Do I need an AI Policy? TechLaB

Do I Need an AI Policy?

In our ever-evolving technological landscape, artificial intelligence (AI) is becoming an integral tool across all industries. Many businesses are integrating AI into their daily operations, so the need for a comprehensive AI policy is becoming increasingly apparent.

The use of AI raises various legal, ethical, and practical issues. An appropriate AI policy allows businesses to conduct their operations using standardised practices, meaning employees will be less likely to misuse the company’s systems. It also allows businesses to take disciplinary action against those who fail to comply with the policy, further protecting them from potential losses.

This article explains the critical factors for businesses to consider when adopting AI and explores why companies must establish robust policies to govern its use effectively. It will also provide helpful tips for drafting and implementing an effective policy.

The use of AI in business

Companies must consider various issues before implementing AI and a policy governing its use. An AI policy will not be effective unless the business identifies how AI can support the company’s needs and interests. It’s also essential to ensure compliance with laws and be realistic about the goals companies want to achieve by adopting AI systems.

Before integrating AI into operations, businesses should establish the following:

1.  What does the business want to achieve by using AI?

The desired outcomes depend on the business’s needs, size, and industry. In most cases, AI is used to automate processes and increase efficiency. Still, companies should establish specific goals to help measure the effectiveness of AI across the business.

For example, its primary use could be to monitor consumer behaviour for marketing purposes and assist with customer service enquiries. Companies may also want to use it to speed up IT operations and automate hiring processes. Whatever the objective, businesses should closely monitor their chosen AI systems to ensure they are helping to achieve their goals.

2. Do they have the resources to fact-check AI results?

AI is far from perfect. Results are between 60% and 95% accurate, depending on the systems used. Businesses must refrain from relying on inaccurate information to conduct operations, particularly if they publish or share such information with their customers.

Therefore, companies should consider the human resources they can afford to allocate for reviewing and editing AI-generated results.

3.  How will data be controlled and processed?

Businesses should understand how they intend to use and process information within their AI systems. This is important from a practical perspective, as companies need to identify how they will use AI. It is also necessary to ensure legal and regulatory compliance. Protecting personal data is more critical now than ever, and companies must be aware of their obligations under GDPR and privacy laws.

4.  Do the systems need to be customised?

Most AI programs are ready-made to address standard business requirements. However, to maximise efficiency, many companies must customise their systems to some degree.

Therefore, businesses must consider the customisation they require and whether they have the funds and resources to develop and implement this effectively.

5.  How will AI affect employees?

AI is a powerful way for businesses to reduce overheads and increase productivity. However, its use may require companies to adapt their employees’ roles or even let go of staff who are no longer needed. Additionally, companies must consider how they want their employees to use their AI systems.

It’s, therefore, vital that businesses think about the impact of AI on their team and prepare themselves to make the necessary changes.

Benefits of an AI policy

An AI policy is advisable for all businesses using AI systems. A policy does not need to be overly complex and should reflect the company’s needs and circumstances, so even smaller businesses using basic AI should consider having one. Even if companies want their staff to refrain from using AI, they should still formalise this in a policy document.

Having a policy is essential because:

  • It states how the business uses AI.
  • It clarifies how employees are permitted to use AI systems.
  • It identifies the relevant laws and regulations and each employee’s responsibility to comply with them.
  • It supports productivity and efficiency.
  • It provides consequences for the misuse of AI.
  • It holds the company accountable for using systems legally and ethically.

The lack of a legislative framework governing AI means company policies are more critical. Although businesses need to dedicate time and money to preparing an effective policy, it allows them to continue to use their systems confidently.

How to prepare an AI policy

Once a business has identified how to use AI, the next step is to create a well-drafted policy to govern this. Companies should take the following steps when preparing their policy:

1. Appoint an individual or team to manage the development and implementation process

State who these people are in the policy and identify their responsibilities. For example, they could be required to file regular reports and hold meetings to track progress. The appointed people need to have a strong understanding of the systems the business is implementing. 

2. State the company’s ultimate objectives

Businesses should draft the rest of their policies to align with their goals, so it’s wise to list them at the start of the document.

3. Address legal requirements

Companies must consider laws relating to data protection, privacy, and others specific to their industry. For example, the General Data Protection Regulation (GDPR) and Data Protection Act 2018 govern the use of personal data in the UK and apply to any AI systems processing such information.

The policy must explain how the company will collect and use personal data, plus how to protect the information. Including this in the policy ensures compliance and reduces the risk of legal action.

4. Identify how systems will be used, by whom, and why

Only certain employees may be permitted to use the company’s AI programs or can only use them for limited purposes. The policy should clarify this to ensure staff do not abuse the systems. Identifying AI’s purpose within the business is also helpful so employees understand why the company has adopted the new programs, and the goals it is working towards.

The policy should also inform team members about mitigating risks, for example, by fact-checking AI-generated results and reporting to senior management on any unexpected issues.

5. Highlight disciplinary procedures

Staff need to know the consequences of misusing AI or failing to comply with the relevant laws. Outlining a transparent disciplinary process in the policy will encourage a consistent and ethical approach to using the systems and protect the company if it needs to take formal action against an employee.

6. Address reporting requirements

Reporting and governance are crucial to businesses’ accountability for using AI legally and ethically. The policy should state what employees and those responsible for the systems must report on.

It should also identify how the company makes decisions and manages risks related to or arising from AI. The company should keep clear, written records that are easy to refer to and rely on.

7. Provide regular reviews

Companies should review and update their AI policies accordingly to reflect any developments. The policy should state how regularly reviews will occur and who is authorised to change the document. For example, reviews may happen once a month with any amendments to be approved by a member of senior management.

How to implement an AI policy

The next issue for businesses to consider is how to implement their AI policies effectively. Below are some tips to help with this:

  • Write the policy in simple language so it is easy for employees to understand. Instructing a lawyer to draft the policy to ensure consistency and compliance is sensible.
  • Communicate the policy to all staff members, for example, by emailing it to them or posting it on a shared work system.
  • Provide training to employees at all levels of the business.
  • Encourage open communication and reporting. Assure team members they will not be disciplined for innocent mistakes if they report them promptly.
  • Hold individual meetings with staff whose roles will be impacted and explain how their responsibilities will change.
  • Draw employees’ attention to the disciplinary procedures.


However prominent AI is within a particular business, an AI policy is a great way to formalise its use and ongoing development. Companies without such policies risk an inconsistent approach to using AI systems, which can open the floodgates to various legal and ethical issues.

Before preparing a policy, businesses must understand the goals they want to achieve and the resources they can allocate to AI. Seeking expert advice on this, internally or externally, is the best way to ensure nothing is missed.

When drafting the policy, companies must clearly define the roles and responsibilities of different team members and ensure the document is accessible. Subsequent training and encouraging staff to ask questions are great ways to implement an effective policy.

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