ABSTRACT
As Artificial Intelligence (AI) systems become embedded in corporate governance, directors face growing pressure to oversee algorithmic decision-making within an uncertain legal framework. This article argues that the European Union’s Artificial Intelligence Act (AI Act) indirectly reconfigures directors’ obligations. Although not formally addressed to boards, the AI Act introduces substantive governance expectations-ranging from transparency and risk mitigation to human oversight-that reshape directors’ duties under both EU regulation and domestic corporate law. It argues that these developments give rise to a duty of AI due care and AI loyalty oversight. They require directors to exercise informed, anticipatory, and ethically grounded oversight of AI systems, integrating procedural safeguards and technical literacy into their governance practices. Against this backdrop, the article reconceptualises the Business Judgment Rule (BJR), arguing that its continued legitimacy in the algorithmic age depends on embedding AI due care and AI loyalty oversight within its classic structure. Directors who fail to interrogate algorithmic tools-or who neglect the risks entailed in AI non-use-may undermine the normative foundations of the BJR and expose themselves to liability.
Montagnani, Maria Lillà and Passador, Maria Lucia, Fiduciary Duties and Business Judgment Rule 2.0 in the AI Act Age (June 9, 2025).
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