CORPORATE GOVERNANCE AND ARTIFICIAL INTELLIGENCE: A REVIEW
Abstract
The increasing adoption of Artificial Intelligence (AI) across corporate operations has introduced a paradigm shift in corporate governance practices in India. From automated compliance monitoring and financial analysis to predictive risk management and strategic decision-making, AI technologies are reshaping the manner in which corporate boards and management function. This review paper examines the legal implications of Artificial Intelligence on corporate governance in India by critically analyzing existing literature, statutory provisions, regulatory guidelines, and policy developments. It focuses on the intersection of AI technologies with the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and emerging data protection and digital governance frameworks. The paper reviews key governance challenges arising from AI integration, including accountability for algorithm-driven decisions, the scope of directors’ fiduciary duties, transparency and explainability of AI systems, data privacy and cybersecurity risks, and potential biases embedded in automated processes. It further evaluates the preparedness of India’s corporate governance framework to address these challenges and highlights regulatory gaps in relation to AI oversight, disclosure norms, and ethical governance standards. Special attention is given to the role of boards in ensuring human supervision over AI systems and aligning technological innovation with stakeholder interests. By synthesizing existing academic and regulatory perspectives, this review aims to provide a comprehensive understanding of how AI impacts corporate governance law in India. The paper concludes by emphasizing the need for adaptive legal reforms, enhanced regulatory guidance, and the incorporation of ethical AI principles to ensure responsible adoption of AI while safeguarding corporate accountability, transparency, and stakeholder trust in the Indian corporate sector.