Connecting worlds: reconciling DAOs and traditional organizations for better collective governance

Abstract

This chapter explores the benefits and challenges of decentralized governance in decentralized autonomous organizations (DAOs). While decentralization promotes broader stakeholder participation and enhances transparency, it also brings significant practical hurdles. Full decentralization can result in inefficiencies, especially as organizations scale, and may lead to unclear accountability. The chapter thus argues that decentralization does not need to be embraced exclusively in its purest form but rather can be integrated selectively into traditional organizational structures. By combining decentralized elements with conventional governance models, through decentralized autonomous committees (DACs), organizations can reap the advantages of automation, transparency, and stakeholder engagement, while maintaining operational efficiency and clarity in leadership. This hybrid approach positions decentralization as a valuable complement rather than a standalone model.