AI-Powered Decision-Making In Corporations: Legal Liability, Corporate Governance, And The Question Of Legal Personhood
- IJLLR Journal
- Aug 15
- 1 min read
Ms. Rubi Chauhan, LL.M., Lovely Professional University, Phagwara
ABSTRACT
The rapid integration of artificial intelligence (AI) into corporate decision- making has transformed how companies operate, driving efficiency, scale, and strategic agility. Yet, this shift also presents unprecedented legal and governance challenges. This research paper examines the evolving intersection of AI deployment and corporate accountability, structured across three key dimensions: legal liability, corporate governance, and the theoretical question of AI personhood. Drawing on case law from the United States, European Union, and India, the paper analyses how courts and regulators attribute responsibility when AI systems cause harm, whether through biased hiring, financial mismanagement, or operational failures. It explores the duties of corporate boards under fiduciary and statutory frameworks, highlighting the increasing risk of liability for directors who fail to oversee algorithmic tools adequately.
The study further assesses arguments for and against granting AI systems legal personhood, ultimately rejecting this approach in favour of distributed accountability models that preserve human oversight. Sector-specific applications in finance, employment, healthcare, and logistics underscore the regulatory fragmentation and gaps in current legal regimes. Empirical data from corporate surveys and governance reports reveal a systemic shortfall in AI oversight, with boards often lacking the expertise or frameworks to manage AI-related risk.
The paper concludes with detailed policy recommendations, advocating for a risk-tiered governance structure, legally mandated AI audits, and enhanced boardroom literacy. By synthesizing comparative jurisprudence, empirical research, and normative theory, this study offers a foundational legal architecture for governing AI in the corporate context, balancing innovation with accountability in the algorithmic age.
Keywords: Artificial Intelligence, Corporate Governance, Corporate Liability, AI Personhood, Algorithmic Liability.
