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Jan 25, 2019

Companies need to think more about blockchain, says survey

Investors predict technology will become as important as earnings reports

Some of the largest institutional investors think listed companies will soon have to show their intentions for blockchain technology and that blockchain executives may find seats in the company boardroom.

In a survey conducted by the trade association Global Blockchain Business Council (GBBC), a quarter of all institutional investors predict that listed firms will have to outline their plans for blockchain in the next few years, along with their earnings reports and other disclosures. A further 38 percent say this might happen within the next five years.

The survey finds a high percentage acknowledging blockchain as potentially disruptive, with 40 percent saying it is the most transformative technological breakthrough since the internet.

Nearly a third of institutional investors believe blockchain may soon be represented in the boardrooms and 31 percent of respondents forecast that within three to five years publicly listed companies will have to create a ‘head of blockchain’ position to sit on the board alongside other directors.

Some public companies already have a head of blockchain, though not at executive level. Santander became the first company to use blockchain for AGM voting in 2018, and JPMorgan and UBS already have teams focusing on ‘ledger technology’ – a consensus of shared digital data geographically spread across multiple sites, countries or institutions.

Blockchain is a technology that allows transactions in a crypto-currency securely via a decentralized and transparent platform, without the need to rely on third-party intermediaries. Its emergence around 10 years ago was a response to an erosion in trust in traditional institutions and has inspired a new generation of solutions aimed at exploring ways to reduce financial risk and exchange assets cheaply and securely.

GBBC CEO Sandra Ro says the pressure from investors highlights the increasing recognition of the technology’s potential to overhaul existing business models. ‘Increasingly, the winning organizations of the future will be those that have a clear and comprehensive strategy for blockchain and those that are committed to implementing and using it to transform their organization,’ Ro notes in a statement.

‘It is perhaps not surprising that investors will soon want to know what companies are doing in this area, and that they have confidence in the executives chosen to implement the programs.’