Should your board ban AI transcription of its meetings?
A board that bans the tool still gets a transcript, unless it takes precautions.
The Situation
In August, Delaware's Court of Chancery ruled that Empery Digital's board breached its fiduciary duties when it rejected an activist investor's director nominations. The court had two records of the same meetings where the board deliberated the issue: the official minutes and the AI-generated transcripts. The minutes said a stockholder rights plan would protect investors, but the transcript recorded Empery's Co-CEO, who also sat on the board, saying the plan was "necessary in order for the board to remain in its position." The court read the two side by side, and the transcript supplied the motive the minutes left out. On October 8, the Delaware Supreme Court affirmed that the board acted improperly in rejecting the activist firm's nominations.
The Exposure
After this kind of result, directors may conclude it's best to ban AI in the boardroom. But even a ban needs enterprise-grade tools and support behind it, or directors will bring their own AI tools to the meeting. In a June survey of public company directors by Corporate Board Member and Diligent Institute, 54% said their company has no guidance on directors' use of AI, and 49% had heard of board members using publicly available or consumer-facing AI tools for board work. A personal notetaker's transcript sits outside your company’s retention schedule and litigation holds, so is still discoverable. And within the company, transcripts from the meetings most likely to be litigated over are the transcripts least likely to be deleted, since the moment an activist submits a notice can reasonably be expected to trigger a litigation hold.
The Judgment Call
Most general counsel currently advise switching transcription off entirely for board meetings, or at least for anything sensitive such as activist shareholder activity, M&A deliberations, and topics where legal advice is being provided by counsel under privilege. Given the uncertain reliability of generative AI outputs, emerging case law, the technical complexity of managing the infrastructure appropriately, and the current level of AI training directors have, the best course of action for now is to hold off on AI transcription in board meetings. If your board decides to go ahead anyway, either because it wants a detailed long-term record or expects significant efficiency gains despite the support and oversight requirements, it has to be done programmatically - not ad hoc. A written policy needs to exist beforehand and be followed meticulously. It should specify the situations where recording will and won’t be used, name the single company-provided tool that’s managed by the CIO and corporate security, and prohibit personal notetakers and LLMs. It should also set out the deadlines for draft minute distribution, and when the transcription will be deleted. Best to avoid it entirely for now, but use it deliberately if you decide to proceed anyway.
Risk: Minutes drafted from the secretary's notes alone can come out thinner than minutes checked against a transcript, and if a board's formal records don't document a decision sufficiently, Delaware courts have ordered email production, which is potentially worse than even a board transcript.
Benefit: The minutes your board approves stay the only record of what was said, with no transcript to contradict them and no deletion schedule to defend.
This Week’s Action
What to do: Ask the corporate secretary to list, in writing, every AI tool directors used for board work in the past 12 months, including personal notetakers and consumer LLMs, then draft a one-page board position on AI transcription.
Who to involve: Your corporate secretary, general counsel and CIO, with the nominating and governance committee chair as the decision owner. If your CISO hasn't checked whether directors bring personal AI tools into board meetings, Question 1 of the Artifact is the place to start.
What outcome to achieve: A minuted committee decision, with its basis, on how AI services won’t or will be used.
Time required: 30 minutes for the inventory, 45 minutes for the GC and CIO review and 30 minutes of committee time. Total: 105 minutes.
Artifact
If your board wishes to transcribe meetings, then review these conditions first:
Director tools
Do directors use only company-provided AI tools for board work, managed by the CIO and corporate security?
→ YES: Continue to Question 2.
→ NO: Stop. Fix this first, even if transcription stays banned.Board decision
Has the board decided in writing, with its basis minuted, whether transcription is allowed?
→ YES: Continue to Question 3.
→ NO, or the decision is to prohibit it: Stop. Don't transcribe.Sessions coverage
Does the policy define the session content that will never be recorded?
→ YES: Continue to Question 4.
→ NO: Stop. This has to be settled before anyone presses record.Deadlines and deletion
Are dates set for the secretary's draft minutes distribution and transcription deletion, either at approval of the minutes or once the draft goes to directors?
→ YES: Continue to Question 5.
→ NO: Stop. A deletion rule applied inconsistently is worse than none.Counsel review
Has counsel confirmed whether separate regulatory requirements such as SEC or other recordkeeping rules apply, and whether directors abroad or offshore data storage raise data sovereignty issues?
→ YES: Continue to Question 6.
→ NO: Stop until counsel has reviewed and provided an opinion.Director training
Do directors know which sessions are recorded, know to verbally label hypotheticals during meetings, and understand the ATG case?
→ YES: Proceed.
→ NO: Training is required before the next meeting.
Any stop means the meeting isn't ready to be transcribed. Question 1 applies even under a ban.
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Chris Cook writes Judgment Call weekly for compliance and risk officers navigating AI governance.
Former IBM Vice President and Deputy Chief Auditor. Published in the AI Journal, speaker at Yale.
Chris Cook
Managing Partner & Founder
Blackbox Zero
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