Artificial Intelligence And Corporate Governance: Emerging Legal Challenges In India
- IJLLR Journal
- May 24
- 1 min read
Amritanshu Shekar, Assistant Professor, ICFAI Law School, ICFAI University, Jharkhand
ABSTRACT
Artificial Intelligence (AI) has gradually transformed from a technological support mechanism into a central component of modern corporate governance. Corporations increasingly rely upon AI systems for compliance monitoring, risk assessment, financial forecasting, shareholder engagement, recruitment, cybersecurity management, and strategic decision-making. While these developments improve efficiency and reduce operational costs, they simultaneously create complex governance concerns involving accountability, transparency, fiduciary obligations, algorithmic bias, data protection, cybersecurity, and regulatory oversight. Existing corporate governance frameworks, including the Companies Act, 2013 and securities regulations in India, were predominantly designed around human-centred decision-making processes.
This article critically examines the governance challenges arising from the integration of AI into corporate administration and management. It analyses the applicability of traditional corporate governance principles to algorithmic decision-making structures and evaluates whether current Indian corporate law sufficiently addresses AI-related governance risks. The article further studies relevant judicial precedents concerning directors’ duties, fiduciary obligations, negligence, corporate accountability, and technological governance. Comparative references to international regulatory developments, including the European Union Artificial Intelligence Act and OECD AI Principles, are also incorporated to understand evolving global standards. The article concludes by proposing a balanced regulatory framework emphasising explainable AI, human oversight, algorithmic accountability, and enhanced board responsibility within corporate governance structures.
Keywords: Corporate Governance, Artificial Intelligence, Directors’ Liability, Companies Act, 2013, AI Regulation.
