AI campaign: the responsible use of AI in reporting
Here you can find out all about Claire’s campaign for the responsible use of AI in reporting, and download the guidance for Boards and management on approach and disclosure.
“Truth and accountability are the bedrock of corporate reporting. Early in 2023, when ChatGPT started to gain traction, I realised that the wholesale use of AI, particularly large language model systems (LLMs) would raise issues for the accuracy of corporate reporting in general; and for directors’ duties in terms of ensuring that reporting is fair, balanced and understandable.
“So I started my campaign, first for regulation including submitting a proposal to the Government consultation. Then, with the input of 40+ corporates, advisors and investors (to whom enormous thanks!), I turned that into guidance, published on 22 November. I’m keen to keep it live and useful, to reflect the status of AI usage within companies, so I’d be delighted to hear your thoughts. Please get in touch: claire@falconwindsor.com!”
Launch webinar
Claire discusses the guidance with Fiona Cuttell, Assistant Company Secretary and Head of Non-Financial Reporting at FTSE 100 Haleon; Neil Murphy, CEO of FTSE 250 Bytes Technology Group, which sells AI systems to corporates and the public sector; and Charlotte Lush of ShareAction, representing the investor view.
FT’s The Banker covers our campaign – again!
16 April 2024
In February we reported that Silvia Pavoni, editor of the FT’s international financial affairs publication The Banker, had highlighted our campaign and research in a piece entitled The risks of ‘hallucinating’ financial reports. We’re delighted to note that we’ve made the news again, in Silvia’s latest editorial Banking, journalism and reasoning AI. Focusing on the idea that ‘reasoning AI’ poses an existential threat to banking professionals and analysts – an idea Claire explores in the context of corporate reporting – Silvia also mentions that EFRAG, the European Financial Reporting Advisory Group, invited Claire to discuss AI and its responsible use in reporting with their staff. For a campaign that’s just beginning to gain traction in the sector, recognition and support from such an august source is gold dust, and very much appreciated.
FT’s The Banker covers our campaign
06 February 2024
A ringing endorsement this week from The Banker, the FT’s international financial affairs publication. In an editorial titled The risks of ‘hallucinating’ financial reports, editor Silvia Pavoni mentions KPMG’s research in the US on the use of AI – then goes on to say: ‘In the UK, a far smaller consultancy than KPMG has been sounding the alarm bell. Claire Bodanis, the founder of Falcon Windsor, a minute company offering corporate reporting services, has been knocking at the door of the body regulating auditors and accountants — the Financial Reporting Council — asking for intervention.’ She also refers to our academic research with Imperial College and Insig AI (see below).
We’ll happily take ‘minute’. As Insig AI’s ESG Research Director Diana Rose put it: ‘Minute but mighty’!
2024: new AI/reporting research with Imperial College London and Insig AI
Claire says: “I’m delighted that my research project into how companies are (or aren't!) using AI in reporting this coming year is no longer MY project but OUR project – our being a team of research students from Imperial College London, along with Insig AI's Diana Rose (pictured, plus course leaders).
The research will build on my guidance and, as well as looking into AI usage, we’ll also aim to raise awareness and promote the responsible use of AI in a way that supports reporting's ultimate purpose: to build a relationship of trust with investors and other stakeholders through truthful, accurate, clear reporting that people believe because it tells an honest, engaging story.
Part of that includes disclosing how AI is (or isn't) used, something we know investors are keen on; and I'm thrilled that Diana is going to help us there with their amazing software, running search queries on their database of corporate publications to analyse emerging trends in disclosure. Now there’s a good use of AI… We're focusing on UK companies to start with, but I'll keep you posted.”
As of April 2024, the ICL team has completed the initial research plan; we’re now finessing it and confirming the research team who’ll carry out the plan over the next few months. We expect to have initial results in June/July 2024.
The campaign in blogs
Useful sources
There’s so much information about AI it can be difficult to know where to start. As with everything, the source matters. Personally I’ve found the FT, New Scientist, Scientific American and the New York Times to be useful and relatively unbiased (these need to be paid for). I’ll update this list as and when I find useful info.
UK regulatory context
The Government’s consultation paper, A pro-innovation approach to regulating AI (March 2023)
The Government’s policy paper, Pro-innovation Regulation of Technologies Review: Digital Technologies (March 2023)
Free (and relatively trustworthy) sources about AI in general
UK public broadcaster the BBC, has a special section on AI news (mostly UK-focused)
UK newspaper, The Guardian, has published a number of useful articles:
Everything you wanted to know about AI but were afraid to ask (useful descriptions)
A day in the life of AI (where AI is being used already in many daily applications)
On the campaign trail
13 June 2024
Going head to head with Microsoft on a panel at the Center for Corporate Reporting’s annual conference
24 April 2024
Panellist at the Chartered Governance Institute UK & Ireland’s event – AI: What Corporate Governance Professionals and Boards need to know
12 April 2024
FT’s The Banker talks to Claire about the potential impact of ‘reasoning AI’, announced earlier in the week by OpenAI and Meta – Banking, journalism and reasoning AI
10 April 2024
Presentation to the European Financial Reporting Advisory Group, or EFRAG, key advisor to the European Commission on corporate reporting
8 April 2024
Presentation to the Institute of Directors’ quarterly update meeting for Chartered Directors
05 March 2024
Presentation to the UK branch of the Corporate Reporting Users’ Forum on the responsible use of AI in reporting
06 February 2024
FT’s The Banker covers our campaign - The risks of ‘hallucinating’ financial reports
24 November 2023
Presentation to The-Pensions-Net-Work
23 November 2023
Headlined in the Sustainable Views at Financial Times daily briefing - 'Should ChatGPT do your ESG reporting?'
23 November 2023
Zoom chat with students at the University of Oulu
25 September 2023
Panellist for The-Women’s-Insurance-Net-Work
10 July 2023
Panellist for the Institute and Faculty of Actuaries
FW writer Tamara O’Brien digests the issues from Claire’s recent webinar on the uses and abuses of AI in sustainability reporting. Corey Walrod, from the ISSB’s technical staff, gave the inside track on the new IFRS sustainability standards; Diana Rose, ESG Research Director at Insig AI, explained the pros and cons of common types of AI and how corporate reporters should approach them; while Adrian Clark of Royal Bank of Canada explored the uses and limitations of AI in making judgement calls about potential investments.