Digital Board of Directors or Board of Directors 4.0

Artificial Intelligence (AI) is no longer just a blockbuster in Sci-Fi movies, but also a significant buzzword in reality. The use of AI in the form of digital boards of directors is increasingly being discussed. A proposal that must be considered from economic, legal, and ethical perspectives.

Digital Boards of Directors

Under the keywords "Digital Board of Directors," "Digital Board Member," or "Board 4.0," the use of artificial intelligence (AI) in boards of directors is increasingly being discussed. An initial experiment with a "digital board of directors" was launched in 2014 when a venture capital firm from Hong Kong declared that the AI VITAL (Validating Investment Tool for Advancing Sciences) had been appointed to the board. Although it later turned out that the whole action was primarily a publicity stunt and VITAL only had observer status without decision-making authority, it raised the question of whether digital boards of directors are a realistic future scenario or might even replace humans.

Economically sensible?

Whether it would be sensible to choose AI as a board member largely depends on the business model of a company. In activities requiring a high degree of rationality and data-driven decision-making, the use of AI is quite realistic and potentially sensible. The use of algorithms can reduce the probability of errors in many areas. However, in industries where human contact is crucial for success and deliberations based on fundamental human values are required, the use of digital boards of directors is less likely.

Legally permissible?

The legal permissibility of using AI is a complex issue that has already produced countless research pages and cannot be conclusively answered here. However, much to that: whether digital boards of directors would be possible under Swiss law divides the opinions of experts. For example, Swiss corporate law prohibits the participation of legal entities and boards of directors, which implies that boards of directors must be natural persons, although the law does not explicitly state this. In partnerships (e.g., general partnerships), the problem arises that the anonymous character of AI runs counter to the person-related and communal fundamental idea of the forms of society. However, it can be argued that an obligation to use digital boards of directors can be derived from the board of directors' duty of care (Business Judgement Rule). Because for data-driven decisions, which must be made within a short time, AI might be better equipped than humans.

Ethically justifiable?

Intelligent robots conquering the world, who doesn't know them from movies and books. The question of whether the use of AI is ethically justifiable at all is repeatedly discussed controversially. By adapting Philippa Foot's trolley problem, the problem was highlighted whether self-driving cars should sacrifice the pedestrian or the driver in an emergency. Also, in terms of using AI in the form of digital boards of directors, various moral and ethical questions arise. For example, whether digital boards of directors would displace their human colleagues from the job market or whether purely rational instead of value-based decisions are at all desirable. The assessment of ethical justifiability largely depends on the question from which moral philosophical corner it is argued. If the question is based on a purely utilitarian calculation, the use of digital boards of directors is justifiable if the associated benefit is greater than the costs; if argued from a virtue-ethical perspective, the answer is probably more complex.

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