Why Your Company Urgently Needs An AI Policy: Protect And Propel Your Business

The AI revolution is well underway, and I believe just about any business or organization can benefit by automating routine tasks, augmenting decision-making and optimizing operations and processes.

However, AI can also harm a business if it isn’t used cautiously. So, it’s very surprising to me that many companies and organizations don’t have any form of official AI policy in place.

Among the most serious risks are breaching privacy and confidentiality, exposing sensitive data, and inadvertently infringing copyright.

Creating such a policy should be at the top of just about every organization’s to-do list, regardless of size or industry. So, in this article, I’ll explore the risks that companies are exposing themselves to by allowing unregulated AI use, as well as the benefits of a well-thought-out policy when it comes to navigating the complex and sometimes dangerous waters of business AI.

Why Is Using AI Dangerous?

Long gone are the days when only large companies like Google or Microsoft were using AI. On a daily basis, millions of businesses are leveraging technology such as chatbots for customer support, generative content creation and audience analytics in marketing, screening job applicants in HR, detecting fraudulent transactions, optimizing supply chain operations or extracting business intelligence insights from their data.

Unfortunately, in my experience, many of them are unaware of the risks they’re leaving themselves open to.

Data privacy and security concerns are perhaps the most obvious, but still overlooked on a surprisingly frequent basis. Employees using tools like ChatGPT to create summaries or respond to emails are often unaware that they’re potentially exposing confidential information to the world.

Even if they are, some simply assume it isn’t a problem due to the fact they haven’t been told not to do it!

Several companies have already fallen foul of risks associated with a lack of regulation around AI.

For example, in 2023, Samsung banned the use of ChatGPT after finding that staff had entered sensitive data.

Another example is that HR departments routinely use AI tools to screen job applicants. However, unless proper care is taken to mitigate the risk of bias, this could lead to discrimination, potentially leaving the business open to legal action.

The same goes for businesses that are using AI tools that make decisions that can affect people’s lives – for example, processing loan applications or allocating healthcare resources.

When it comes to IP and copyright issues, businesses relying on AI-generated content could inadvertently find themselves using content without permission. Several court cases are currently being brought by artists and news agencies, saying their work was used to train algorithms without their permission. The outcome is uncertain right now, but could potentially lead to trouble further down the road for businesses using these tools.

And accountability is also an important issue. Are businesses and employees fully aware of their need to take responsibility for decisions that AI makes on their behalf? A lack of transparency and explainability inherent to many AI systems may make it difficult for them to do so. But this is unlikely to work as an excuse if they should find themselves in hot water due to their actions!

Getting any of this wrong could cause huge financial, legal and reputational damage to a company. So what can be done?

How An AI Policy Mitigates Risk

If a business wants to take advantage of the transformative opportunities offered by AI, a clear, detailed and comprehensive AI policy is essential.

Establishing guidelines around what constitutes acceptable and unacceptable use of AI should be the first step in safeguarding against its potential risks. However, it’s crucial to understand that an effective AI policy goes beyond mere risk mitigation – it’s also a powerful enabler for innovation and growth.

A well-crafted AI policy doesn’t just defend; it empowers. By clearly outlining how AI should be used to enhance productivity and drive innovation, it provides a framework within which employees can confidently explore and leverage AI technologies. This clarity fosters an environment where creative solutions are nurtured within safe and ethical boundaries.

Addressing these issues proactively will also help businesses identify the technological elements necessary for the safe and responsible use of AI.

For example, understanding the data policies around public cloud-based AI tools such as ChatGPT allows businesses to recognize where more private, secure systems — such as on-premises infrastructure – could be essential.

With this policy in place, any organization positions itself on far firmer ground. Rather than stifling them, it will empower organizations with the knowledge that they can experiment and innovate with confidence. An AI policy acts as a launchpad, setting up a framework for responsible and effective AI use that can drive competitive advantage.

The rapid adoption of AI across industries and the risks that this has created means an AI policy isn’t just a good idea — it’s critical to future-proofing any business.

Additionally, putting an acceptable AI use policy in place helps a company to position itself as a serious player in the AI game, rather than just another business jumping on the bandwagon. In an era where AI capabilities are rapidly becoming a benchmark for industry leadership, having a clear AI policy positions your company as a responsible, forward-thinking player. This can be incredibly attractive to investors, partners, and top talent who prioritize ethical standards and corporate responsibility.

It also helps to demonstrate to customers, investors and other stakeholders that an organization is committed to building trust and implementing AI in a transparent and ethical way.

This will be invaluable when it comes to hiring and retaining talent. People with the skills and experience needed to implement organizational AI systems are highly sought-after. Naturally, they’re attracted to companies that are able to demonstrate that they are serious and mature in their outlook and practices when it comes to AI.

This is something that I believe all leaders need to prioritize if they want to benefit from the opportunities offered by AI. A comprehensive AI policy doesn’t only defend; it also enables. It clarifies for all employees how AI should be used to enhance productivity and innovation, fostering an environment where creative solutions are nurtured within safe and ethical boundaries.