In addition to providing a high-level overview of insider trading policy and equity timing disclosure trends from the most recent annual reporting (Form 10-K and proxy) season based on filings through August 18, 2025, and associated practice tips, O’Melveny’s “Public Company Advisory Group – Summer 2025 Quarterly Newsletter” includes an analysis of coveted AI disclosure data among 335 large-cap (>$25 billion) companies.
Among the key takeaways:
Board AI oversight (2025 proxy statements)
- More than 1/3 of large companies disclosed board or committee oversight of AI – an increase of 100% from 2024. “Oversight of AI” refers to either the board or a board committee (i) being assigned responsibility over some aspect of AI governance or (ii) discussing an aspect of AI governance at some point during the fiscal year covered by the proxy statement.
- Approximately 40% of companies that disclosed board or committee AI oversight assigned responsibility to the full board. Approximately 30% assigned AI oversight responsibility to the Audit Committee, while other companies assigned responsibility to other committees including Cybersecurity/Technology, Finance, Risk, and Governance.
- 13% of companies included AI proficiency as a desired director qualification, double that from 2024, while 8% include AI as a director education topic, up from 4% in 2024.
- More than 26% of companies disclosed that they have at least one director with AI industry expertise, up from 18% in 2024. Companies were counted as disclosing a director with AI industry expertise if they (i) expressly identified a company in the AI industry in the director’s employment history or (ii) mentioned AI experience or expertise in the description of the director’s other qualifications for service on the company’s board.
Business section of Form 10-K
- AI business disclosures were most common for companies in the software and data processing industries (72%) and the semiconductor and computer hardware industries (44%). AI business disclosures were also common among companies in the finance industry (43%), although disclosures by these companies largely focused on AI regulations.
- Overall, 20% of companies (and 53% of companies that discussed AI in the Business section of their Form 10-K) discussed AI as a component of the company’s products and/or services.
- Companies also described AI in their discussions of material regulations affecting the company (12% of all large companies), as an end-market driver (8%), and as a factor in their competitive landscape (7%).
AI risk factors
The vast majority of companies (87%) disclosed AI risks in their Form 10-K Risk Factors section, with prevalence varying from ≥70% to more than 90% depending on the industry. O’Melveny categorized the risks disclosed into these categories:
Relevant risk factor statistics include:
- 64% of companies mentioned AI in their cybersecurity risk factors, usually with reference to the use of AI by threat actors to develop increasingly sophisticated methods of gaining access to companies’ systems.
- AI was commonly integrated into risk factors relating to companies’ ability to execute on their strategy (36%) and comply with governmental laws and regulations (35%).
- Up from 19% in 2024, nearly 30% of companies included a standalone AI risk factor that consolidates the various risks associated with the company’s use of AI into one separate risk factor.
The newsletter also notes an uptick in risk factor disclosures on tariffs and the change in presidential administration, a decline in COVID-19 risk factors, and changes in approach to DEI-related risk factors.
This post first appeared in the weekly Society Alert!