EY’s new report: “Five ways boards can respond to investor expectations on AI” draws on recent conversations with stewardship leaders from institutional investors representing $55 trillion in assets under management to highlight areas where boards and management can better address investors’ growing interest in how companies govern and deploy AI.
The report identifies these five key areas where boards and management can address the information gap:
- Show how the board oversees AI and builds its acumen — Consider whether proxy statements, committee charters, or other disclosures could provide greater insight into the board’s oversight of AI, including committee responsibilities, management reporting, and director education.
- Clarify directors’ technology skills — Investors are looking for more specificity in board skills matrices and director biographies about technology expertise and experience.
- Oversee management’s approach to the AI talent pipeline — More than half of investors raised concerns about potential AI-driven “brain drain.” Boards should examine how management is balancing cost efficiencies with long-term workforce development and reputational considerations.
- Monitor AI investment progress and returns — Encourage clearer communication with investors about AI investments, how progress is measured, and how these investments support long-term strategy and competitiveness.
- Prepare for AI-enabled investor stewardship — As investors increasingly use AI tools in due diligence and analysis, companies should strive for disclosures that are comprehensive and machine-readable.