AI, Corporate Governance, and Strategic Value: How Boards Integrate AI to Shape Firm Financial Performance, ESG Outcomes, and Sustainable Development

About the Project

Artificial Intelligence (AI) is rapidly transforming economic activity, production systems, and decision-making processes across industries and governments. Firms are increasingly committed to achieving Net-Zero emissions and sustainable development targets. While AI has the potential to improve efficiency, optimise energy use, and enhance climate analytics, it also introduces new challenges. AI systems require substantial computational power, data infrastructure, and energy consumption, which may conflict with climate objectives.

Companies face the dual pressure of maintaining financial performance while meeting environmental, social, and governance (ESG) commitments. The adoption of AI technologies may improve productivity and innovation but may also alter firms’ carbon footprints, governance structures, and sustainability strategies.

Further, the adoption of AI also introduces important governance challenges that require careful oversight from corporate leaders and management boards. These challenges include the risks of algorithmic bias and broader ethical concerns associated with AI systems, as well as issues related to transparency and accountability in automated decision-making processes. In addition, firms must ensure effective strategic oversight of AI-related investments to maximise long-term value creation while managing uncertainty. The growing use of AI may also lead to workforce restructuring and potential job displacement, raising further concerns about organisational adaptation and responsible management practices. Together, these issues highlight the increasing importance of strong corporate governance frameworks in guiding firms through the opportunities and risks of AI adoption.

This project will examine how AI adoption influences financial performance, environmental outcomes, and progress toward sustainable development goals. The project also examines how corporate governance structures shape firms’ AI strategies and outcomes remain limited.

Research questions:

1. How does AI adoption influence firms’ objectives and performance outcomes, including profitability, equity valuation, and sustainability performance?
2. How does AI adoption influence firms’ ability to align corporate strategies with climate targets and Net-Zero commitments?
3. How do corporate governance characteristics influence the effectiveness of AI adoption in improving firm performance and sustainability outcomes?
4. How do management boards adapt their oversight roles and governance mechanisms to manage AI-related risks and opportunities?

The proposed research questions are a guide. Candidates are welcome to refine them or propose new questions, provided they align the objectives of this project.

Research methodology

The methodological approach may include econometric analysis, text or content analysis, quantitative or mixed-method techniques. Applicants are welcome to adopt any of the approaches or propose alternative methodological strategies that align with the aims of the project.

Contributions

The project will have significant contributions to literature, methodology, policy, regulation and practice on AI adoption research, sustainable development and corporate governance.

The project will be supervised by a rich experienced supervision team with extensive experience and wide knowledge in areas of firm performance, sustainable development and corporate governance.

Supervisors:

• Dr Thao Nguyen
• Dr Tamanna Dalwai
• Dr Oyedele Ogundana