Open Access Research Article

REDEFINING CORPORATE ACCOUNTABILITY IN THE AGE OF GENERATIVE AI: A STUDY OF DISCLOSURE OBLIGATIONS AND DIRECTORS' LIABILITY IN INDIA

Author(s):
AVIPSA GANGULY LONE TACHU
Journal IJLRA
ISSN 2582-6433
Access Open Access
Volume 3
Issue 8
Download PDF Open PDF Citation Search Scholar

Abstract

The use of generative AI in corporate disclosure and reporting is growing rapidly by creating new opportunities but at the same time poses legal challenges as well related to corporate governance and director’s liability. Companies’ use AI tools increasingly in preparation of annual reports, financial statements and environmental social and governance reports(ESG) reports and regulatory filings which enables companies to process information effectively and maintain consistency in corporate reporting and disclosure. However, the use of AI in corporate reporting may also result in incorrect or incomplete disclosures raising concerns regarding transparency, investor protection and corporate accountability. This study examines the legal implications of using Generative AI in corporate disclosures specifically related to directors’ responsibilities under the Companies Act, 2013. Section 134(3) and 134(5) supports your discussion on the Board's Report, the Directors' Responsibility Statement, and responsibility for financial records and internal financial controls[1]. It discusses the relevant provisions of the Act including sections 134, 166 and 149(12) to assess directors’ statutory duties, standards of care and accountability for false, inaccurate or misleading AI generated informations. The study further examines legal concerns regarding insufficient human oversight, excessive dependence on AI generated outputs, determination of responsibilities between companies and AI service providers and importance of conducting proper verification and maintaining accurate records. Additionally, the research discusses about the need for strong internal control mechanisms, appropriate risk management systems, confidentiality measures and potential guidelines from the Securities and Exchange Board of India (SEBI). The study is based on doctrinal legal research to evaluate applicability of existing legal frameworks and legal principles to concerns associated with AI generated corporate reporting and disclosures. It emphasises that the application of AI does not diminish the directors’ statutory duties or exempt companies from complying with corporate disclosure obligations. The study concludes that responsible use of AI in corporate reporting needs adequate human supervision, careful review of information and clear accountability must be taken for any false or misleading informations or disclosures. Appropriate regulatory measures are necessary to manage legal implications of using generative AI in corporate disclosure and reporting. [1] Companies Act, 2013

Published Paper

PDF Preview
Download Open

Author Details

Authors: AVIPSA GANGULY & LONE TACHURegistration ID: 1013583 | Published Paper ID: IJLRA13583 & IJLRA13584Approved ISSN: 2582-6433 | Country: Delhi, India

Article Information

REDEFINING CORPORATE ACCOUNTABILITY IN THE AGE OF GENERATIVE AI: A STUDY OF DISCLOSURE OBLIGATIONS AND DIRECTORS' LIABILITY IN INDIA

Authors: AVIPSA GANGULY, LONE TACHU

  • Journal IJLRA
  • ISSN 2582-6433
  • Volume 3
  • Issue 8
Citation Download Paper Full Details Search on Google Search on Google Scholar

About Journal

International Journal for Legal Research and Analysis

  • AbbreviationIJLRA
  • ISSN2582-6433
  • AccessOpen Access
  • LicenseCC 4.0

All research articles published in International Journal for Legal Research and Analysis are open access and available to read, download and share, subject to proper citation of the original work.

Creative Commons

Disclaimer: The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of International Journal for Legal Research and Analysis.

Current Issue

Ethics and Policy

For Authors