Nelson Mullins partners Jeff Kelly and Scott Sherman authored an article for Corporate Counsel, "AI Moves Faster Than Governance: A Field Guide for Early Rulings and Emerging Risks,” breaking down practical controls for company boards and legal departments as laws around AI in governance develop.

“Most businesses take privilege and confidentiality for granted,” they said. “Courts are now testing how those protections apply to AI, and four trial-court rulings show the answers turn on facts companies may not be tracking.”

They discussed AI-specific SEC and court rulings for companies to note. Although the cases do not offer corporate protection from liability, they emphasize the need to protect confidential information from being uploaded into AI systems.

“Boards need not approve every use or master every model. They must know where AI can affect rights, money, reputation, or reporting – and who is accountable,” they explained. “A workable program lets the company reconstruct a consequential use: who chose the tool, what went in, what came out, who relied on it, and what record remains.”

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