Organizational Leaders Must Act Now to Govern the GenAI Explosion

Written by Adam Stone

In just a few months, we’ve witnessed the transition of Generative AI (GenAI) from a novelty to an everyday tool. Organizations use GenAI solutions to transform operations, streamline workflows, and enhance customer interactions, driving efficiency and delivering value that would be difficult to achieve otherwise. With this surge in adoption, however, comes a new set of challenges that corporate leaders cannot afford to ignore.

If you are a corporate leader suddenly finding your teams experimenting with or relying on GenAI tools, you are not alone. Now is the time to establish basic guardrails on your company’s AI usage to ensure you can harness the transformative power of AI while minimizing exposure to unnecessary risks.

Promise and Peril of GenAI in Business

GenAI tools like ChatGPT, Claude, and many others have unlocked incredible productivity gains. Employees can draft proposals, design graphics, write code, and analyze data at unprecedented speed. This burst of creativity and efficiency can give your company a competitive edge – if managed correctly.

The risks of an unmanaged GenAI landscape are significant:

• Data Security and Privacy: Sensitive corporate or customer data may be unknowingly exposed when employees input it into GenAI systems.
• Intellectual Property Issues: Who owns the content created by GenAI? Does the tool’s output infringe on someone else’s intellectual property rights?
• Inconsistent Use: Without clear guidelines, different teams may adopt or procure different tools and techniques, creating inefficiencies and increasing exposure to unvetted platforms.
• Bias and Reputation Risks: GenAI outputs are only as unbiased as the data they were trained on, meaning your organization could unintentionally perpetuate stereotypes or misinformation.

Thus, the challenge for corporate leaders isn’t just to unlock the potential of GenAI, it’s to do so responsibly and legally.

Why Acting Early Matters

When email, instant messaging, and cloud computing became ubiquitous, many companies waited too long to establish governance. The result? Inconsistent adoption, “shadow” IT, and data leaks that caused reputational damage and regulatory headaches.

Don’t let GenAI become the next unmanaged disruptor in your organization! Establish basic guardrails to guide behavior, decision-making, and clarify accountabilities. In other words, now is the time to establish an “AI Governance” program. By focusing on governance early, organizational leaders can:

• Inform decision-making by identifying which GenAI tools your organization will adopt and how they will be used.
• Mitigate legal and ethical risks by proactively addressing GenAI-related issues like data privacy, copyright protection, and bias.
• Enhance accountability by providing employees with clear guidance and expectations on when and how GenAI can and should be used.
• Maximize ROI by ensuring that your organization is using GenAI in ways that align with business goals, not as scattered experiments.

Three Steps to Get Started

Get ahead of the GenAI curve now by taking deliberate, strategic steps to ensure responsible use. Follow the steps below to reduce risk and unlock the value GenAI can bring to your organization:

1. Inventory and Evaluate Existing Usage

Begin by identifying what GenAI tools are already deployed across the organization. Understand how these tools are integrated into workflows, what data is being inputted, and whether the platforms meet security and compliance requirements.

2. Create Policies, Standards and Guidelines

Develop clear GenAI usage policies, standards and guidelines. At a minimum, organizational leaders should address key questions, such as:

• What types of data are permissible to input into GenAI systems?
• Are GenAI outputs subject to internal review before being shared externally?
• What are acceptable uses of GenAI in the workplace?
• What approval processes are required for procuring, developing and using new GenAI tools?

Collaborate with legal, compliance, privacy, security, IT, HR, and operations teams to ensure these policies are robust and compliant.

3. Educate and Empower Your Teams

Provide training and information sessions on both the potential and the risks of GenAI. Employees should understand not just how to use these tools, but also their limitations and pitfalls. Empower employees to use GenAI as a productivity enhancement tool – not a replacement for critical thinking.

Seize the Opportunity, But Do It Wisely

GenAI offers an unparalleled opportunity for innovation, but only if managed correctly. By making the time now to establish an AI Governance program, corporate leaders can ensure that the organization benefits from GenAI while minimizing risks. Your role isn’t just to oversee the adoption of the latest GenAI tools, it is to do so in a way that ensures long-term success for your organization. The time to act is now!

Looking Ahead: Building an AI Governance Framework

Ready to start building an AI Governance program? Begin with the following steps:

• Establish an AI Governance Committee. Include stakeholders across disciplines and departments to oversee GenAI adoption and monitor risks.
• Invest in AI Literacy. Build internal expertise so that teams understand the ethical, legal, and operational implications of GenAI.
• Stay Ahead of Regulations. Keep tabs on emerging AI-focused laws and regulations like the EU’s AI Act, guidelines such as the NIST AI Risk Management Framework (RMF), and updates to data privacy and security laws to ensure compliance.