AI Task Force Member: Company Boards Have Fiduciary Duty to Respond to Concerns from Outside Auditors

On Monday’s broadcast of the Fox Business Network’s “Varney & Co.,” AI Task Force member Scott Kupor said that if the outside auditors that companies agreed to find an issue, the company’s board would “have a fiduciary duty, and potentially even personal liability if you don’t respond to those security concerns.”

Host Stuart Varney asked, “Well, right now, as I understand it, AI companies are morally bound to self-report. Is that enough?”

Kupor answered, “Well, actually, Stuart, if I could, it’s not just a moral commitment. The president, of course, did say that, but it’s even stronger than that. … The issue is, when you have an outside auditor, which is what the accord is that those companies signed, and that outside auditor is effectively reviewing your security policies, as a public company, that auditor reports to the board. And if you are the board and you receive an issue, just like in a financial audit, you have a fiduciary duty, and potentially even personal liability if you don’t respond to those security concerns. … And so, it actually has real legal teeth.”

Kupor added that there are other forms of liability that would apply and many things that the FTC and DOJ can do under existing law.

Follow Ian Hanchett on Twitter @IanHanchett