This decision challenges the companies’ previous attempts to limit dialogue on AI-related topics, highlighting the increasing importance and ethical implications of AI in business operations.
Apple and Disney, along with other major corporations, routinely prepare for their mandatory annual shareholder meetings by proposing agendas and seeking the SEC’s approval to exclude certain topics. In the past, the SEC has allowed Apple to avoid discussions on various subjects, such as employee non-disclosure agreements. However, this time, the agency has taken a different stance regarding AI.
The American labor union federation, AFL-CIO, played a significant role in bringing AI into the spotlight for these meetings. The federation, through its pension fund staff, requested both Apple and Disney to provide reports on the use of AI in their business operations and to disclose any ethical guidelines concerning AI technology. AFL-CIO specifically highlighted concerns about AI systems being trained on copyrighted works and the personal attributes of professional performers without proper transparency, consent, and compensation.
Brandon Rees, the deputy director of the AFL-CIO’s office of investment, expressed concerns to Reuters, stating that Apple and Disney “haven’t even begun to grapple with these ethical issues”. This statement underscores the urgency and significance of addressing AI ethics in the corporate world.
In response to these requests, Apple and Disney sought the SEC’s permission to exclude the AI proposal from their shareholder voting ballots, arguing that it pertained to “ordinary business operations”. However, the SEC has denied their requests, stating that the proposal “transcends ordinary business matters and does not seek to micromanage the Company.” This decision indicates a growing recognition of AI’s transformative impact on businesses and society at large.
Corporations frequently ask the SEC to allow them to skip shareholder proposals, and historically, the agency has granted about half of these requests.
The denial in this case suggests a shift in the SEC’s approach to AI and its role in corporate governance.
The exact date for Apple’s 2024 shareholder meeting is yet to be announced, but it is typically held in March.
This meeting is now expected to include discussions on AI, marking a significant moment for corporate accountability and the ethical use of technology.