Why your company should govern how it uses AI

But legal compliance shouldn’t be the only reason to govern how your company uses AI. There are various others, like supporting responsible use or protecting your own business interests. Here are a few areas where thoughtful AI governance helps:

Data protection and data security

Once data goes into an AI system, you lose control over it — so governing data use in approved tools is a basic way to protect it.

Every company wants to keep its data safe, whether that means trade secrets, contract terms, information entrusted to it by clients, or personal data. The motivation varies. Sometimes it's plain business interest. Sometimes it's the fear of breaching a contract and paying damages. Where personal data is involved, it's might be the prospect of regulatory fines and reputational damage if something leaks. Either way, protecting data is a top priority. Companies have long relied on a combination of security systems, password protection, physical safeguards and firewalls, the more security-minded ones have even implemented organisational measures and role based access rights on top. But the moment data goes into an AI system, that control is gone. So it's essential to keep control over one thing at least: which types of data may be uploaded and to which systems. Careful tool selection can keep protection at an adequate level and, where relevant, helps the company meet the commitments it has made in client contracts.

Keeping the company's knowledge in-house

Company materials uploaded to personal AI accounts can leave with employees, while approved tools with company accounts prevent that loss of knowledge.

Over time, every business accumulates a large body of knowledge that supports its position and growth. This might include internal processes descriptions, templates, brand materials and best practices: all the things staff relies on to work efficiently. That's fine as long as the employee stays. If they leave, though, the company can find itself exposed if everything they loaded into a personal AI subscription leaves with them. Requiring staff to use approved AI tools with company accounts helps prevent this. When people are given the right tools and proper training, they have no reason to quietly turn to their own private subscriptions.

Protecting intellectual property and copyright

AI-generated content isn't protected by copyright on its own, only combined with meaningful human input — and only then can a company pass the rights on to its clients.

This is the same concern about what happens to the company's intellectual property, from a slightly different angle. The issue is less about how to avoid losing data and more about how to aquire the rights in the first place. AI-generated content isn't protected by copyright on its own. For protection, the final work has to reflect at least some meaningful human creative contribution. The relevance of this question depends on the sector and the line of business. For some companies, owning the rights to what they create or develop is fundamental. For others, it's a secondary concern. But no company wants to stumble across a text, image or video it thought was its own being used by someone else. And a company that produces materials for clients is usually contractually responsible for transferring the usage rights, which is only possible if it holds those rights itself. That makes two things essential. First, staff should use carefully selected AI tools whose terms prevent the provider from reusing the output elsewhere. Second, the company should clearly teach its staff how to use AI properly and why human involvement in the creative process is necessary

Responsibility for the output

Material produced by AI counts as output issued in the company's name, for which the company is accountable just as if an employee had made it.

Many people don't stop to think that AI-generated material counts as letters, offers and responses issued in the company's name. A company can spare itself a lot of trouble if it chooses its AI tools carefully rather than letting staff work with whatever they fancy, which sometimes means the free, lower quality versions. The staff should also be trained on the importance of critically reviewing, and where necessary rewriting, AI-generated material (the so-called human in the loop). If the AI gets a price wrong, strikes the wrong tone or ranks a job applicant incorrectly, the company is liable for all of it, just as it would be if a flesh-and-blood colleague had said or decided it. Beyond meeting the legal requirements for human oversight (in automated decision-making, for instance), it is in the company's own interest to build AI literacy, choose its tools with care and use them responsibly.

More controlled AI spending

Without central oversight, AI spending can spiral, but a consistent approach and company plans keep costs reasonable, and are more secure too.

There's a financial reason for central oversight of AI, too. Tools, plans and tokens can be combined in endless ways, and the bills can add up fast. If a company has a consistent approach to AI use, selects tools with cost in mind and sets clear rules for their use, spending can stay within reasonable limits. Business plans are also the better choice for most tools for information security considerations also as they usually give you more control over settings and often include an option to stop the tool from training on your data. In most cases, they're also what plans that make lawful the use of the output for business purposes.

Responsible AI use involves many more considerations, and we'll cover them in a separate article.

This article is general information about the EU AI Act, not legal advice for your particular situation. If you have questions, please get in touch.