By Mark McSherry
Apple shareholders Abrdn and Legal & General Investment Management (LGIM) are planning to challenge the tech giant’s disclosure practices regarding artificial intelligence (AI) at its annual shareholder meeting on February 28.
Abrdn and LGIM are supporting a resolution, led by the US union federation AFL-CIO, urging Apple to publish a “transparency report” on its AI usage and ethical frameworks.
The resolution reads: “AI may be used in ways that violate the privacy of customers and members of the public.
“AI may be used to generate deep fake media content that may result in the dissemination of false information in political elections.”
Apple has asked shareholders to reject the proposal. Abrdn and LGIM held discussions with Apple before backing the resolution.
The US Securities and Exchange Commission dismissed Apple’s attempt to exclude the resolution from its shareholder meeting on Wednesday.
Edinburgh-based Abrdn, which has assets under management and administration of almost £500 billion said: “Artificial Intelligence (AI) has the potential to benefit users and society, but it also poses risks.
“There is scope for the outcomes of AI to diverge from the goals and values of its providers and users.
“AI has no concept of the value of materials or ethics. Its capabilities are rooted in algorithms, data, and human programming that allow it to process information.
“Without clear guidelines and oversight its outcomes may diverge from important, qualitative objectives.
“We believe it is crucial that companies with significant exposure to AI technologies transparently disclose evidence of robust ethical guidelines, governance structures, oversight, and due diligence.
“Several companies have received shareholder resolutions on AI for their 2024 annual meetings.
“Considering the importance of this issue, we are seeking to engage with these companies and the proponent of the resolutions prior to instructing our votes.
“We are also declaring our vote intention before these meetings.
“This can help us encourage change and play a part in fostering an AI-enabled future that delivers sustainable benefits for shareholders and other stakeholders.”
Andrew Mason, Abrdn’s head of active ownership, said: “The resolution asks Apple to prepare a transparency report on its use of AI in its business operations and disclose any ethical guidelines that the company has adopted regarding its’s use of AI technology.
“We engaged with Apple and the proponent to discuss this resolution and their opposing arguments in more detail.
“In our view, the resolution affords Apple sufficient discretion to prepare a transparency report that omits proprietary information.
“The company is exposed to various risks associated with the use of AI and the requested disclosure, including ethical guidelines, could provide shareholders with robust evidence of due diligence and safeguards that can protect long-term value.”
LGIM said: “Apple is among several companies that have an outsized influence on the integration of AI into our economy.
“We believe companies like Apple should be transparent in their uses of AI and their risk management processes.
“As AI becomes increasingly embedded in our society, LGIM believes that it presents opportunities to drive long-term value and has the potential to create significant risks, stemming, for example, from data privacy and security, regulatory compliance and workforce transitions.
“Importantly, we also view societal trust in AI as a material ris.”