AI Joins Samruk-Kazyna's Board Of Directors: What Investors Need To Know

A development that drew significant attention in the field of corporate law was the announcement by Samruk-Kazyna JSC (the "Fund") that an artificial intelligence system known as SKAI had been appointed to its Board of Directors as an independent director, pursuant to a decision of the Fund's sole shareholder ¹. The appointment was further confirmed through a formal notification submitted to the Kazakhstan Stock Exchange (KASE), indicating that SKAI was elected specifically in the capacity of an independent director ².

The rapid progress of generative AI in recent years has broadened the range of tasks it can perform. What initially emerged as a tool for managing day-to-day or routine functions is now being considered for use in more strategic contexts, including participation at board level.

Preamble

This development naturally prompted discussion about potential legal risks associated with such a decision of the Government, acting as the Fund's sole shareholder.

Under Article 58 of the Law of the Republic of Kazakhstan "On Joint Stock Companies" (the "JSC Law"), decisions of a board of directors may be challenged in two specific situations:

1. A board member who did not participate in a meeting or who voted against a decision adopted in breach of the procedures set out in the JSC Law or the company's charter may challenge that decision in court.
2. A shareholder may challenge in court a decision of the board of directors adopted in violation of the JSC Law or the charter, if the decision infringes the rights or legitimate interests of the company and/or that shareholder.

While the legality of the sole shareholder's decision to appoint an AI system to the Board is not in question here, the key issue is whether the Fund's board decisions may acquire a risk of challenge following SKAI's appointment.

Before addressing this, it is worth clarifying why the matter warrants consideration. The answer is straightforward.

The powers of the Fund's Board of Directors, as set out in Article 8 of the Law of the Republic of Kazakhstan "On the National Welfare Fund" of February 1, 2012 (the "Fund Law"), include decisions that may directly affect investor interests. These include, for example:

1. decisions on the placement and pricing of shares;
2. decisions on buy-backs of the Fund's securities;
3. decisions on the structure, quantity and conditions of share placements by entities within the Fund's group on organised markets;
4. participation in the establishment or activities of other legal entities by transferring assets amounting to 25% or more of the Fund's total assets;
5. increases in the Fund's liabilities by 10% or more of its equity;
6. acquisition or disposal of 10% or more of shares (equity interests) in other legal entities;
7. determining the terms of bond issuance and other borrowings amounting to 1% or more of the Fund's equity.

Any uncertainty surrounding, or, in an extreme scenario, a challenge to, a board decision on such matters may adversely affect investors in relation to:

(i) the Fund's own securities or those of its subsidiaries;

(ii) joint ventures established with investors;

(iii) transactions under which the Fund may assume material obligations.

A Brief Digression: International Corporate Governance Practice

Artificial intelligence is already widely used in corporate governance internationally. According to Harvard Business Review, AI tools mainly serve as assistants to board members or as advisory systems supporting the board as a whole ³. They help directors prepare for meetings more effectively, improve the efficiency of discussions, and test the logic and coherence of draft decisions.

A noteworthy case is Aiden Insight, a product developed by the Abu Dhabi-based company G42.

«International Holding Company (ADX:IHC), the global diversified multi-sector investment company, has announced the creation of a new Board Observer position for an 'Artificial Intelligence (AI) Observer', named 'Aiden Insight'» ⁴.

Aiden monitors live discussions, identifies key themes, and provides real-time analysis and recommendations. It can offer data, propose solutions and introduce new concepts, enriching boardroom dialogue ³.

The UK Institute of Directors has emphasised that AI is no longer merely a technical issue: it has become a strategic, operational, ethical, legal and policy matter, accompanied by uncertainties regarding product maturity, ecosystems and value chains ⁵.

Legislative Considerations

This article does not examine the technical or ethical aspects of deploying AI on boards, nor the risks of data leakage, which long pre-date modern AI systems.

