Abstract
This paper assesses the impact of artificial intelligence on the directors’ duty of care, skill and diligence as set out section 76(3) of the Companies Act 71 of 2008.
Technologies such as artificial intelligence which are associated with the Fourth Industrial Revolution are disrupting all spheres of life and corporate governance is no exception. On the one end of the artificial intelligence spectrum are assisted/augmented tools, which have little or no independent decision-making abilities, the humans that use them are the ultimate decision-makers. On the opposite end of the spectrum are the autonomous tools, that can make decisions independent of humans. The so called robo-directors fall within the latter category. The South African legal framework is designed to regulate natural and juristic persons and would have to be amended to include autonomous artificial intelligence. However, autonomous intelligence has not yet developed to a level that some form of personhood would have to be assigned to it.
Section 76(4) permits directors to delegate to and rely on the advice of experts. On a broad purposive interpretation of the section, this can be extended to artificial intelligence. In the circumstances the directors should not blindly rely on the advice of the artificial intelligence since they would ultimately be responsible for the delegated tasks.
Artificial intelligence that can undertake analysis of complex and vast datasets, an ability which previously required human intellect, can be used to improve a company’s efficiency and productivity. In light of this and the other advantages associated with artificial intelligence, a director may need to use artificial intelligence in order to fulfil the duty of care, skill and diligence. However, artificial intelligence usage should not be mandatory, rather each case should be assessed on its facts.