Abstract This article examines how artificial intelligence (AI) is reshaping the board of directors’ monitoring function in an era of heightened corporate accountability. Modern corporate governance has long assumed that boards of large, complex corporations primarily serve as monitors of managerial decision-making. Yet, persistent institutional failures, limited director time, inadequate and asymmetric information, and constraints in board composition continue to undermine effective oversight, contributing to significant compliance and ethical lapses. At the same time, escalating regulatory obligations, particularly in areas such as climate-related risk and sustainability reporting, intensify pressure on boards to obtain timely, accurate, and comprehensive information. AI presents both a potential remedy and a profound challenge to this governance landscape. AI systems promise efficiency gains, enhanced data analysis, and the capacity to augment board expertise, thereby mitigating traditional constraints. However, their use also creates new risks relating to opacity, bias, and diminished human vigilance, amplified by cognitive-miser behaviour and automation bias. Current corporate law frameworks were developed for human decision-makers and provide limited guidance on accountability when directors rely on AI-generated insights or when AI systems drive core corporate functions. Existing defences, such as reliance, delegation, or business-judgment safe harbours, offer little protection where decisions stem from opaque or inadequately supervised AI processes. The article argues that effective integration of AI into corporate governance requires an explicit, legally grounded ‘human-in-the-loop’ approach. It proposes reforms that mandate human oversight of AI-facilitated decisions, ensure transparency through auditability and disclosure of AI use, and assign responsibility to individuals with appropriate AI-related expertise: the ‘right human in the loop’. External audits and regulatory supervision should complement internal governance mechanisms to prevent erosion of accountability. As AI increasingly permeates corporate decision-making, governance frameworks must evolve to preserve responsibility, transparency, and trust in the board’s monitoring role.
Kourabas et al. (Wed,) studied this question.