Artificial Intelligence (AI) is a transformative technology. If you haven’t considered the use of artificial intelligence in your business, chances are that you will soon.

AI technologies are revolutionising business with automation, insight, and decision-making abilities. And they present boundless opportunities for those who are equipped to use their potential.

However, new technology always carries new risks. Some are known – many are unknown. Notably, AI tools are primarily internet-based technologies. This brings some pretty serious privacy and data security implications.

Especially with 11% of the data employees paste into ChatGPT being sensitive information.

While generative AI can access and process large amounts of data in seconds, its online nature can potentially expose sensitive data and critical systems to cyber threats. Misuse, whether intentional or accidental, can lead to serious consequences.

With these opportunities, and despite the risks, it’s no longer a question of whether your business should use AI. In fact, it’s likely that many in your business already are. A 2023 report showed that 68% of employees using generative AI did not tell their bosses.

An image showing that 65% of employees using generative AI did so without telling their bosses.

That’s why we’re more concerned with your business doing so responsibly and securely. This is why you might want to consider the inclusion of AI company policies in your business.

In this article, we’ll guide you on how to effectively integrate AI into your company policies. By doing so, we aim to help you navigate the uncertainties surrounding using AI in your business.

But first, let’s go into some background.

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What Role Does AI Have In Your Business?

Defined broadly, AI is the simulation of human intelligence processes by machines, computer systems in particular. It entails:

  • Learning: gathering information and rules for using it
  • Reasoning: applying rules to reach defined or approximate conclusions
  • Self Correction: deciding how to respond without human interaction

Machine Learning (ML) is a subset of AI. It involves using algorithms to examine data, learn from it, and then make a prediction about something in the world.

An infographic detailing definitions of AI and Machine Learning.

So how can you use AI in your business? Well, there are a number of applications. You could use it for customer service with chatbots, product recommendations in marketing, streamlining supply chains, or even make a predictive financial analysis.

There are a lot of AI tools around at the moment. Some, properly utilised, can increase efficiency, reduce costs, and give you that competitive edge.

AI development has reached a point where we’re likely to consistently see game changing technology released over the coming years.


Before we get carried away, there are risks. For instance, because AI systems rely heavily on data, they can amplify existing biases present in that data, leading to a potential impact on outcomes.

These systems are also at risk from cyber threats. After all, they are internet based. Remember, true privacy with any internet-based system is rare, if not non-existent.

Therefore, you want to identify areas within your business where AI and ML are beneficial, while also considering the risks. These areas might include data-heavy tasks or repetitive processes, tasks requiring deep insights from data analysis, or customer facing tasks that could benefit from personalisation.

Identifying these areas will provide a foundation for AI usage policy and ensure practical and beneficial use of AI in your business.

Considerations for an AI Company Policy

Creating an AI policy involves more than just understanding the technology and its potential. It’s about creating a framework that outlines the operational boundaries and safeguards necessary when deploying these technologies.

Balancing AI Innovation with Risk Management

Striking the balance between fostering AI innovation and managing both lower level and high risk items is crucial. AI and ML can offer competitive advantages and efficiencies, yet they can also pose threats to security, privacy, and fairness. Your policy should promote responsible AI usage, focusing on risk identification, mitigation strategies, and consistent monitoring of AI applications.

Data Privacy and Security

We’ve already mentioned the security concerns associated with AI and ML technologies. Your AI policy must clearly address these, outlining practices including data collection, management, storage, as well as use of data. All while maintaining compliance with data protection laws and regulations. This is extremely important in the case of use of personal data.

Transparency and Accountability

Stakeholders, including employees, customers, and partners should understand how your company uses AI. This includes what data it’s processing, and how decisions are made. Your policy should set out clear guidelines on transparency, including explainability of AI decisions, and establish an accountability framework for any issues arising from AI applications.

Steps to Creating an AI Policy

Creating an AI policy requires planning, an understanding of the technology’s impact, and engaging with stakeholders. Here’s a step-by-step guide on how to create an effective AI policy for your business.

