New Report Explores the Effects of Shareholder Activists’ AI-Related Proposals

As advancements in artificial intelligence transform industries and create new opportunities for corporations, concerns about transparency and the risks of AI innovations continue to grow. These worries have prompted shareholder activists to step in as a first line of defense for investors against the potential adverse effects of AI. In a new report, Intelligize examined activists’ efforts with several prominent companies and whether they are delivering the desired results.

Shareholder activists typically possess a keen awareness of emerging corporate risks that could affect shareholder value. In recent months they’ve been particularly vigilant about companies’ use of AI and have called for safeguards to be implemented to manage the evolving technology. In line with their goal of holding companies accountable, activists have submitted several AI-related proposals for shareholders to vote on, covering topics such as ethical guidelines, third-party human rights impact assessment, board oversight, and the company’s role in facilitating misinformation and disinformation through generative AI.

In the new report, Intelligize examined:

• Shareholder proposals along with their successes and failures
• No-action requests by companies looking to exclude proponents’ AI-related proposals from their 2024 proxy material and responses from the Securities and Exchange Commission
• Companies’ 2024 definitive proxy statements disclosing proponents’ AI-related proposals
• Shareholder voting results

The results? Intelligize found that while activists achieved somewhat modest success, its results should be viewed as excellent progress, given the challenges they’ve faced historically.

Several prominent companies sought — and failed to obtain — no-action relief to exclude AI-related shareholder proposals from their proxy material. Yet, activists have found it difficult to gain shareholder approval at annual meetings.

The report also examined SEC registrants’ risk factor disclosures on AI-related ethical considerations. Based on a comparison of 10-K filings from the first three months of 2023 against the same period in 2024, the number of filings with risk factor sections discussing AI’s ethical considerations increased dramatically.

The report concluded that shareholder activists view actions by companies to manage AI’s risks as insufficient and are likely to submit more AI-related proposals in the future.

For more on Intelligize’s findings about shareholder activists’ AI-related proposals, download a copy of the report.