The influence of Artificial Intelligence Cognitive Biases on Corporate Governance in Making Financial Decisions: Examined Via Throughput Model

As businesses work to leverage artificial intelligence (AI) promise to boost productivity and efficiency, its position in corporate governance (CG) is becoming increasingly important, where AI can be used to streamline fraud detection and compliance procedures, enhancing the entire structure of CG. However, cognitive bias, a prevalent issue in AI systems utilised by businesses for decision-making, is a significant concern. Accordingly, the main aim of this study is to explain the influence of AI cognitive biases on CG in making financial decisions by using throughput model (TM). AI cognitive biases include base-rate neglect, insensitivity to sample size, confirmation bias, availability heuristic, and ambiguity aversion. To achieve this aim, this study adopted the quantitative model, where the questionnaire was designed and distributed to research sample, which consisted of 1491 mangers in British banks, and 141 managers in Iraqi Banks. Then, the questionnaire was analysed by using Statistical Package for the Social Sciences (SPSS) program. The results show that financial decisions will be affected by the existence of AI cognitive biases in both British and Iraqi banks. In addition, the availability of reliable financial information will affect positively on financial decisions in both British and Iraqi banks. Moreover, the results show that the decline of the decision maker's level of knowledge and experience will lead to poor financial decisions in both British and Iraqi banks. Finally, the analysis shows that the disruption of digital technological training will lead to poor financial decisions in both British and Iraqi banks. Based on these findings, this study contributes to a deeper understanding by British and Iraqi banks of AI cognitive biases that affect effective financial decision-making. The study also recommended that British and Iraqi banks should train their employees to use modern technology and improve their cognitive skills.