The Digital Life of Modern Corporations: Corporate Management Mechanisms and What the Future Holds

Abstract

Digital transformation of the economy has redefined approaches to the issues of legal capacity, corporate governance and management of business processes. Traditional management mechanisms are no longer competitive unless used in conjunction with dynamically developing digital technologies. This article reviews the lifecycle of a "digital corporation" from the moment of its establishment (i.e., from the moment it acquires legal capacity), the processes related to its governance and management (intra-corporate and intra-productive relations), as well as the documentation of the outcome of its business and production activities. We discuss the "digital footprint" left by corporations in public registers, a unified space of trust implemented as a digital interactive environment, "digital afterlife," and the adjustment of the legal capacity of corporations in view of the automation of their business processes. Furthermore, we provide several examples of digital management tools that are replacing traditional forms of management that rely solely on human cognition. We introduce three types of digital management: remote management (exercised by humans); smart management (based on algorithms designed by human engineers); and artificial intelligence (AI) management (that does not require human involvement). The article discusses the distinctive characteristics of each of these types of management and their potential joint application. Legal risks associated with the use of digital technologies for the assessment and documentation of production and economic activities (e-accounting, cloud data, open-access information, public registers) are identified. The study relies on empirical economic, legal and technological data pertaining to the legal status of a modern mixed-capital business corporation. We present an overview of currently available IT solutions for digital corporation (e-corporation) management and modification of traditional management tools, and provide an assessment of the prospects for the future development of these technologies. We emphasize the role of law in the digitalization of the economy and offer approaches to legislative work aimed at the legal regulation of modern corporate management.