Recommended Citation
Alfred R. Cowger Jr.,
Corporate Fiduciary Duty in the Age of Algorithms,
14 Case W. Res. J.L. Tech. & Internet
138
(2023)
Available at:
https://scholarlycommons.law.case.edu/jolti/vol14/iss2/1
Abstract
The Age of Algorithms will soon have a seismic impact on fiduciary law and thus, on the fiduciary duty of directors and officers. On one hand, corporate fiduciaries will have access to Artificial Intelligence-based tools which may make their jobs more efficient, more accurate, and more effective. As a result, fulfilling fiduciary duties will be easier, and the use of these tools may significantly lower the exposure of corporate fiduciaries to claims of breaching fiduciary duties. However, artificial intelligence (AI) may be a double-edged sword because those attractive tools will create new standards corporate fiduciaries must meet to fulfill their fiduciary duties. At the same time, the risks and limitations of algorithm-based products will mean that fiduciaries who delegate their decision-making to AI tools will face new claims of fiduciary breaches. Corporate fiduciaries might resign from those roles rather than face these new AI-based legal hazards, and AI-tool developers could decide to withdraw from this market rather than face an avalanche of breach of fiduciary duty claims. To mitigate these risks, the jurisprudence of corporate fiduciary law must be modernized and clarified to establish new but understandable fiduciary obligations and protections for corporate fiduciaries.