Trustworthy AI and Corporate Governance – The EU’s Ethics Guidelines For Trustworthy Artificial Intelligence from a Company Law Perspective

Abstract

AI will change many aspects of the world we live in, including the way corporations are governed. Many efficiencies and improvements are likely, but there are also potential dangers, including the threat of harmful impacts on third parties, discriminatory practices, data and privacy breaches, fraudulent practices and even ‘rogue AI’. To address these dangers, the EU published its 'Ethics Guidelines for Trustworthy AI’. The Guidelines produce seven principles from its four foundational pillars of respect for human autonomy, prevention of harm, fairness and explicability.

If implemented by business, the impact on corporate governance will be substantial. Fundamental questions at the intersection of ethics and law are considered but, because the Guidelines only address the former without much reference to the latter, their practical application is challenging for business. Further, while they promote many positive corporate governance principles, it is clear that the Guidelines' general nature leaves many questions and concerns unanswered.

In this paper we examine the potential significance and impact of the Guidelines on selected corporate law and governance issues. We conclude that more specificity is needed in relation to how the principles therein will harmonise with company law rules and governance practices. However, despite their imperfections, until harder legislative instruments emerge, the Guidelines provide a useful starting point for directing businesses towards establishing trustworthy AI.

Keywords: Artificial intelligence, AI, corporate governance, corporate law, company law, EU Guidelines for Trustworthy AI, human agency, oversight, privacy, data protection, transparency, diversity, accountability

JEL Classification: K20, K22, O30, O32, O33