Building a Corporate AI Governance Policy

By: Anastasia Kim | November 13, 2024

Here are ways to govern your use of AI so it aligns with corporate goals and minimizes risk

Key Takeaways: A corporate governance policy helps address the challenges of generative AI Key governance policies include transparency, accountability, and fairness The risk of unauthorized AI use needs to be managed

Artificial intelligence (AI), especially generative AI, can offer users a host of new capabilities. However, it can also pose challenges, ranging from misuse and biased outcomes to finding a way to align it with your organization's goals.

This is where a sound AI governance policy comes in, providing a framework to direct, monitor, and control your company's use of technology. Since technology is constantly evolving, your organization's AI framework must, too. A governance policy needs to be a dynamic document that responds to the changing landscape.

If we are to unlock the promise of generative AI safely and effectively, we need to build an AI governance policy that covers everything from defining responsible use of the technology to stopping "shadow" AI usage to implementing training initiatives.

Understanding Generative AI Challenges

While many organizations are considering incorporating generative AI into their operations, a substantial number are hesitant to do so because of the risks and challenges it poses.

These include:

  • Security threats
  • Misinformation
  • Biased outputs
  • Privacy concerns
  • Copyright or IP infringement

The Harvard Business Review categorizes AI challenges into four categories:

  • Misuse — unethical or illegal exploitation of the technology
  • Misapplication — improper use of AI tools
  • Misrepresentation — AI outputs distributed despite authenticity concerns
  • Misadventure — when inauthentic content is consumed and shared by users

Each of these categories holds their own complexities and must be understood to manage AI effectively.

Establishing Governance Principles

Building a responsible corporate AI governance policy is critical in keeping an organization and its customers/clients safe. So, the governance principles should include:

  • Transparency — being transparent and open about how the technology operates and how it is being used
  • Accountability — taking responsibility for the impacts of a company’s AI use
  • Empathy — addressing the societal implications of AI
  • Bias control — evaluating training data so real-world biases aren’t inserted

Implementing User-Centric Policies

An AI governance framework should include policies that conform to user needs while staying true to important AI governing principles. This is where transparency comes in. Users need to know what AI does at every turn, especially when it affects their jobs or input.

AI tools that are simple to work with and are perhaps personalized also help to make them more appealing to users. AI can be a daunting technology, so it is important that businesses put their people at the center of their policymaking.

Preventing “Shadow AI” Formation

“Shadow AI” is a term that describes “unsanctioned or ad-hoc generative AI use within an organization that’s outside IT governance.” If AI tools are widely available in a company, then there’s a danger they may used by employees for personal and even illegal reasons that don’t conform to governance policies.

Battling the risk can involve implementing strong controls (including, for example, who has access to the technology and who doesn't) and monitoring systems. Staff should be made aware of the company's policies on AI usage.

Training and Education Initiatives

One way to ensure responsible AI use is to educate users about governance policies. This can help safeguard against misuse, which might compromise private data and security. So, it is important to develop your own AI safety training programs or use a proven third-party solution.

Staff should be educated to have a deeper understanding of AI tools so they can use them more effectively and ethically. Part of this is an ongoing awareness of the technology's evolving capabilities and legal implications.

Continuous Monitoring and Evaluation

To fully take advantage of AI's potential, organizations must regularly revisit their corporate AI governance policies, making updates and adjustments as needed. Since the pace of innovation is brisk, it's becoming increasingly popular to adopt a dynamic governance model. This involves keeping abreast with changes in the field to minimize risks and enable companies to fully take advantage of opportunities.

The dynamic approach differs from traditional governance models' top-down hierarchical approaches and centralized decision-making. Dynamic governance is more agile and responsive, with setup dictated by AI objectives. A dynamic model includes continuous improvements, feedback loops with stakeholders, and regular updates that reflect changes in the technology and best practices.

Collaboration with Stakeholders

An important part of developing a successful AI governance framework is ensuring open and transparent collaboration with all stakeholders. These can include company staff, customers, investors, and community members.

The governance policies should cover how communication is conducted for stakeholder engagement, letting them know how the technology is used, including the expected benefits and drawbacks.

Getting stakeholder feedback so the process is truly collaborative is essential. You need to communicate with the stakeholders, so they are aware of changes in the technology and have time to provide suggestions that will shape the company's approach to AI overall.

Expert Help to Deal with the Challenges of Generative AI

Establishing a corporate AI governance framework is critical for managing the risks associated with generative AI while harnessing its many benefits. By defending the governance principles, implementing user-centric policies, stopping "shadow AI," investing in training, and getting feedback from stakeholders, you can ensure that the technology yields responsible and ethical outcomes and delivers a strong ROI (return on investment).

Core BTS is committed to developing AI strategies for customers that align with their business goals. While the technology is robust, we always strive to put people at the center of our solutions.

Our strategies are tailored to each organization's needs, empowering employees, streamlining operations, enhancing decision-making, setting up strong security, and implementing exceptional customer experiences.

Contact one of our experts to find out how the latest technologies can transform who you are and how you operate.

Anastasia is a relationship builder who leverages a passion for serving others to help people and organizations improve their delivery of services and transform the lives of those whom they serve. A Prosci-certified change management professional, she is skilled at helping end users positively embrace technical change.

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