Identify the Right Stakeholders

The first step is to identify who you should involve in its creation. Your AI policy will impact many aspects of your business. Again, you might use it for data handling, IT security, HR, and customer relations. Therefore, you need to involve people from all across your organisation. If your business is bigger, this may include:

  • IT experts
  • Data privacy officers
  • Legal advisors
  • HR professionals
  • Business unit leaders

If you don’t have someone in a designated role in each sector, you’ll need to carefully consider how they might be impacted.

In short, engage with a diverse group of stakeholders and ensure different perspectives are taken into account to help foster company wide buy in.

Set Clear AI Policy Goals and Objectives

Next, define clear goals and objectives for your AI policy. This could include promoting responsible AI use, ensuring compliance with relevant regulations, protecting data privacy, and mitigating AI-related risks. Your goals and objectives should align with your company’s overall strategy and the specific ways in which you plan to use AI.

Outlining Essential Components of the AI Policy

Now, outline essential components of your AI policy. This should include:

Data Privacy and Security Measures: Clearly define how AI systems should handle and protect data. This might involve protocols for data access, data sharing, encryption standards, and procedures for responding to data breaches.

Compliance with Regulations: Your policy should ensure that all AI usage complies with applicable laws and regulations. This includes data protection laws, industry-specific regulations, and any standards related to AI and ML technologies.

Ethical Principles: You may also want to incorporate ethical considerations in your policy. Specify acceptable and unacceptable uses of AI, and address issues such as algorithmic bias, transparency, and accountability.

Review and Update Mechanisms: Finally, your policy should include a system for regularly reviewing and updating the policy as AI systems and related legal and societal norms evolve.

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Implementing and Monitoring Your AI Policy

After creating your policy you need to ensure it’s implemented and monitored.

Training and Awareness

The success of your policy hinges on awareness and understanding across your organisation. To help with this, consider running a training program. Employees should understand the purpose and goals of the AI policy and their roles in adhering to it. This might involve workshops, online courses, or a one-on-one session depending on your organisation’s size and structure.

Regular Audits and Policy Updates

AI and ML technology evolves rapidly. Unfortunately, this means your policy should too. Regular audits and updates will help you ensure your policy remains up-to-date with advancements. This might include annual or bi-annual reviews of the policy, with adjustments made where necessary.

Also, consider engaging external auditors to provide an objective evaluation of your AI policy and its effectiveness. External audits are helpful at identifying blind spots and offer valuable insights on industry standards and best practices.

Ongoing Monitoring and Evaluation

Beyond regular audits, ongoing monitoring will ensure your compliance with the AI policy and assess its effectiveness. Monitoring mechanisms will range from regular check-ins with team members to more formal evaluation processes.

Encourage feedback from all stakeholders to gain a holistic view of the AI policy’s performance.

Essential Guidelines for Your AI Policy

To wrap up, here’s a list of must-have components that your AI policy should cover.

Determine the Users of AI Tools

You’ll need to decide who in your business can use these tools. Is it the entire team, a particular department, or only specific roles? Base this decision on the nature of the AI applications and the relevance to the team’s tasks.

Outline Responsible Use Guidelines

Your AI policy should outline best practices for responsible use. This can include guidelines on frequency of use, the types of tasks they can be used for, and protocols to follow if the tools don’t work as expected.

Restrict Data Input

We’ll make this simple, never input customer data.

Protection of Intellectual Property

Similar to customer data, the AI policy should strictly prohibit the input of any form of intellectual property into AI tools. This will help prevent unauthorized access, misuse, or theft of your company’s proprietary information.

Leadership and Compliance

Leaders in your business need to set a positive example for AI usage. Leaders need to not only comply with the policy, but also actively promote its adherence across their teams.


There are plenty of benefits to incorporating AI in your business operations. However, you need to govern its use responsibly. By creating a thorough and well thought out AI policy, you can ensure a balance between leveraging AI capabilities and protecting your data, customer information, and intellectual property.

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