What is a DAO (Decentralised Autonomous Organisation)?
Ultimately it will define future business and company models.
In traditional companies, all employees/agents of the company have employment contracts that regulate their actives, power and relationships within the company. This contract is enforced by both the company and also the legal system of the country where the company is operating - so if anything goes wrong the legal contract will be pursued in court.
DAO's on the other hand are typified by blockchain technology to provide a secure and transparent digital ledger. They rely on smart contracts, or pre-programmed rules that describe what can happen in the system. The people within the organisation interact with each other according to a self enforcing open source protocol. Individual behaviour is incentivised through native tokens issued to the participants in the DAO. The tokens can be used as voting rights or to complete transactions - contributing towards any sort of decision that needs to be made and ensuring cryptographically guaranteed democracy. The transparent rules are enforced by machine consensus and there is only one governing law (the protocol/smart contract) regulating the behaviour of all network participants. All transactions of the organization are recorded and maintained on a blockchain.
In this system, not only is data transfer much faster and in real time, it also allows companies to operate without traditional hierarchical management. Trusted third parties can also be eliminated, thus simplifying all transactions i.e. the smart contract will define the rules and so there will be no need for interacting with law firms, financial P2P transactions can take place and so there will be no need for involving banks etc.
There are still big problems to overcome in both technology and mindset for this system to be effectively implemented in society and the smart contracts would have to be supported by a turing complete platform. But when solutions to these problems are found (and trust me they will be!!) the benefit to society and individuals will be profound!