Private Law
Mohammadreza Pasban; Abbas Toosi; Mohammadreza Mazaheri
Abstract
In the era of rapid technological progress, companies which are important and influential pillars in society, cannot continue their existence with the same old slow methods, commensurate with the speed of impact of technology, especially smart technologies on society, and they should think about using ...
Read More
In the era of rapid technological progress, companies which are important and influential pillars in society, cannot continue their existence with the same old slow methods, commensurate with the speed of impact of technology, especially smart technologies on society, and they should think about using the new and more agile ways of directing the corporation. As the working environment of companies has become more complex, which is caused by the need to process large amounts of information and data and make faster decisions, and on the other hand, scandals caused by the improper performance of company directors, Trust in directors has been weakened. Restoring this trust requires the selection of directors who are far from personal interests and bias and perform their duties with enough loyalty and care. In such a situation, the characteristics of artificial intelligence have attracted the attention of company directors and corporate law experts to the possibility of using it as a director of commercial companies, and in scientific circles, the question of whether AI can be used as a director in the economic and social sectors, especially in commercial companies has become a hot debate. However, the entry of artificial intelligence into the board of directors faces challenges that mostly arise from the autonomy and different characteristics of autonomous artificial intelligence from the technologies before it. The competence to accept the position and how to perform the fiduciary duties and obligations of directors, as well as identifying the regime of responsibility, are the most important challenges in choosing artificial intelligence as a director. The approach and purpose of the article is to explain the competence and the possibility of performing the duties and obligations of directors by artificial intelligence and to identify the efficient responsibility regime, to the extent of proving the possibility of becoming a director. In this regard and in the upcoming article, by studying and reviewing the opinions of artificial intelligence experts and lawyers, it has been compared the performance and characteristics of artificial intelligence and human directors and identified the capabilities of artificial intelligence in the position of a member of the company's board of directors. Regarding the eligibility to accept the position of directorship, it can be said that artificial intelligence, like humans, whose natural characteristics enable them to perform the actions of a representative, has the practical ability to become a director and perform duties as a representative of the company and can adjust its performance to achieve a clear goal that is the company's goal, in a way that we can say it intends. Although artificial intelligence has the practical ability to represent the company, but in order to become a director, only practical ability is not enough and there must be a legislative prescription. In this regard, it is necessary for the domestic legislators and international institutions, considering the capabilities and characteristics of artificial intelligence, to pass laws in order to identify the legal competence for it. Regarding the performance of duties and obligations of directors, due to the characteristics of artificial intelligence, including autonomy, logic, creativity and the ability to make decisions very quickly in complex and difficult situations and process a large amount of data and information, without human intervention, Artificial intelligence has the possibility to make decisions as a director and perform the tasks of directors. The authors' point of view is that with the legal design and coding of artificial intelligence, based on the established standards of company law regarding the duties of directors, artificial intelligence can fulfill the fiduciary duties of directors, away from conflicts of interest and bias, and with sufficient transparency and care. Regarding responsibility, although this technology is new and rapidly growing, most of the currently accepted principles and laws regarding responsibility are still applicable and there is no need to adopt a new approach to responsibility. However, considering the speed of artificial intelligence development, a responsibility regime must be described and implemented that does not lag behind the growth of technology and can act quickly in order to compensate for the damages. On the other hand, considering the risks that identifying any personality for AI will bring, an approach should be taken in the area of responsibility that always the developer or the company using AI as a director is accountable for the actions of artificial intelligence. It seems that a combination of legal regime and compensatory regime can solve the problem of responsibility. In the legal regime, responsibility instead of artificial intelligence and during judicial proceedings is attributed to the developer or company using AI as director, and in the compensation regime, losses are paid through compulsory insurance or a compensation fund or both. The compensatory liability regime increases the speed of compensation because the problems and slowness of the legal regime do not occur, and ensures the damages without entering into the judicial process. Finally, given the topics discussed in this article, AI has important capabilities that make it a good option to be a director. This approach is especially important for countries facing aging populations, migration of directors to more advanced countries or facing cruel sanctions from other countries. Therefore, the legislator should make the necessary regulations to allow companies and The community can benefit from the artificial intelligence as a member of the board of directors.
