ROCKVILLE, Md. (March 21, 2024) – ISS-Corporate, a leading provider of compensation, governance, cyber risk monitoring, and sustainability offerings to help companies improve shareholder value and reduce risk, today announced the results of a comprehensive analysis of board oversight and directors skills related to artificial intelligence (AI), finding that roughly 15 percent of companies in the S&P 500 provide some disclosure in proxy statements of board oversight of AI. The analysis examined DEF 14As filed by S&P 500 companies between September 2022 and September 2023, with a company viewed as having board oversight of AI if it disclosed the presence of board or committee responsibility over AI; a director(s) with AI expertise; and/or an AI ethics board or similar governing body tasked with overseeing related topics.
The report found that disclosure of board AI oversight was concentrated in the Information Technology sector, with 38 percent of companies in that space disclosing some level of board oversight or expertise. The sector with the second most prevalent disclosure was Health Care, with 18 percent of companies providing disclosure.
The most common evidence of a board’s readiness to oversee AI-related risks and opportunities is found in the skills and experiences of its board members, and the analysis found that 13 percent of companies had at least one director with AI-related expertise, compared to 1.6 percent with explicit board or committee oversight of AI and 0.8 percent with an AI ethics board. The Information Technology sector again led in prevalence of AI oversight, with 30 percent of IT companies having at least one director with AI-related expertise.
Explicit disclosure of full board or committee of AI oversight is still rare, with just 1.6 percent of the S&P 500 providing specific disclosure of this type of structure. When oversight responsibility on AI is delegated to a committee, the analysis finds that an existing committee’s scope is typically expanded to oversee this new area of risks and opportunities as opposed to creating a new committee. For example, some companies have recently added technology-related risks such as cybersecurity to the Audit Committee’s risk oversight responsibilities and have further expanded the scope to entail AI-related risks. There are also those companies that have a dedicated Technology Committee whose oversight responsibilities include a broad range of technology-related topics, including AI, and others that are approaching AI from environmental and social impacts and regulatory considerations, delegating the AI oversight responsibility to a committee tasked with public policy matters and/or environmental and social risk oversight.
“Artificial intelligence will play prominently over the course of the forthcoming U.S. annual meeting season, both in terms of investor engagement with portfolio companies and through the shareholder proposal process,” said Marija Kramer, Head of ISS-Corporate. “Look no further than the nearly 40 percent backing last month for a first-time, AI-related shareholder resolution at Apple to see institutional investors’ interest in this topic.”
Read ISS-Corporate’s full analysis here.
###
About ISS-Corporate
ISS Corporate Solutions, Inc. (“ISS-Corporate”) is a leading provider of cutting-edge SaaS and high-touch advisory services to companies, globally. Companies turn to ISS-Corporate for expertise in designing and managing governance, compensation, sustainability, and cyber risk programs that align with company goals, reduce risk, and manage the needs of a diverse shareholder base by delivering data, tools, and advisory services. ISS-Corporate’s global client base extends across North America, Europe, and Asia, as well as other established and emerging markets worldwide.
About ISS STOXX
ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,400 professionals operating across 33 global locations in 19 countries. Its approximately 6,400 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.
Media Contact:
Audrey Dedrick
Associate, Communications
media@iss-corporate.com
Roughly 15 Percent of Large U.S. Companies Disclose Board Oversight of AI, ISS-Corporate Analysis Finds
ROCKVILLE, Md. (March 21, 2024) – ISS-Corporate, a leading provider of compensation, governance, cyber risk monitoring, and sustainability offerings to help companies improve shareholder value and reduce risk, today announced the results of a comprehensive analysis of board oversight and directors skills related to artificial intelligence (AI), finding that roughly 15 percent of companies in the S&P 500 provide some disclosure in proxy statements of board oversight of AI. The analysis examined DEF 14As filed by S&P 500 companies between September 2022 and September 2023, with a company viewed as having board oversight of AI if it disclosed the presence of board or committee responsibility over AI; a director(s) with AI expertise; and/or an AI ethics board or similar governing body tasked with overseeing related topics.
The report found that disclosure of board AI oversight was concentrated in the Information Technology sector, with 38 percent of companies in that space disclosing some level of board oversight or expertise. The sector with the second most prevalent disclosure was Health Care, with 18 percent of companies providing disclosure.
The most common evidence of a board’s readiness to oversee AI-related risks and opportunities is found in the skills and experiences of its board members, and the analysis found that 13 percent of companies had at least one director with AI-related expertise, compared to 1.6 percent with explicit board or committee oversight of AI and 0.8 percent with an AI ethics board. The Information Technology sector again led in prevalence of AI oversight, with 30 percent of IT companies having at least one director with AI-related expertise.
Explicit disclosure of full board or committee of AI oversight is still rare, with just 1.6 percent of the S&P 500 providing specific disclosure of this type of structure. When oversight responsibility on AI is delegated to a committee, the analysis finds that an existing committee’s scope is typically expanded to oversee this new area of risks and opportunities as opposed to creating a new committee. For example, some companies have recently added technology-related risks such as cybersecurity to the Audit Committee’s risk oversight responsibilities and have further expanded the scope to entail AI-related risks. There are also those companies that have a dedicated Technology Committee whose oversight responsibilities include a broad range of technology-related topics, including AI, and others that are approaching AI from environmental and social impacts and regulatory considerations, delegating the AI oversight responsibility to a committee tasked with public policy matters and/or environmental and social risk oversight.
“Artificial intelligence will play prominently over the course of the forthcoming U.S. annual meeting season, both in terms of investor engagement with portfolio companies and through the shareholder proposal process,” said Marija Kramer, Head of ISS-Corporate. “Look no further than the nearly 40 percent backing last month for a first-time, AI-related shareholder resolution at Apple to see institutional investors’ interest in this topic.”
Read ISS-Corporate’s full analysis here.
###
About ISS-Corporate
ISS Corporate Solutions, Inc. (“ISS-Corporate”) is a leading provider of cutting-edge SaaS and high-touch advisory services to companies, globally. Companies turn to ISS-Corporate for expertise in designing and managing governance, compensation, sustainability, and cyber risk programs that align with company goals, reduce risk, and manage the needs of a diverse shareholder base by delivering data, tools, and advisory services. ISS-Corporate’s global client base extends across North America, Europe, and Asia, as well as other established and emerging markets worldwide.
About ISS STOXX
ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,400 professionals operating across 33 global locations in 19 countries. Its approximately 6,400 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.
Media Contact:
Audrey Dedrick
Associate, Communications
media@iss-corporate.com
ESG Disclosure Trends in Canada: Climate Reporting Leads the Way
2022 Canada Proxy Season Review
Investors Await Boeing 737 Max Settlement
Alternatives Regain Popularity Amid Reset