Search this website. You can use fund codes to locate specific funds

Hermes EOS calls on Alphabet to lead responsible A.I. practice

Ahead of Alphabet’s Annual Meeting of Stockholders on Wednesday 19 June, Dr Christine Chow, Director of Hermes EOS, Hermes Investment Management, highlights the issues she will be raising when she addresses the event, including calling on the company to strengthen Board oversight in its use of artificial intelligence (A.I.).

Dr Christine Chow explained: “The power Alphabet possesses has never been greater, and its responsibilities have never been heavier. Investors are looking to the company and its Board to display leadership in the responsible use of A.I. and the minimisation of societal risks.”

Hermes EOS, whose clients together have over $5.7 billion invested in Alphabet, strongly encourages the company to fully embrace the opportunity it has to revolutionise the responsible development and use of A.I. and set industry standards. To support this endeavour and to increase stakeholder transparency in this critical area, Hermes EOS is asking Alphabet to:

1. Establish a Societal Risk Oversight Committee of the Board
2. Improve the internal governance structure overseeing A.I. technologies to harness employee / stakeholder ethical insights
3. Regularly monitor and report on the human rights impact for content reviewers and provide sufficient support to staff and contractors

Dr Chow acknowledges the steps Alphabet’s Google has taken to improve responsible A.I. These include publishing a set of principles , a white paper , introducing machine learning fairness education , and even pre-announcing search algorithm changes for the first time .

The company is also strengthening interpretability , defined as the degree to which people can understand the cause of a decision made . However, when expert opinions and human judgement are introduced into A.I.’s non-linear systems , unconscious bias is not necessarily resolved and may even increase, without careful monitoring and oversight.

Board Oversight for Societal Risks
At the Alphabet Annual Meeting of Stockholders, Dr Christine Chow will speak in support of Stockholder Proposal 6 regarding the establishment of an independent Societal Risk Oversight Committee of the Board “to assess the potential societal consequences of the company’s products and services and should offer guidance on strategic decisions.”

Explaining the decision to support this, Dr Chow said: “We have long been concerned about public access to violent or extremist online content, which was sadly highlighted by the terrorist attack in Christchurch. The establishment of this Committee will ensure that the company’s technology and its impact on society is considered and focused on at the very top of the organisation. The publication of our Responsible A.I. and data governance white paper outlines our expectations on A.I. governance.

“In our view, there is currently a gap in the necessary skills on the Board to provide the required societal risk oversight. We ask the Board to consider director candidates with experience in statistical analysis, neuroscience and social sciences to ensure the probabilistic nature of A.I. systems is adequately explained and the social impact of technology is properly considered. To the extent sufficient expertise is not present on the Board, this Committee should consider convening an advisory Board of external stakeholders to access the necessary expertise to oversee the complex risks associated with A.I. The short-lived Advanced Technology External Advisory Council teaches us that candidate selection for the Committee should be transparent.

“In addition, we are concerned that the Audit Committee’s mandate includes the social impact of technology . We consider this Committee to be fully occupied with audit issues and believe it would therefore not have enough time for material non-audit risks.”

Ethical consciousness of employees and stakeholders can guide implementation
Active employee movements can help Alphabet to address controversial issues such as sexual harassment, gender inequality and workplace practices. Hermes EOS believes that the ethical consciousness of employees is a real asset to the company. Currently it is unclear how wide-ranging feedback is incorporated into the current internal governance structure.

We recommend a formal and inclusive feedback system from employees as well as other stakeholders from the A.I. ecosystem – covering contract developers and test users to ensure that technology deployment is subject to robust product design and impact assessment.

Human rights impact on the front line
In addition to the machine-led monitoring, Alphabet employs thousands of human moderators on the ‘front line’ who are required to review sensitive, disturbing or violent content and make content assessment decisions.

Dr Chow explains: “We call on Alphabet to give greater disclosure on the working practices and support, both psychologically and financially, that is given to staff and contractors globally, not only in the US, in these demanding roles. Whilst Alphabet is, in some ways, an exemplary employer, the human rights impact of jobs of this nature potentially, and inadvertently, exposes the company to risks. The company therefore needs to review the level of support given to staff and contractors to ensure it is sufficient.

“There are clearly many areas of concern for investors with Alphabet’s use of artificial intelligence. While we have seen the company make progress in some areas, we encourage the Board to be accountable for the responsible use of A.I. including its impact on society and establishing internal governance mechanisms. If Alphabet cannot do it, with all the resources and intellectual capital at its disposal, investors will question whether any company can.”

Latest Articles

Kunjal Gala appointed Lead Portfolio Manager
High Yield can be the White Knight of the Income Crisis
Marking the 10-year anniversary of our Global High Yield capabilities, Fraser Lundie, CFA, Head of Credit, explains why investors on the hunt for income amid the dividend drought should turn to high yield as a long-term, sustainable alternative.
There’s no such thing as a bear market without a bear market rally
The longest equity bull market in history (at least for the US) came to an end on the 19th February, just a couple of weeks short of its 11th birthday. .
UK IFAs report major rise in ESG allocations since start of Covid-19 outbreak
London, May 7th, 2020: Since the beginning of the Covid-19 outbreak, UK independent financial advisers (IFAs) have observed a sharp rise in the number of investors seeking to tackle environmental concerns and improve society through their investments.
Social factor outperformers prove resilient in equity markets
The scale of the pandemic and the response elicited has shone the light firmly on the ‘S’ of Environmental, Social & Governance (ESG) factors, but all three issues have come to the fore as the crisis has developed.
Solving the plastic pollution problem
Aaron Hay, Lead Engager – Fixed Income and Lisa Lange, Engagement Professional for EOS, at the International Business of Federated Hermes, look at the key risks and opportunities for investors in global plastics in their latest paper, ‘Investor Expectations for Global Plastics Challenges’.

Press Contacts

Johnny Weir, Interim Head of Communications
Rachael Dowers, Manager - Corporate Communications
Hannah Bellfield, Assistant Manager - Corporate Communications
Harriet Hall, Associate - Corporate Communications