According to a recent report from The Conference Board, more than seven out of ten S&P 500 companies disclose their use of AI as a risk factor. That’s up from just 12% in 2023.  This excerpt from a CFO Dive article on the report highlights some of the specific types of risks that companies are addressing in their disclosures:

Reputational risk is the most widely disclosed issue, at 38%, according to the report. This reflects the potential impact of losing trust in a brand in the case of a service breakdown, mishandling of consumer privacy or a customer-facing tool that fails to deliver.

Cybersecurity risk is cited by 20% of firms. AI increases the attack surface, and companies are also at risk from third-party applications.

Legal and regulatory risks are also a major issue, as state and federal governments have rapidly attempted to set up security guardrails to protect the public, while providing enough support for companies to continue innovation.

We cover SEC disclosure and corporate governance risks here, but if you’re on the front lines of risk management for AI, cyber, and other emerging technologies, be sure to subscribe to our AI Counsel Blog, where we roll up our sleeves and address some of the more granular issues that legal and compliance personnel are confronting when trying to manage the risks of emerging technologies.

– John Jenkins