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Blockchain Governance Roland July 31, 2023
Blockchain Governance
Circular Revolution

Blockchain Governance

In this research, we have prototyped a Blockchain governance structure that would support the type of supply chain and deep leasing sale of service model that is the context for our Blockchain demonstrator. We identified an articulated, three governance layers, as introduced in R. van Pelt, S. Jansen, D. Baars, and S. Overbeek, ‘Defining Blockchain Governance: A Framework for Analysis and Comparison’, Inf. Syst. Manag., vol. 38, no. 1, pp. 21–41, 2021. We focused on designing, a governance structure that runs the routine operational governance of the Blockchain and underpins the day-to-day transactional business of the supply chain. One of the challenges we identified, is that it is an unreasonable expectation for many of the suppliers in a manufacturing supply chain to construct and code a blockchain. Therefore, in our prototype governance structure, we created a Blockchain Foundation, which was answerable to all suppliers in the chain, and contained the technical competence to act independently and on behalf of the suppliers in creating, coding and maintaining the Blockchain to support business agreements and processes that are to be undertaken automatically via the blockchain. The illustration shows the governance accountability via the red arrows and the operational business flow via the green arrows. In terms of governance, we can see that the supply chain suppliers & customers reside directly on the top of the structure both in the Off-chain stakeholders and On-chain governance layers. These organisations are represented by each having a voting member on the blockchain governance. These voting members hold the blockchain Governance Committee to account. The Blockchain governance committee working in the independent Blockchain Foundation tasks and monitors the Technical blockchain team that works on behalf of the foundation in service of the organisations in the supply chain. The organisations in the supply chain that participate in running and governing the blockchain also have technical administrators that run their blockchain node on their behalf. The operational business process illustrated by the green arrows shows a business agreement made by two organisations in the chain, this agreement is then aligned with some supply chain T&Cs by the foundation (these ensure that the sale of services contract works for suppliers up and down the chain). These business terms are then translated into blockchain code under the authority of the Governance Committee and chain code updates are then deployed to organisations on the blockchain to update their blockchain nodes.

Blockchain governance structure

We created, tested and challenged the Blockchain governance structure through three usage scenarios: Routine capture and updating of usage data for the sale of service contracts; onboarding a new supplier in the supply chain and blockchain; and Dealing with critical part failure. The design helped in understanding how various constraints on access to shared and private data contained on the Blockchain, in particular dealing with ensuring commercial confidentiality for sensitive parts of contracts between suppliers and customers and in balancing that with access to common usage information used to calculate sale of service billing throughout the chain. This work also considered the implications of underperforming suppliers in the supply chain and how that affects other participating organisations as they’re not directly contracted to underperforming suppliers in the supply chain but nevertheless could be affected by it through loss of revenue due to the vehicle not being in use. Further work could consider, agreeing specific endorsement policies with suppliers to identify their preferences that they believe would engender trust in the system. In addition to thinking about the role of drivers (end customers) in the governance of the blockchain that underpins the supply chain.