2583-2344.
INTRODUCTION
Blockchain technology, which first emerged in connection with Bitcoin, has now begun to influence the internal structures of corporations. The promise of the technology lies in its ability to record transactions in a tamper-resistant and decentralized ledger. Scholars such as Yermack have argued that this development could alter long-standing features of corporate governance, particularly in relation to ownership records and voting procedures.[1] What was once the domain of registrars and centralized depositories is now being reconsidered through distributed systems.
At the same time, the legal consequences of this transition remain unsettled. Smart contracts like self-executing code that purports to embody contractual commitments have been promoted as a mechanism for automating shareholder agreements and even aspects of board decision-making. Yet, as Werbach and Cornell point out, the enforceability of such code under ordinary contract principles is far from certain.[2] Questions of consent, mistake, interpretation, and judicial remedy cannot be easily translated into binary instructions. Similarly, the immutability of blockchain raises tensions with regimes such as the EU’s General Data Protection Regulation, which insists on erasure rights. Corporate law has always relied on flexibility and judicial interpretation. The rigidity of blockchain systems may therefore be in conflict with established doctrines of equity and fiduciary responsibility. Jurisdictions have responded unevenly: Delaware has amended its General Corporation Law to recognise the maintenance of corporate records on distributed ledgers,[3] while the European Union has preferred to focus on shareholder rights and transparency. In India, the Securities and Exchange Board has emphasised electronic voting for listed companies. The comparative divergence illustrates that blockchain’s role in governance will depend not only on technology but also on regulatory adaptation.
[1] David Yermack, Corporate Governance and Blockchains, 21 Rev. Fin. 7 (2017).
[2] Kevin Werbach & Nicolas Cornell, Contracts Ex Machina, 67 Duke L.J. 313 (2017).
[3] Del. Code Ann. tit. 8, 219(c) (2017 amendment recognising blockchain stock ledgers).