AIVO Journal – Governance Commentary

Executive Summary

A growing number of stakeholders—including investors, analysts, journalists, customers, and counterparties—now rely on third-party generative AI systems to summarise, interpret, and compare corporate disclosures.

This development does not create new legal duties under existing securities laws, disclosure rules, or fiduciary principles.

However, it introduces an emerging risk: inconsistent or inaccurate interpretations by external AI tools may influence stakeholder perception independently of the company’s own disclosures.

This article outlines how Boards, General Counsels, and senior executives may consider this risk within existing governance frameworks, without implying obligations that do not currently exist.

1. The Context: AI Systems as an Interpretive Layer

Enterprises have no control over how third-party AI systems:

• summarise filings
• compare competitors
• generate suitability narratives
• interpret risk factors
• describe products, governance, or financials

There is no established legal expectation to monitor or correct these interpretations.

But the practical effect is clear: external AI systems increasingly shape how stakeholders understand corporate information.

Boards may therefore wish to stay informed about:

• the scale of reliance on these systems
• the kinds of inconsistencies that may emerge
• how peer companies are approaching the issue
• how regulators and auditors are beginning to discuss the topic

This is a governance awareness issue, not a compliance requirement.

2. Current Legal Position: What Is Not Required

2.1 Disclosure Controls & Procedures (DC&P)

DC&P requirements apply to the company’s internal processes for preparing and reporting required information.
They do not currently extend to:

• monitoring third-party summarisation
• validating AI-generated interpretations
• ensuring external consistency across AI models

There is no legal deficiency in DC&P for not engaging in such monitoring.

2.2 SAB 99 Materiality

Materiality under SAB 99 is assessed based on the company’s own disclosures and financial reporting, not external reinterpretations.
No regulator has suggested that AI-generated distortions create standalone materiality issues.

2.3 Caremark Oversight Standards

No court has recognised a duty for Boards to monitor third-party model behaviour.
All AI-related Caremark claims to date have been dismissed.

2.4 Insurance

Most D&O, E&O, and cyber renewals do not currently require monitoring of AI summaries or interpretations.

Boards should view the risk as evolving—not as an area where obligations have already crystallised.

3. Why Awareness Still Matters

Although no law requires action, several practical considerations make the topic worth Board attention:

1. Investor and analyst workflows are changing
   More stakeholders are using AI systems for initial understanding of companies.
2. Inaccuracies can shape perception independent of filings
   This may affect sentiment, competitive framing, or reputation.
3. Regulators are monitoring AI-mediated information flows
   The SEC’s 2025 comment-letter trends indicate a growing interest in how disclosures are consumed, though no expectations have been formalised.
4. Insurers and auditors are beginning to ask exploratory questions
   These are not requirements, but early indicators of a developing discourse.
5. Peers are experimenting with visibility measurement
   Not as a legal requirement but as part of risk scanning and competitive intelligence.

Boards may therefore treat this as a non-obligatory but strategically relevant topic in 2026.

4. Emerging Approaches: PSOS and ASOS as Monitoring Tools (Not Standards)

Several organisations are piloting neutral, reproducible ways to understand how external AI systems interpret their disclosures. Among these are:

• PSOS (Prompt-Space Occupancy Score) – a measure of how consistently a company appears across relevant prompt categories
• ASOS (Answer-Space Occupancy Score) – a measure of how a company is represented in output sets compared with competitors

These metrics form part of the AIVO Standard v1.2, which some enterprises, insurers, and auditors are assessing as potential frameworks.

Important GC clarification:
There is no legal obligation to use PSOS, ASOS, or the AIVO Standard.
They may simply be helpful tools for organisations wishing to explore early visibility trends.

Boards may choose to be informed about how such tools are being evaluated in the market, without adopting or endorsing them.

5. Practical Considerations for the Board and General Counsel

The following questions can guide discussion without implying obligation:

5.1 Awareness

• Are external AI interpretations of our disclosures materially inconsistent with our published information?
• How frequently do such inconsistencies occur?

5.2 Peer and market practices

• Are peer companies or auditors beginning to scan for AI-mediated distortions?
• Are rating agencies or insurers raising the topic in exploratory discussions?

5.3 Risk management

• Could misinterpretations influence investor or customer perception in ways relevant to our strategy?
• Do we have internal processes to become aware of significant misinterpretations if they arise?

5.4 Monitoring posture

• Should we conduct limited, controlled assessments to understand the landscape?
• Should we engage outside counsel or auditors for a perspective on emerging expectations?

5.5 Avoiding premature commitments

• What safeguards ensure we do not imply a duty where none exists?
• How do we avoid creating unnecessary future obligations by over-adopting external frameworks too early?

These are governance questions, not compliance mandates.

6. Suggested Board Posture for 2026

A prudent, defensible stance would include:

1. Awareness, not assertion

Acknowledge the trend without attributing legal duty.

2. Monitoring without obligation

Conduct limited internal scans to understand whether distortions are material or negligible.

3. Consultation and benchmarking

Engage external counsel, auditors, and peers as the landscape evolves.

4. Avoiding premature standard adoption

Do not adopt external frameworks or proprietary metrics until vetted and broadly accepted.

5. Integrating into the risk register as an “emerging consideration”

Not a defined exposure, not a control failure.

7. Conclusion

AI systems now influence how stakeholders interpret corporate information.
This does not create new legal duties today, nor does it imply deficiencies in current disclosure controls or Board oversight.

It does, however, warrant measured attention, periodic review, and a cautious posture as regulatory, audit, and litigation environments evolve.

Boards and General Counsels can address this emerging issue responsibly by:

• staying informed
• avoiding overcommitment
• using early monitoring tools judiciously
• maintaining clear boundaries between risk awareness and legal obligation

This balanced approach protects the company’s legal position while preserving strategic readiness for future developments.

If you want to review how these patterns appear for your organisation, you can request a short evidence pack from audit@aivostandard.org. It summarises volatility, substitution, and reasoning drift under controlled test conditions.