Bank of Montreal | Oversightof Artificial Intelligence to Preserve the Human Dimension at Bank of Montreal

Status
Filed
AGM date
Previous AGM date
Proposal number
6
Resolution details
Company ticker
BMO:CN
Lead filer
Mouvement d'éducation et de défense des actionnaires (MÉDAC)
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Digital rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
Canada
Resolved clause
Be it proposed that the Bank produce a report on the use of artificial intelligence (AI) as it relates to decision-making within senior management, risk assessment, and credit underwriting.
Supporting statement
Artificial intelligence is rapidly transforming the financial sector, particularly in risk analysis, credit automation, fraud detection, and product recommendations. This shift, however, brings new risks that have been widely identified in research and in international policy frameworks. The International Monetary Fund (IMF), in a report published in August 2023 (Generative AI in Financial Services: Risks and Policy Considerations), warned against: “algorithmic biases, privacy breaches, threats to financial stability, and governance risks resulting from the unregulated use of AI.” This is a translation; I could not find the actual quote in the article. Similarly, several renowned experts, including Yoshua Bengio, Turing Award laureate and a leading figure in AI research, have publicly voiced growing concern over the lack of effective safeguards. In a Les Affaires interview (May 2023), Bengio stated: “(Translation) The urgency to act is real. Powerful AI systems are already capable of manipulation or deception.” These warnings have led to the adoption or study of regulatory frameworks in several countries. Federally, Bill C‑274 — the Digital Charter Implementation Act — currently before the Senate, proposes the creation of a specific legal framework for high‑impact AI, imposing new obligations on companies using AI, including banks. In this evolving regulatory and technological context, it is in the Bank’s interest to: • Demonstrate responsibility and transparency; • Prevent legal, reputational, and systemic risks; • Position itself as a prudent and ethical leader in AI adoption. The proactive publication of a structured report on the use of AI would enable shareholders to exercise informed oversight and allow the Bank to strengthen governance practices worthy of public and regulatory trust. This report should address measures taken by the Bank to: • Promote transparency regarding how, why, and when artificial intelligence is used; • Evaluate the outcomes of AI systems, including generative tools, to minimize bias and inaccuracies and to allow users to distinguish AI outputs from human judgment; • Train permanent or contractual employees who develop or use AI so that they understand legal, ethical, and operational issues, including privacy, security, and bias, and can adopt AI systems responsibly. This proposal received support from 8.46% of votes at the last Annual General Meeting. 3 https://www.imf.org/en/Publications/fintech-notes/Issues/2023/08/18/Generative-Artificial-Intelligence-in-Finance-Risk-Considerations-537570 4 https://www.parl.ca/LegisInfo/fr/projet-de-loi/44-1/C-27

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