According to ISS’s analysis of proxy statements filed between September 2022 and September 2023, 15% of the S&P 500 disclose some level of board oversight of AI. For this purpose, the existence of AI oversight was based on disclosure of one or more of the following: (i) board or committee responsibility over AI; (ii) a director(s) with AI expertise; and/or (iii) an AI ethics board or similar governing body tasked with overseeing related topics.
Not surprisingly, board AI oversight disclosure is most prevalent among Information Technology companies (38%), followed by Health Care (18%) and Consumer Discretionary (15%) companies, with director expertise being the most common means of oversight across all industry sectors.
ISS deemed directors to have AI expertise if they satisfied any of the following criteria:
- Current or past employment with companies in AI or relevant industry
- Current or past employment positions relevant to the AI industry
- Board membership with companies in AI or relevant industry
- Certification in AI
- Employment titles related to AI
Just 1.6% of the S&P 500 disclosed express board or committee oversight, with Financials sector companies leading the pack at 4.2%. Less than 1% of companies (limited to Communication Services and Information Technology companies) disclosed an AI ethics or review board.
This post first appeared in the weekly Society Alert!