AI companies are racing toward trillion-dollar public stock offerings, and their executives warn that the technology is advancing faster than our capacity to oversee it. Had these companies raised money from the public at any point over the past 80 years, federal law would have required them to give shareholders a forum for debating urgent issues like these.
Today, the Securities and Exchange Commission has proposed repealing Rule 14a-8, which requires public companies to put qualifying shareholder proposals up for a vote. The SEC argues this is a matter for state law. The directors and executives who run America's AI companies face unprecedented opportunities and risks, including how fast to deploy new models, who should have access to them, and how to weigh the costs of development delays as China rushes ahead. Industry leaders know they need a range of voices to get these hard calls right.
The writer, general counsel of the California Public Employees' Retirement System and a former chief of staff of the SEC, argues that these rules reflect the basic bargain between investors and companies: raising public money in America requires giving investors a say, even when management disagrees. While the rule has grown controversial, with companies claiming advocates use it to advance private agendas, the SEC itself acknowledged in earlier amendments that shareholder voices deserve weight alongside efficient decision-making.
The writer notes that CalPERS, which invests more than $650bn and votes on thousands of shareholder proposals each year, does not support every proposal. The solution to a bad proposal is to vote against it, not to make it effectively impossible for investors to raise issues at all. That need for open debate is especially acute for AI companies seeking public money to develop technology that could shape the future for all of humanity.
Source: Financial Times Companies · Summarized by HeadlinesBriefing