HRPA’s recent CHRO survey revealed that 70% of HRPA members view AI and digitization of the workplace as the top issue of immediate concern. Increasingly, issue-oriented shareholders are following that trend. According to a recent Agenda article, the number of shareholder proposals related to AI has increased threefold since last year. Of the 13 AI shareholder proposals submitted in 2024 through May 29, “most AI shareholder proposals have targeted tech and entertainment companies…but [healthcare and food service] are also part of the mix.”
Proposals backed by labor unions: Labor unions emerged as a significant driver of the increased number of AI-related shareholder proposals this year, sponsoring more than 50% of proposals at companies such as Comcast, Chipotle, and Netflix. This represents a shift from earlier years when sponsors were solely ESG investors.
What do these proposals seek? The AFL-CIO proposals, all of which have so far failed or been withdrawn, seek a specific Board committee to oversee AI (Amazon) or transparency on how AI will be used in business operations, disclosure on the company website, and the Board’s role in overseeing ethical guidelines (Apple, Netflix). Arjuna Capital proposals seek reports on AI risks and how companies will remediate potential harms, particularly in the area of misinformation and disinformation (Meta (proposal failed), Alphabet (pending)).
What does this mean for company Boards? Currently, only 13% of S&P companies have at least one director with AI-related expertise. Going forward, Boards will need to be prepared to confront AI-related issues, especially responsible use of AI, by developing Board-level technological expertise. One approach is through Board committees recognizing that “committee carveouts that oversee tech also acknowledge that all companies are in some way tech companies.” (Similar approaches are developing on Board oversight of ESG issues.)
