New technologies, corporate governance and culture

Michael Anderson Schillig

Chapter 11 in Corporate Governance and Culture in Financial Institutions, 2025, pp 313-339 from Edward Elgar Publishing

Abstract: Traditional corporate governance theory – based on principal/agent and nexus of contact analysis – requires a modification for financial corporations. Where an institution operates under a de facto state guarantee, the taxpayer replaces shareholders as the residual risk bearer. Corporate culture becomes a lever that can be used to align management incentives with taxpayer interests. This chapter seeks to ascertain whether and to what extent new technologies, notably natural language processing and machine learning, can help measure and influence corporate culture in the financial sector. It argues that, despite some downsides, these methods hold promise but require a regulatory underpinning with a focus on algorithm design, adequate training and testing prior to application. In any event, human expertise and accountability will remain crucial for good corporate governance and culture.

Keywords: Principal agent theory; New technologies; Natural language processing; Machine learning; Corporate culture in the financial sector; Human expertise and accountability (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035317899
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