Why Businesses Need to Invest in AI Governance

Artificial intelligence (AI) is now integrated into business tools like Microsoft 365 and other workplace productivity platforms. This shift in AI adoption has seen organisations facing more pressure to use AI quickly to stay competitive and improve productivity. However, businesses are still facing risks with AI adoption because they are overlooking the importance of AI governance.

Without proper AI governance, businesses are susceptible to security, compliance, trust, accountability and control risks. Threats like shadow AI are growing, and many employees and business owners are unaware of how to spot this cyber threat, or understand the governance that must be put in place.

Optimising IT is here to explain the key AI governance best practices you need to know, helping you stay competitive, productive and highly secure.

AI Adoption Is Moving Faster Than Governance

ChatGPT, Gemini, Claude and other AI systems are now quite common for businesses to use for various types of tasks. Organisations have quickly adopted AI tools before governance frameworks have been fully established, which has seen a drastic rise in concern from UK IT leaders.

This is due to most AI platforms and suppliers being based outside the UK, meaning AI sovereignty is becoming more in demand. AI sovereignty means that the systems are controlled by sovereign states, offering far more control and privacy on data for UK businesses. However, AI sovereignty for the UK is still not in place, leaving gaps that businesses must fill with the right solutions to continue using AI tools safely.

Growing Risk Of AI Without Governance

What are the biggest risks businesses face then? Well, without following AI governance best practices, businesses are susceptible to the threat of shadow AI.

Shadow AI involves businesses using unauthorised AI tools and platforms without official clearance and oversight from IT teams. Examples of shadow AI can include:

• Entering sensitive company information into public AI tools, such as ChatGPT
• Using AI-generated content without review processes
• Using unauthorised AI agents connected to business systems

These examples of shadow AI can lead to significant business risks, including:

• Data leaks – entering sensitive information on free-tier and public AI platforms can lead to the information being used to further train the AI systems
• GDPR exposure – use of unauthorised AI tools can be in breach of GDPR, in turn running the risk of investigations and fines
• Inaccurate or biased output – shadow AI tools can generate misleading, incorrect or biased information that affects business decisions
• Intellectual property concerns – confidential ideas, code or copyrighted material may be exposed or reused without permission
• Compliance failures – unmonitored AI usage can breach industry regulations, internal policies or legal requirements
• Reputational damage – AI related mistakes or data misuse can harm customer trust and damage the organisation’s reputation

If you are concerned about these risks, it’s best to seek out Control AI Governance and Security Services to put strong policies and measures in place to stay compliant and secure.

Microsoft Copilot, AI Agents & the New Governance Problem

Employing AI governance best practices has become even more challenging with the introduction of agentic AI and autonomous AI agents in tools such as Copilot.

Agentic AI is different to the traditional automation businesses have been using for several years at this point. Traditional automation is pre-programmed to execute commands the same way every time.

Agentic AI is far more dynamic. Users describe the outcome they want to achieve to the AI agent, where it then determines the path it thinks best based on the context provided.

Agentic AI can be used to draft and send emails, modify files, update permissions and interact across Microsoft 365 environments, which may sound like a step in the right direction, but it can pose some risks. While it enables employees to automate work that previously couldn’t, agentic AI also opens the door for unpredictability, errors and cyber attacks.

Another big concern is responsibility because if an AI agent performs an incorrect or harmful action, it may be unclear who is ultimately accountable. Audit trails can also become more complex, as AI systems may take multiple actions autonomously across different platforms and services. This can make it harder to determine whether an action was initiated directly by a human or generated by AI on their behalf.

As AI tools become more autonomous, businesses need stronger governance oversight, and monitoring controls to ensure security, compliance, transparency and accountability are maintained.

AI Governance Is Quickly Becoming The New Cyber Security Priority

As organisations adopt AI tools more widely, AI governance is rapidly becoming a core cyber security priority. AI systems can significantly increase the organisation attack surface by introducing new entry points, integrations and data flows that may not be fully understood or controlled.

Security concerns linked to AI include prompt injection attacks, unauthorised integrations with third-party applications, excessive access permissions and weaknesses in identity and access management.

Businesses must also contend with the growing threat of AI-generated phishing, impersonation and social engineering attacks that are becoming increasingly convincing and difficult to detect.

Because AI systems often process large amounts of sensitive business and customer data, organisations need clear visibility into where data is stored, processed and shared. Without proper governance, businesses risk exposing confidential information, breaching compliance requirements and creating new security vulnerabilities.

AI Governance Best Practices

It’s not just recommended to follow AI governance best practices, it’s a necessity for businesses in today’s digital age. Implementing best practices will help ensure AI tools are used securely, responsibly and in line with organisational policies. Key best practices include:

• Setting AI rules and usage policies – define clear guidelines on which AI tools employees can use, what data can be shared and acceptable use cases
• Employee AI training – educate staff on AI risks, security concerns, compliance obligations and responsible usage practices
• Logging and monitoring – track AI activity, user interactions and automated actions to improve visibility, auditing and incident response
• Governance ownership and accountability – assign clear responsibility for AI oversight, including policy management, risk management and compliance
• Risk assessments – regularly evaluate AI systems for security, privacy, legal, operational and reputational risks before and during deployment

Businesses are also increasingly adopting formal governance frameworks to support AI risk management, including ISO 42001, which focuses on establishing and managing AI governance and management systems. Another example is the National Institute of Standards (NIST) AI Risk Management Framework, which is designed to help businesses identify, assess and manage AI-related risks responsibly.

The Human Side Of AI Governance

There is a constant buzz in the air at the moment about how AI will be replacing many humans for certain jobs and tasks, which for many is a huge concern. We can alleviate these worries, as the human touch will always be needed, especially for agentic AI.

AI governance is ultimately about trust, transparency and responsible use of technology, and it’s crucial humans are still in control of commands for high risk decisions and tasks. Governance AI is particularly important where AI influences areas such as:

• HR decisions – AI assisted recruitment, performance reviews or disciplinary processes may introduce bias or unfair outcomes without human review
• Financial approvals – automated financial decisions could lead to incorrect payments, fraud risks or compliance issues if left unchecked
• Access permissions – AI driven permission changes may unintentionally grant excessive access to sensitive systems or data
• Compliance processes – regulatory and legal obligations still require human accountability, even when AI tools are involved in decision making

How You Can Adopt AI Safely & Responsibly

Now you have a far better understanding of AI governance best practices, it’s time to implement them for your business. But, that’s easier said than done while trying to run your business.

This is where Optimising IT can help. We provide cyber security services and AI control solutions that review your current AI governance practices, help train your employees on the best practices and monitor your AI usage to keep it secure.

Contact us today for expert support to keep your organisation safe in the ever evolving world of artificial intelligence.