Corporate Governance and Board Accountability in AI-Based Decision Making: Emerging Compliance Challenges in India

Abstract

Artificial intelligence has moved from the periphery of corporate operations to the centre of strategic and operational decision-making, touching credit underwriting, trading, hiring, surveillance and risk management. This shift raises an unresolved question for Indian corporate law: who is accountable when an algorithm, rather than a human director, drives a consequential decision? This paper critically examines the interface between corporate governance norms under the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the rapidly evolving soft-law and sectoral AI governance architecture in India, including the Ministry of Electronics and Information Technology's India AI Governance Guidelines, the Reserve Bank of India's Framework for Responsible and Ethical Enablement of Artificial Intelligence, and the Securities and Exchange Board of India's AI/ML governance measures. It argues that while these instruments impose a nominal requirement of board-approved AI policies, they leave the underlying question of directorial standard of care, liability allocation, and algorithmic explainability substantially unresolved, creating a widening accountability gap that Indian corporate law is presently ill-equipped to close.

Keywords