Artificial Intelligence And Corporate Governance In India: Rethinking Board Accountability, Fiduciary Duties And Regulatory Oversight
Jerom Stuward J, LL.M., Presidency University, Bangalore
ABSTRACT
The increasing integration of Artificial Intelligence (AI) into corporate decision- making is transforming the manner in which boards identify risks, evaluate information, formulate strategies and exercise managerial oversight. While AI can enhance efficiency and analytical capacity, its growing role in corporate governance creates a fundamental legal question:
Whether existing Indian corporate law can adequately determine responsibility when directors rely upon AI-assisted or AI-driven decisions that result in corporate harm, regulatory failure or breaches of fiduciary obligations.
This paper examines the adequacy of the Companies Act, 2013, particularly the statutory duties imposed upon directors under Section 166, in addressing accountability within an increasingly algorithmic corporate environment. It analyses the principles of due care, skill and diligence, independent judgment, good faith and board oversight in light of emerging forms of AI-enabled decision-making. The paper further examines the implications of algorithmic opacity, excessive technological dependence, inadequate human oversight, data- related risks and the potential displacement of managerial responsibility. Through a doctrinal and comparative legal methodology, supported by Indian corporate governance jurisprudence and contemporary regulatory developments, the study also evaluates whether responsibility can meaningfully be attributed among directors, senior management, compliance personnel, technology providers and the corporate entity itself. Rather than treating AI as an independent legal decision-maker, the paper argues for a human-centred accountability framework in which technological assistance does not dilute fiduciary responsibility. It proposes an AI Corporate Governance Accountability Framework incorporating board-level AI oversight, documented decision-making, algorithmic due diligence, explainability, audit mechanisms, disclosure standards and regulatory supervision.
Keywords: Artificial Intelligence, Corporate Governance, Board Accountability, Fiduciary Duties, Regulatory Oversight.
