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Corporate Management in the Age of AI

The working paper discusses the impact of artificial intelligence (AI) on corporate management.

Artificial intelligence symbolised by a robot

12 March 2019

Image credit: Photo by Possessed Photography on Unsplash 

Publication details

Petrin, Martin. (2019) 'Corporate Management in the Age of AI'. Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3346722

Abstract

Recent media reports and press releases have created the impression that Artificial Intelligence (AI) is on the verge of assuming an important role in corporate management. While, upon closer inspection, it turns out that these stories should not always be taken at face value, they clearly highlight AI’s growing importance in management and hint at the enormous changes that corporate leadership may experience in the future. This article attempts to anticipate that future by exploring a thought experiment on corporate management and AI. It argues that it is not an insurmountable step from AI generating and suggesting expert decisions (which is already common today) to AI making these decisions autonomously. The article then proceeds based on the assumption that next-generation AI will be able to take over the management of business organisations and explores the corporate law and governance consequences of this development. In doing so, the article focuses on the fundamental areas of corporate leadership/management structures, managerial liability, and the corporate purpose. It also considers the phenomenon of algorithmic entities and leaderless entities.