Companies initially served public interests rather than profits. However, companies nowadays tend to abide by shareholders than consider other stakeholders. For example, a mining company that exploits a mining area may conduct necessary actions to keep doing their business operations to obtain profit for shareholders’ financial benefit, regardless of the negative outcomes on the environment or people around the mining area. This behaviour is also seen in the artificial intelligence (AI) industry. The reluctance of some AI companies to avoid regulatory compliance or governance shows that a profit perspective still exists in this industry amidst public concern over AI as a potentially harmful technology. Therefore, a better governance concept is needed to direct AI Companies to a more responsible company.
Corporate Social Responsibility (CSR) is a governance concept that directs companies to operate responsibly, considering other stakeholders who may interact with them. CSR is beneficial for supporting the proliferation of AI Ethics or AI Governance because it balances profit and non-profit goals in companies.
CSR Starts When Law is Silent
CSR is a long-standing concept that was developed as a response to implementing better corporations’ roles in the community. Michael Blowfield and Alan Murray said that CSR starts at the law ends, meaning that CSR supplements laws and regulations where these legal instruments could not cover more. This argument completes the notion of the societal perspective of stakeholders. Bob Tricker said that the theory departs from stakeholders’ concerns to balance the responsibility, accountability, and power in society. Therefore, two elements of CSR related to AI Governance can be observed.
Firstly, CSR is a concept that is flexible but executable. With the tension between corporations and governments on whether to regulate AI business activities or not, CSR may answer the governance dilemma suffered by the regulators. It is understood that corporations, especially AI Companies, tend to prioritise their resources for product research and profitability. Until now, AI is still an evolving technology that has been deterred by negative perceptions of its safety and reliability. Thus, applying the CSR concept should be aligned with the companies’ corporate governance, which includes the execution of risk management.
Secondly, CSR operates as a ‘carrot’ and ‘stick’ regarding the regulatory regime. ‘Carrot’ means CSR application may grant companies a reputational incentive as an ethical and trusted business actor. Consequently, companies enjoy financial advantages such as ease of loan by banks or investments from institutional investors. ‘Stick’ means companies apply CSR as an obligation of regulation. Indonesia applies this by requiring companies to conduct a dedicated and planned CSR within their annual budget and activities. Therefore, there is an element of sanction for non-compliance with this obligation, which is stated in PP No 47 of 2012, which states that the sanction shall refer to prevailing laws and regulations.
CSR Supports AI Ethics
From the above paragraphs, we see that CSR support the application of law. To some extent, CSR can also support the proliferation and execution of AI Ethics. According to the UNESCO Recommendation for AI Ethics, AI Ethics shall be achieved through the implementation of ethical governance led by the government. Therefore, it can be concluded that AI Ethics is developed under a proper governance system applied by all involved actors, including AI Companies. CSR can support AI Ethics by ensuring that ethical AI becomes the corporate value. Thus, the value will be implemented with policies and governance. The government can choose its goal, either to make ethical AI Governance a ‘carrot’ or ‘stick’.
The Challenge
Even though this idea sounds intriguing, there is a challenge that should be addressed. CSR standards are still not unified. Consequently, companies may choose the scope and area of business that they want to govern with CSR. Thus, there would be inaccuracies in AI ethics as a part of CSR that can be perceived as whitewashing jargon or policies without actual implementation. Therefore, creating a policy for standardising the CSR-AI Ethics application is important. The government can try enacting legislation or promoting international standards. By establishing government initiatives, AI Ethics can be easier to implement and have more impact on society.
