Why You Need an AI Policy

Why companies need an AI policy

And what the growth of AI tools mean for your organization

A recent survey from McKinsey reported on the state of AI today. At least 79 percent of respondents had some exposure to generative AI, and a further 22 percent used it regularly at work. 

That accelerated exposure is significant when you remember the catalyst for the current surge in popularity—ChatGPT’s public launch—only occurred in November 2022. Over 2023, AI generated content became a core business and media focus. AI use has only continued to grow in 2024 and will do so beyond. What does that mean for organizations that want to understand the AI landscape and manage the use of AI at work? 

There are many parts to establishing AI guidelines. If you’re ready for a detailed look at establishing guidelines for an AI policy, get our free e-book, “The Beginner’s Guide to Drafting an AI Policy,” for more tips.

Artificial intelligence—what you don’t know can hurt you

You might think, “We don’t use AI at my company. Why do we need a policy?” 

Yes! You need an organizational AI policy, whether your company plans to use AI or not. 

The purpose of an AI policy is to ensure compliance with consistent and approved behavior in AI tools by all employees. 

Whether you know it or not, employees are already using AI technologies or may try AI soon. Recent Gallup research reveals the risk. It found that 44 percent of leaders have no idea if their teams leverage AI. Furthermore, a Microsoft report found that 52 percent of employees don’t want their bosses to know they’re using DIY AI, or AI sourced by the employee, without appropriate enterprise-level protections. 

A clear AI usage policy ensures everyone understands the rules and the specific context in which they can use artificial intelligence. A corporate AI policy eases the decision-making burden, so there are no “act now, ask for forgiveness later” scenarios. Even if your company doesn’t currently use AI platforms, it’s critical to educate employees and have a policy that outlines the safe, private, and secure use of AI. 

This is true when you don’t have organizational plans to use AI, but even more true when you plan to implement AI technology at work. A set of guidelines ensures that the organization moves in a unified direction without big missteps. Burying heads in the sand presents too many risks. 

6 steps to creating an AI policy

Crafting a thorough AI policy will take some time, and there’s no time like now to get started. Here are four steps to get started with your corporate AI policy.

1. Clarify purpose and goals

First, gather stakeholders to establish the purpose and goals of the policy. You want safe and effective systems—how will you achieve that goal? As stated above, the primary goal of an AI policy is to ensure consistent and approved behavior among all partners impacted by the policy. Think through, generally, why you need a policy. For example, the policy would help all those affected understand approved tools and permitted use cases. Consider language regarding expectations for ethical and responsible practices. 

2. Explain scope and communication

Next, consider the AI policy’s scope:

• Who does the policy cover? Consider employees, vendors, contractors, temporary workers, and consultants. 
• How will a remote, hybrid, or in-office working model impact the AI policy? 
• Should you consider local regulatory impact? What about international laws? For example, where customers or employees live and work could impact the policy.
• What kind of AI tools might the company need, and what are the use cases and impacted teams for those AI tools? 

Finally, given the above factors, how will you communicate and update the policy? These questions are integral to laying out comprehensive guidelines. 

3. Create specific AI use guidelines

Guidelines are particular to an organization. You may want to address data privacy, fairness and bias mitigation, transparency, and quality assurance practices. If applicable, detail the specialized use of AI by department. 

4. Address management and governance

You’ll need to determine who manages the policy, processes and communicates changes, and enforces misuse. Clearly outline these details in the final policy. You might also identify a cross-functional team, such as HR, IT, or legal, to ensure your AI use aligns with company values and regulations. From there, define the escalation procedures for violations and decide how incidents will be tracked and resolved. 

5. Build a review and feedback process

AI is constantly evolving, so your policy should be flexible enough to evolve with it. Start by creating a regular review cycle that assesses whether the policy remains relevant. Your feedback loop should include opportunities for employees to share questions or concerns, as well as any insights they’ve gained by using AI regularly in their process.

6. Provide training and ongoing education

A great policy won’t do any good unless employees are both aware of it and understand it fully. This is an opportunity to deliver training that doesn’t just inform them about policy but thoroughly explains why it matters. This training might include real-world scenarios, best practices for specific use cases, and updates on regulations and evolving technologies. Remember that the goal is to empower your team to use AI thoughtfully and responsibly.  

3 major risks of not having a corporate AI policy

1. AI can be biased or incorrect

The word “intelligence” is a misnomer. AI is only data and algorithms, not intelligence. It doesn’t know right from wrong. 

Generative AI like ChatGPT or Bard is trained on broad, publicly available sources like the internet. It then generates the most probable response to user questions or “prompts.” It is not a fact-finder; it’s making its best guess. That means AI can and does offer false, partially incorrect, or correct information. It’s up to users to verify the output. Additionally, it can regurgitate offensive stereotypes. Safe, ethical AI means checking content for inaccuracy, bias, and harm. 

Even a privately owned enterprise AI can make mistakes. A bad batch of data or a programming error can produce huge problems. An AI policy will include checks and balances to catch issues and minimize damage. 

2. Security or data breach

Employees may not understand the data risks involved in using AI. For example, feeding private customer information into publicly available tools means that data becomes public. Clear rules help protect data privacy and make sure sensitive or private information doesn’t become AI output. Safeguard against leaks and risks with a clear policy about what tools are available and acceptable uses of those tools at work. This clarity could save the company embarrassment, protect data integrity and privacy, and reduce exposure to legal action.

3. Compliance and legal risk

AI has developed so fast that it resembles Ray Bradbury’s famous quote: ”…jump off a cliff and build your wings on the way down.” Regulation and legal implications questions continue to lag behind development and adoption. 

For example, intellectual property (IP) gets murky when AI is involved, creating copyright infringement or IP ownership risk. A faulty data set may lead to poor outcomes that leave the organization open to legal issues. Complying with applicable laws and regulations about data and privacy as they emerge, like those recently passed in the EU, is much easier with a clear AI policy. 

These are only a few of the key risks at stake that a corporate AI policy can begin to mitigate. 

Build and establish an AI policy now for success in the future

Even if you’re not sure employees use AI now or will use it in the future, an AI policy sets the organization up for success. A policy makes goals, expectations, and behaviors clear for the company and all parties related to it. Forgoing a policy magnifies potential risks of inaccuracy, security breaches, and legal action. 

To learn more about the questions you should ask when writing an AI policy, check out our e-book, “The Beginner’s Guide to Drafting an AI Policy.”