Who needs CEOs? Replace them With DAO!
Executive pay is voted on at least every three years under the Enterprise and Regulatory Reform Act, forcing shareholders and the public to confront how much the leaders take home. Tim Steiner, FTSE 100‘s highest-paid CEO, earned £58.7 million in 2019, which was 2605 times his employee’s mean revenue for that year.
The issue speaks for itself, and it is high time companies question whether they should have a CEO at all.
CEOs or DAO?
DAOs tackle a long-standing governing issue referred to as a major agent by political scientists and economists. This issue happens when the representative of an organization, other persons or entities in an organization, can decide on behalf or influence it.
A moral hazard in such settings happens if the officer acts for himself rather than for the principal’s benefit since the principal cannot monitor his conduct completely. As with Turkey, the operator of the cryptocurrency trading site has received an international arrest warrant. Faruk Fatih Ozer is reportedly fleeing from the 391,000 investors to Albania with an alleged $2 billion.
DAOs are open-source, thus transparent, and, in theory, incorruptible. All transactions of the organization are recorded and maintained on a blockchain. Interests of the organization members are – if designed correctly – aligned by the incentive rules tied to the native token. Proposals take the primary way for making decisions within a DAO, which are voted for by the majority consensus of involved network actors.
DAOs can be Risky
Automation of work, especially in public roles, can be risky. After Microsoft sacked a large group of journalists last year to substitute AI for them, the software’s inability to identify two colored women almost instantly had to deal with the PR catastrophe. After learning to discriminate against women, Amazon’s AI faced the same issue.
The examples are all attempts to automate the kind of work happening without involving other people in the firm. Strategic top-level decisions are different. Company owners discuss the findings before implementation. Workers often feel they can’t talk for fear of the CEO’s disappointment, another reason why they should receive execution.
A Positive Perspective
When automated management and, as Google or IBM calls it, decision intelligence is used; impressive results get achieved. The mass transit system in Hong Kong put software in charge of its maintenance schedule in 2004 and is renowned for being one of the most punctual and fastest running metros in the world.
Despite the few comebacks, we will likely see many more DAOs with various purposes grow alongside Bitcoin’s pioneering technology. Smart property governance can also be incorporated directly into blockchain in conjunction with the “Internet of Things,” enabling monitoring cars, safety deposits, and buildings through autonomous organizations.