If your business doesn’t yet have an AI policy in place, you’re already exposed. Recent data highlights just how quickly the landscape is shifting. IBM’s ‘Global AI Adoption Index 2024’ found 42 percent of enterprises have implemented AI governance frameworks, while another 37 percent are actively developing them.
In Australia, Deloitte’s ‘State of Generative AI in the Enterprise’ report shows over 60 percent of senior executives expect generative AI to significantly impact operations within two years.
This isn’t a niche concern. AI tools are already embedded in everyday workflows across most industries. Whether or not your organization has formally adopted them, chances are your team is experimenting. The specific tools don’t matter. The risk does.
Without a clear AI policy, your people are operating without a safety net, opening the door to reputational damage, compliance breaches and potentially harmful outputs.
Without a clear AI policy, your people are operating without a safety net, opening the door to reputational damage, compliance breaches and potentially harmful outputs. This isn’t scaremongering; it’s strategic governance.
An AI policy is not a dusty legal document. It’s a dynamic guide, setting the tone for safe, ethical and effective use of emerging technologies across your organization. And it’s no longer a nice-to-have – it’s a leadership imperative.
Every business needs an AI policy
Even if your organization hasn’t formally rolled out an AI tool, it’s highly likely someone on your team is using one – drafting an email with ChatGPT, refining a proposal with Copilot or streamlining admin via Gemini. The point isn’t which tool – it’s that they’re already in use. That means the question is no longer if you need an AI policy; it’s how soon you can get one in place.
The risks are real. Just ask the Melbourne lawyer who submitted a court brief drafted by ChatGPT, only to discover it contained fabricated case law – a professional misstep referred to the Legal Services Board for investigation. The real disruption may lie elsewhere: professional indemnity insurance.
Drafting your first AI policy doesn’t need to be overwhelming, but it does require clarity, consistency and forward thinking.
If AI is influencing legal, financial or strategic advice, how will you prove a qualified human signed off? The line between human expertise and machine-generated output is already blurry. In time, I believe insurers will demand greater transparency and may refuse cover where accountability is unclear.
Regulatory frameworks are also accelerating. The European Union’s AI Act is now official. Here in Australia, the Federal Government has introduced a Voluntary AI Safety Standard – a clear signal that regulation is coming. Whether your organization is global or local, the compliance bar is rising. This isn’t about doom and gloom. It’s about being prepared.
A well-crafted AI policy empowers your people to use these tools with confidence – ethically, safely and in line with organizational values. It also protects the business from costly missteps and reputational harm.
What should your AI policy include?
Drafting your first AI policy doesn’t need to be overwhelming, but it does require clarity, consistency and forward thinking. Whether you’re tackling this in-house or with external support, the following components are essential:
Purpose and scope: Define the policy’s objective and clarify which teams, tools or workflows it covers.
Approved use cases: Specify where AI tools can be used – such as marketing content or ideation – and where they shouldn’t, including legal advice or processing personal data.
Human oversight: Reinforce that AI should support, not replace, human judgement. Final decisions must remain a human responsibility.
Data and privacy: Outline what data can and cannot be input into AI platforms, especially third-party tools. This is vital for compliance and risk management.
Tool vetting and security: Establish a process for evaluating and approving new tools. Whether managed internally or via IT/security teams, this ensures consistency and control.
Transparency and disclosure: Clarify when to disclose AI involvement – internally, externally and in client interactions. Trust and accountability depend on it.
Ethical use and bias awareness: Encourage vigilance around errors, omissions or embedded biases. AI is only as good as the data it learns from.
Training and accountability: Identify who owns the policy and how it will be rolled out, updated and communicated. Ongoing training is essential as the tech evolves.
Keep your policy simple, flexible and scalable. It should grow with your business, not stifle it. And above all: write it in pencil. AI is changing fast, and your policy must evolve with it.
Build internally or bring in experts?
Whether you develop your AI policy in-house or bring in external expertise depends on your capacity, risk profile and how you’re currently using AI. If your team is experimenting with low-risk, off-the-shelf tools, a lightweight policy created internally – with input from legal, compliance and IT – may suffice.
If your business is deploying AI in complex, customer-facing or regulated environments (such as finance, legal or healthcare), expert guidance is advisable. An external lens can help align your policy with emerging standards and best practice and ensure your governance stands up to scrutiny.
In either case, appoint a policy champion within your business – someone responsible for monitoring tool usage, facilitating training and adapting the policy as new challenges emerge.
AI isn’t waiting. The businesses that thrive won’t be the ones that sit back. They’ll be the ones that prepare.
An AI policy isn’t a set-and-forget document. And it’s certainly not about curbing innovation. It’s about enabling the safe, strategic use of technology that’s already reshaping how we work.
In my experience working with organizations across Australia, one thing is clear: the earlier you start, the smoother the ride. Deloitte’s global research reinforces this shift, with nearly 80 percent of business and technology leaders predicting significant industry transformation driven by generative AI within three years.
AI isn’t waiting. The businesses that thrive won’t be the ones that sit back. They’ll be the ones that prepare.
