AI in the Boardroom: Let the Law be in the Driving Seat

International and Comparative Corporate Law Journal

The University of Manchester Legal Research Paper Series No. Forthcoming

21 Pages Posted: 8 Jul 2021 Last revised: 8 Mar 2024

See all articles by Joseph Lee

Joseph Lee

School of Law, University of Manchester

Peter Underwood

University of Exeter - School of Law

Date Written: June 26, 2021

Abstract

This paper discusses the introduction of artificial intelligence (AI) to the boardroom and the importance of law and regulation in doing so. We argue that AI should be utilised in the boardroom to address the current shortcomings in the corporate governance – corporate short-termism. AI can assist boards as they consider societal interests as it can process data in a manner and at a speed that is beyond the capability of manual systems. With well-designed algorithmic steps, AI can provide guidance that is independent of subjective judgements biased by shareholder short-termism and board opportunism. Company law should be revised to support AI-assisted corporate development by mitigating the legal risks of boards and by encouraging directors to use AI to achieve the ESG goals of the company.

Keywords: AI, Data analytics, Corporate Governance, Shareholder activism, Directors’ duties, ESG, Corptech

JEL Classification: K22, M14, M38, O31, O16

Suggested Citation

Lee, Joseph and Underwood, Peter, AI in the Boardroom: Let the Law be in the Driving Seat (June 26, 2021). International and Comparative Corporate Law Journal, The University of Manchester Legal Research Paper Series No. Forthcoming, Available at SSRN: https://ssrn.com/abstract=3874588 or http://dx.doi.org/10.2139/ssrn.3874588

Joseph Lee (Contact Author)

School of Law, University of Manchester ( email )

Oxford Road
Manchester M13 9PL, M139PL
United Kingdom

Peter Underwood

University of Exeter - School of Law ( email )

Streatham Court
University of Exeter
Exeter, EX4 4QJ
United Kingdom

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