Appointing Artificial Intelligence as Director of a Company: Utopia or Reality of the Future?

Abstract

The artificial intelligence (AI) technologies are developing rapidly nowadays so that the companies start benefiting from them by appointing AI as a ‘director’ of the company. This leads to the significant transformation of social relations. Therefore, this research is aimed at creation of the model implementing AI to the corporate governance and gives the answer to the following question: how the procedure and consequences of the appointing AI as a director of a company should be legally regulated; and what auxiliary changes should be conducted in the legal doctrine and legislation?The study shows that the legal regulation of an AI director has a lot in common with that of an ordinary human director. The differences are based on the absence of ‘purely human’ attributes (e.g. personal interests, intent, etc.) and on the limited legal capacity of an AI (e.g. AI cannot be held liable). The damages caused by the malfunctions of the soft-or hardware are to be covered by the responsible human within the ‘product liability’ concept, while the risk of AI’s failure to perform the director’s duties is born by the company. On this stage, the shift from the adversarial court proceedings to the investigatory proceedings resulting in the insurance indemnification to the company is suggested. Further research is needed to develop new approaches, to broaden and improve the suggested one, which can facilitate diversification of corporate governance and increase its effectiveness.