A recent regulatory ruling has mandated that Disney allow its shareholders to vote on whether the company should disclose how it utilizes artificial intelligence (AI). The Securities and Exchange Commission (SEC) has given the green light for a shareholder proposal, presented by the AFL-CIO Equity Index Funds, which calls for transparency in Disney’s AI practices.
If approved, the proposal would necessitate Disney to prepare a transparency report outlining the company’s use of AI in its business operations. The report would also be expected to describe the board’s oversight role regarding AI usage and share any ethical guidelines Disney adheres to in relation to this emerging technology.
Disney had attempted to exclude the proposal, arguing that its use of AI falls under normal business operations and is not subject to a shareholder vote. However, the SEC has ruled otherwise, marking a significant decision in terms of AI governance.
The AFL-CIO, a federation of unions including the WGA East, Actor’s Equity, Communications Workers of America, and the American Federation of Musicians, first proposed the measure in October. They assert that the potential dehumanization of the American workforce through AI poses a threat to the nation’s economy and the dwindling middle class.
In addition, Apple’s shareholders will also have the opportunity to vote on a similar proposal related to the use of AI, following the SEC’s ruling on the matter.
The vote at Disney is expected to garner significant attention, particularly due to the ongoing proxy battle between the company and activist investor Nelson Peltz. The increased investor interest can be attributed to the broader context in which the vote is taking place.
Normally, institutional investors drive shareholder voting at annual meetings, while retail investors tend to have lower voter turnout. However, the current situation involving the demand for AI usage disclosure is likely to motivate more retail investors to participate in the vote.
This AI-related proposal also marks a new area of focus for shareholder activism. In recent years, shareholder proposals have commonly addressed issues such as climate disclosure, racial equity, political and corporate spending, and executive compensation. The consideration of specific technologies represents a new frontier in this realm.
The growing concerns surrounding AI in the entertainment industry have been reinforced by strikes led by the Writers Guild of America and SAG-AFTRA, which highlighted the impact of AI utilization.
In conclusion, the upcoming vote at Disney signifies a significant development in shareholder governance, as it requires transparency regarding the company’s use of AI. This decision is likely to prompt further discussions and actions regarding AI usage in various industries.
The source of the article is from the blog myshopsguide.com