Beyond Human Oversight: Corporate Law and the Case for AI Directors

Corporate laws in the United States require corporations to be governed by a board of directors consisting of humans—otherwise known as the natural person requirement. Mandating governance by individual persons stands in contrast to typical American business ideals and the freedom of contract. There are various reasons for corporate law’s imposition of the natural person requirement—many of them historical. But the justification for the natural person requirement has not been sufficiently critiqued, particularly in the context of AI. This Note argues this corporate law requirement should be amended to give corporations the option to permit AI directors in addition to other human and organizational entity directors. After reviewing the current corporate law landscape, this Note shows that the changes advocated for are quite simple to implement from a purely legal standpoint. Next, the Note presents three reasons for amending the requirement: (1) AI directors can be beneficial in ways that human directors cannot; (2) the justifications normally put forth in support of the natural person requirement fail; and (3) doing so would promote American ideals. Lastly, this Note discusses additional caveats and considerations to its proposal and compares approaches to organizational entity directors to the proposal made in this Note. The natural person requirement is outdated when considered in the context of modern artificial intelligence technology, and it should be amended to provide corporations with flexibility in designing their boards of directors.