Instead, it focuses on whether Kazakhstani corporate law provides grounds for appointing AI as a board member of a joint-stock company, and whether decisions adopted with the participation of such an AI system could be exposed to challenge.

The Fund Law is a special statute that modifies certain mechanisms established under the JSC Law or legislation on state property. However, Article 2(3) of the Fund Law expressly confirms that the JSC Law and the Law "On State Property" apply to the Fund's group unless otherwise provided.

Crucially, the Fund Law does not contain provisions specifying criteria for membership of the Fund's Board of Directors. It does not provide an alternative rule that would override Article 54(1) of the JSC Law, which states: "a member of the board of directors may only be a natural person."

On this basis, it may be argued that appointing an AI system as a board member is not envisaged by current legislation, as AI does not constitute a natural person under Kazakhstani law.

The Fund, in its written response to the Kazakhstan Association of Minority Shareholders (QAMS), referred to Article 8(1) of the Fund Law ⁶:

"The Board of Directors of the Fund shall consist of the chairperson and members elected by the Fund's sole shareholder."

While this provision establishes who elects the directors, it does not create a separate eligibility regime. Interpreting it as superseding the JSC Law's requirements could raise broader questions, such as whether legal entities may be elected as directors - a possibility recognised in some jurisdictions, including the Astana International Financial Centre (AIFC), but not in Kazakhstan's domestic corporate legislation.

Similarly, such an interpretation could affect the requirement for independent directors under Article 54(5) of the JSC Law, which also uses the term "person."

Procedural Law and Its Importance

Equally important are the procedural norms governing board decision-making.

Article 54(1) JSC Law provides that a board member may not delegate the performance of his or her functions to other persons.

Article 58(4) stipulates that a decision by absentee voting is valid only where ballots received within the prescribed timeframe form a quorum.

This creates a practical question:

• how would SKAI participate in absentee voting?
• Would another person sign the ballot?
• Would SKAI's vote be excluded when determining quorum?

Such questions do not challenge the appointment itself but concern the mechanics through which statutory requirements may be observed in practice.

Conclusion

In view of the above, the appointment of SKAI as an independent director may, in practice, raise questions about the procedures used by the Board of Directors, given that AI lacks legal personality (including legal capacity and liability) and cannot independently perform functions such as reviewing documents, expressing a position or signing ballots.

These actions are necessarily facilitated by human operators who upload materials, configure SKAI's participation in meetings, or sign absentee ballots on its behalf - matters which, depending on context, could be interpreted as delegation.

Accordingly, we recommend that:

• Investors entering into transactions with the Fund's group consider obtaining written assurances ensuring compensation of losses (including lost profit) in the event that decisions adopted with the participation of SKAI are invalidated on procedural grounds.
• Investors acquiring securities of the Fund or its group companies may wish to seek formal clarifications from the relevant state authorities and from the Fund confirming the lawfulness of decisions adopted with the participation of SKAI and the absence of grounds for their invalidation due to procedural aspects.

Footnotes

1 Samruk-Kazyna JSC, 2025. First in the Region: Samruk-Kazyna Introduces AI-based Digital Board Member with Voting Rights. [Online] Available at: https://sk.kz/press-center/news/78513/?lang=en [Accessed 24 November 2025].

2 Samruk-Kazyna JSC, 2025. N/A. [Online]

Available at: https://kase.kz/files/emitters/SKKZ/skkz_board_changes_260925_5591.pdf?utm_source=in_materials [Accessed 24 November 2025].

3 HBR, 2025. How Pioneering Boards Are Using AI. [Online] Available at: https://hbr.org/2025/07/how-pioneering-boards-are-using-ai [Accessed 24 November 2025].

4 ADX, 2024. N/A. [Online] Available at: https://adxservices.adx.ae/cdn/contentdownload.aspx?doc=3062148 [Accessed 24 November 2025].

5 IoD, 2025. AI Governance in the Boardroom. IoD Business Paper, p. 4.

6 QAMS, 2025. QAMS QazTradind, Astana: N/A.

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