Using Artificial Intelligence as a Corporate Director

Pasban, Mohammadreza; Toosi, Abbas; Mazaheri, Mohammadreza

doi:10.22054/jplr.2023.75192.2772

Document Type : Research Paper

Authors

¹ professor,Faculty of law and political sciences,Allameh Tabataba'i University,Tehran,Iran

² Assistant professor, Faculty of law and political sciences, Allameh Tabataba'i University,Tehran,Iran

³ Phd studebt in private law, Faculty of law and political sciences, Allameh Tabataba'i University,Tehran,Iran

https://doi.org/10.22054/jplr.2023.75192.2772

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 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.

Keywords

Main Subjects

Private Law

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Private Law Research

Using Artificial Intelligence as a Corporate Director

References

References

Volume 12, Issue 44
July 2023
Pages 131-185

Using Artificial Intelligence as a Corporate Director

References

References

Volume 12, Issue 44July 2023Pages 131-185

Volume 12, Issue 44
July 2023
Pages 131-185