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    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.

    ISS-Corporate is a leading provider of robust SaaS and expert advisory services to companies, globally. ISS-Corporate’s datadriven, research-backed Compass platform empowers businesses to understand and shape the signals they send to institutional investors, regulators, lenders, and other key stakeholders. By delivering essential data, tools, and advisory services, ISS-Corporate can help businesses around the world to be more resilient, align with market demands, and proactively manage governance, compensation, sustainability, and cyber risk initiatives. ISS Corporate Solutions, Inc. (“ISSCorporate”) is a wholly owned subsidiary of Institutional Shareholder Services Inc. (“ISS”) and part of the ISS STOXX GmbH group of companies. ISS-Corporate provides advisory services, analytical tools and publications to companies to enable them to improve shareholder value and reduce risk through the adoption of improved corporate governance practices. The ISS STOXX Governance and ESG research teams, which are separate from ISS-Corporate, will not give preferential treatment to, and are under no obligation to support, any proxy proposal of a corporate issuer nor provide a favorable rating, assessment, and/or any other favorable results to a corporate issuer (whether or not that corporate issuer has purchased products or services from ISS Corporate). No statement from an employee of ISS-Corporate should be construed as a guarantee that ISS FOR IMMEDIATE RELEASE STOXX will recommend that its clients vote in favor of any particular proxy proposal or provide a favorable rating, assessment or other favorable result. For more information, please visit https://www.iss-corporate.com

    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 3,800 professionals operating across 30 global locations in 20 countries. Its approximately 5,500 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.