Private Law
ali pourrezaei; Ali Gharib; Hasan Pashazadeh
Abstract
Today, one of the main players in the economy are companies. These entities are dependent on real persons to play their role, and these persons (directors) act as a member of the company's body. The importance of the company board of directors is that it can be called the executive branch of the company ...
Read More
Today, one of the main players in the economy are companies. These entities are dependent on real persons to play their role, and these persons (directors) act as a member of the company's body. The importance of the company board of directors is that it can be called the executive branch of the company or the strategic government of the company. The management of the company's affairs according to the law and after that according to the will of the shareholders, has been entrusted to this organ, and following the assumption of this duty by the director, duties and powers as well as benefits have been defined for them according to the law, which are necessary for exercising the powers of the directors.Rulemaking in the field of duties and powers of directors in various legal systems is foreseen to achieve a goal that is in line with the goal of establishing the company. In fact, the purpose of establishing a company is to bring together multiple economic players with conflicting interests in order to achieve the common goal of making profit, and since the management of this group is entrusted to directors, the management goal must be determined and be available the necessary tools to achieve this common goal to them. Determining the general duties of directors through regulation is to determine the direction and create transparency for directors.PURPOSEIn this research, the main question is what policies the legislator pursues from regulation in this subject? And how did the Iranian and English legislators act in this regard? Also, this article tries to answer the above questions by descriptive-analytical method and comparative study of Iranian and English law.METHODOLOGYIn this research, a descriptive-analytical method with a comparative view has been used; In this way, first the general duties of directors are explained in in English and Iranian law, and then, with legal reasoning methods, The goals of establishing rules related to the general duties of directors in Iranian law are analyzed and examined.FINDINGSIn English law, the legislator has assigned a role beyond that of a trustee in the field of duties of managers. Therefore, it has predicted duties for the managers in order to achieve the three goals of "preventing conflict of interest", "protecting the company's interests" and "improving the company's status or improving the company's position".The first risk that arises in the relationship between the company and the directors is the misuse of their position in controlling the financial resources of the company, including property, reserves and credit. Therefore, considering the director as a trustee in the internal relations of the company and applying the guarantee of violation executions from this position can be very effective in solving the conflict-of-interest problem. This goal is provided by foreseeing the duty of avoiding the situation of conflict of interest and disclosing the acquisition of interest. One of the shortcomings of the legislation in this field in Iranian law is the failure to require managers to disclose the acquisition of profit. Of course, Article 129 of the legal bill to amend a part of the Commercial Law of 1968 in the transactions of the director with the company, foresees such a task for the board of directors, not the beneficiary director.The purpose of protecting the interests of the company is that the directors, by exercising the necessary care and caution, avoid losses to the company and the loss of its property, financial resources and reserves. This goal is achieved through various tasks. These duties include exercising independent votes or Duty exercise independent judgment, and Duty to act within powers. In Iranian law, by accepting the fiduciary duty for managers, we must accept that the goal of protecting the interests of the company is fulfilled to some extent.In the new law of British companies (2006), the legislator sought an approach to solve the problem of companies in advancing their goals. In this regard, the task of promoting the success of the company was predicted. The task of promoting the success of the company creates requirements for the director beyond the observance of trust, the non-compliance of which creates responsibility for the manager. In other words, the fiduciary duty creates a negative obligation for the director, but the duty to promote the success of the company creates a positive obligation. Positive commitment means improving the company's current situation.It can be inferred from the general duties of managers in English law that the goal of the legislator is to deal with the stagnation of companies and to oblige directors to make changes in their affairs, but this is not inferred from the total regulations governing the laws of Iranian companies.CONCLUSIONLike the English legislator in setting the general duties of directors, the Iranian legislator must pursue the three goals of "resolving the conflict of interest", "preserving the existing interests of the company" and "promoting the position of the company". The first two goals can be achieved despite the shortcomings of the directors' fiduciary duty, but the third goal is not achieved with this duty; because the duty of fiduciary is to maintain the current situation and its promotion needs to be regulated. In English law, the achievement of this goal is pursued with the task of "promoting the success of the company", but in Iranian law, the legislator has not paid attention to policy-making in this subject.Therefore, in amending the existing regulations, attention should be paid to the policy of promoting the company's position and existing status, and rules should be made in the field of general duties of managers according to Iran's legal system.
