Ignoring AI is risky, especially now! Shareholders are already filing lawsuits over missed opportunities and messy data. The Delaware 2023 ruling now holds executives and officers personally responsible. AI is changing leadership accountability and fiduciary duty faster than we can keep up. Here’s how to prepare.
In Part 1 and Part 2 of this series, Mark Stouse, CEO of Proof Analytics, and I explored why AI accountability and fiduciary duty now sits with the entire leadership team—and how the Delaware 2023 ruling changed the rules for C-suite liability.
This third part recaps what’s happening right now.
For example, shareholders are paying attention and lawsuits have already begun by using AI to investigate leadership oversight in real time. Executives who don’t act could face serious personal consequences.
REWATCH the entire series on LinkedIn:
Before 2023, corporate officers were rarely sued unless they acted with clear intent to do harm. That’s no longer the case.
A Delaware court ruled that officers can now be held liable for poor decisions, even without bad intent. In other words, saying, “I had no idea,” won’t hold up in court.
This came from a case involving McDonald’s and their CHRO. Being careless or uninformed is enough to bring legal trouble.
“The vulnerabilities to the company just went up exponentially... the bar for proving breach of fiduciary duty was dropped to the floor from a very high place.”
Mark Stouse
Mark spoke to about 350 CFOs and many agreed this ruling is a bigger deal than Sarbanes-Oxley. AI now makes it easier to spot crappy data and call out risky decisions.
Unlike McDonald’s, a lot of lawsuits are currently being settled quietly, not just to avoid financial loss, but to prevent reputational damage.
That risk is now front and center. Executives aren’t just trying to protect the company. They’re trying to protect their names.
As mentioned, one of the first things shareholders are targeting is data quality. If your CRM or marketing automation data is flawed, your entire revenue engine is vulnerable. That’s low-hanging fruit for litigation, and it’s already happening.
And if you’ve had conversations with vendors and walked away without action? That trail exists. AI note-takers, emails, even meeting transcripts, can be used to show that you were aware—and failed to act.
This is where legal exposure gets personal.
Marketing teams are seeing this shift with buyer bots. These bots now control much of the personalization. That flips the value of seller-side personalization on its head.
“Personalization from the seller side no longer is needed... It’s really kind of going to be negated one way or the other.”
Mark Stouse
Teams need tools that reveal what’s actually working. Causal AI tools like Proof Analytics helps big time. Sticking with old habits will get you into trouble.
While the legal risk is fairly obvious, the bigger and less evident threat might be your career.
“You can insure against financial liability, but you can’t insure your reputation.”
Mark Stouse
Boards are less forgiving. Shareholders are quicker to act. Leaders who don’t move forward risk tarnishing their reputation indefinitely.
Just look at the CHRO in the McDonald’s case. That individual may never work in HR ever again.
There is a school of thought that says AI could potentially replace the C-suite as we know it today. And it isn’t just theory anymore.
“Over time, the biggest career losers from all this will be the C-suite... At some point, you don’t need a 14-million-dollar annual salary for a CEO.”
Mark Stouse
AI decision-making capabilities keep getting better and better. If AI starts making smarter calls than the leadership team, why keep the old structure?
The writing may already be on the wall.
If you lead a company (or plan to) here’s what matters right now:
AI can help you protect and defend, but it can also quickly help you find a way to lead better, faster, and with more clarity.
You can use it to plan smarter GTM strategies, adapt in real time, and stay ahead of shareholder expectations.
One last thing: Mark shared an analogy that’s quite apropo.
Imagine standing on one side of a fast-moving river, and you need to get to the other side. You can swim or stay where you are.
“The difference between humans and every other species is that when the river changes course, we can swim. But many executives are standing still, waiting to be swept away.”
Mark Stouse
The river’s already moving. The ones who swim now might just make it to the other side.
REWATCH all 3 parts of this series on LinkedIn:
If you haven’t seen them, now’s a good time. What you don’t know can still cost you.
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Cheers!
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