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THE DIFFUSION OF ARTIFICIAL INTELLIGENCE IN GOVERNANCE OF PUBLIC LISTED …
THE DIFFUSION OF ARTIFICIAL INTELLIGENCE IN GOVERNANCE OF PUBLIC LISTED
COMPANIES IN MALAYSIA
Introduction
In Malaysia, the adoption of AI in corporate governance is still in its early stages, despite the potential benefits it offers in enhancing productivity and decision-making processes.
Explores the diffusion of AI in the governance of public listed companies in Malaysia, examining the current stage of AI implementation and the challenges faced during this process.
The integration of AI, a key component of the Fourth Industrial Revolution (IR 4.0), presents an opportunity to address these challenges by automating decision-making processes, reducing human error, and enhancing overall efficiency.
It involves a content analysis of the latest annual reports from 806 companies listed on the main market of Bursa Malaysia.
Aim of research
The aim of this research is to investigate the diffusion of Artificial Intelligence (AI) in the governance of public listed companies in Malaysia
seeks to understand the current stage of AI implementation, the challenges faced during this process, and the potential benefits AI can bring to corporate governance.
Problem Statement
Public listed companies in Malaysia are facing increasing pressure to enhance their financial performance and governance practices
the adoption of AI in corporate governance remains limited.
exploring the extent of AI implementation and identifying the behavioral and legal challenges that hinder its adoption.
Significance of the Study
Enhancing Corporate Governance: This study provides insights into how AI can improve the governance practices of public listed companies, leading to better decision-making and increased transparency.
Identifying Challenges: By highlighting the behavioral and legal challenges faced during AI adoption, this research offers valuable information for policymakers and corporate leaders to develop strategies to overcome these obstacles.
Contributing to Knowledge: The findings of this study contribute to the existing body of knowledge on AI innovation in corporate governance, offering a foundation for future research in this area.
Practical Applications: The results can guide public listed companies in Malaysia on how to effectively implement AI in their governance practices, ultimately enhancing their competitiveness and sustainability.
Contribution and Relevance to Organizations
Strategic Insights: This research provides valuable insights into the strategic implementation of AI in corporate governance.
Enhanced Decision-Making: The study highlights how AI can improve decision-making processes by reducing human error and increasing efficiency.
Competitive Advantage: By adopting AI, organizations can gain a competitive edge in the market.
Policy Development: The findings of this research can inform policymakers and corporate leaders about the necessary steps to overcome behavioral and legal challenges in AI adoption.
Future Research Foundation: The study contributes to the existing body of knowledge on AI innovation in corporate governance, providing a foundation for future research.
Organizational Adaptation: Understanding the diffusion of AI and its challenges helps organizations prepare for the future.
Theoritecal Framework
This study uses Diffusion Theory to explain how AI spreads among public listed companies in Malaysia.
Diffusion Theory helps us understand how new ideas and technologies are adopted over time
Findings
AI Awareness and Adoption
Less than 20 out of 806 public listed companies in Malaysia mentioned “artificial intelligence,” “big data,” or “machine learning” in their annual reports.
These mentions were primarily found in the Chairman’s Statement and future strategic business plans, indicating that AI adoption is still in its infancy or awareness stage.
Challenges in AI Adoption
Behavioral Challenges: Resistance to change and varying levels of acceptance among organizational members.
Legal Challenges: Concerns about data security, privacy, and the legal implications of AI adoption.
Current Stage of AI Diffusion
Most companies are at the knowledge or innovator stage, where they are discussing and gathering information about AI but have not yet taken significant steps towards implementation.
Discussion
Behavioral Challenges
Resistance to change is a significant barrier, with employees and management showing reluctance due to uncertainty and perceived risks.
Effective communication and leadership are crucial to overcoming resistance and fostering a culture that embraces AI.
Legal Challenges
The legal framework needs to evolve to address issues related to AI, such as data protection, liability, and cybersecurity.
Strategic Implications
Companies need to develop clear plans and strategies for AI adoption, including adequate funding and regular monitoring.
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