No matter which precise issues emerge as central for 2025 and beyond, one reality has remained constant: Shareholders appreciate thoughtful and data-rich disclosures that reflect the changing concerns of the times.
15% of companies in the S&P 500 provided some disclosure of board oversight of AI in their proxies, according to analysis by ISS-Corporate on March 21. Many experts believe that AI disclosures are about to become
de rigueur for public companies. In the SEC’s 2024 Examination Priorities, artificial intelligence was among a handful of topics that the agency specifically addressed. Meanwhile, about 41% of S&P 500 companies are already
making some mention of AI in their annual reports or 10-Ks, ac- cording to Bloomberg Law. Tese percentages are almost certain to continue to ratchet upward.
Looking Ahead Following are four takeaways based on 2024 proxy trends: 1. Continue to keep an eye on universal-proxy trends. Te shift to a universal proxy card has not proven to be the bonanza for shareholder activists that public companies feared. In fact, as can be seen from the major wins for corporate management in 2024, there are even signs that the universal proxy may be boomerang- ing and proving to be no help to activists at all. Tat said, many experts believe it’s still too early to tell what the long-term effects of the universal proxy will be. Tis rule change is a powerful one and it may take time for its full impact to be felt.
2.Be proactive about explaining corporate
actions.Now more than ever, the C-suite seems to grasp that engaging with sharehold-
niri.org/ irupdate
ers can dissipate much of the rancor and distrust that prompts the filing of a shareholder proposal in the first place. As the New York Times said in early April about Te Walt Disney Company’s victory against activist Peltz, “a robust defense matters.” 3. Consider classifying AI as a governance issue. Just as cy- bersecurity is increasingly viewed as a governance issue, AI can arguably fit the same bill. For some companies, discussing AI policies and procedures in an ESG or sustainability report therefore makes sense, and is a way to heighten attention to an issue of growing importance. 4. Err on the side of more communications, not less. In a sur- vey by KPMG, 41% of boards said they spent significantly more time discussing risk disclosures, including cyber and AI, in 2024, versus only 25% who said the same in 2023. In addition, 35% of boards said they spent significantly more time discussing board composition, including skills and diversity, in 2024, versus 33% last year. Given these trends, cyber, AI, and board composition may be hot topics during the coming year. No matter which precise issues emerge as central for 2025 and beyond, one reality has remained constant: Shareholders appreciate thoughtful and data-rich disclosures that reflect the changing concerns of the times. IR
Richard Carpenter is CEO at Bladonmore;
richard.carpenter@
bladonmore.com.
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