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: 2 Feb 2023
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: Suggested Citation