AI Governance: What You Need to Know & Best Practices

AI Governance: What You Need to Know & Best Practices

Jordan Loyd


November 29, 2023

9 Minutes

Artificial intelligence (AI) has rapidly transformed various industries in recent years, offering unprecedented capabilities and opportunities. However, with the rapid growth of AI, the need for effective governance to ensure its responsible and ethical use has become indispensable. AI governance refers to the policies, frameworks, and practices that guide the development, deployment, and use of AI in both public and private sectors.

What is AI Governance, and Why is it Important?

Governing AI is about creating a framework of standards, rules, and regulations to guide the ethical and responsible use of AI technologies. This includes formulating and enforcing policies, protections, and guardrails that shape AI's design, deployment, and operation.

AI governance is a complex, multi-dimensional field that demands careful attention to various factors. Central to this is developing clear, comprehensive guidelines for AI systems. These should emphasize ethical principles like fairness, transparency, and accountability, ensuring AI aligns with these values.

AI governance tackles potential risks and mitigates negative impacts associated with AI usage. This involves preventing AI tools from perpetuating biases or discrimination and ensuring robust privacy and data protection, given AI's reliance on and access to extensive personal data.

Accountability and transparency mechanisms form another crucial aspect of AI governance. Organizations must be able to elucidate their AI systems' decision-making processes, offering clear rationales, especially in critical sectors like healthcare and finance, where AI decisions have far-reaching business consequences.

Organizations can enhance transparency, accountability, fairness, safety, and trust in AI by implementing effective AI governance policies. This not only bolsters public confidence and acceptance of AI but also assures that the technology is used for societal benefit, avoiding harm or the deepening of existing inequalities.

Why do I Need to Focus on AI Governance?

As AI continues to permeate various sectors, such as healthcare, finance, transportation, and education, it is imperative to focus on effective AI governance to avoid potential pitfalls and unintended consequences. AI tools can perpetuate biases, reinforce discrimination, and infringe upon privacy rights without proper governance. Additionally, AI systems may make decisions without human oversight, threatening and undermining fundamental human values and principles. Therefore, an increased focus on governance is essential to ensure that artificial intelligence is developed and utilized to align with societal values, respect human rights, and promote the well-being of individuals and communities.

When it comes to healthcare, AI has the potential to revolutionize the industry by improving diagnostics, predicting disease outbreaks, and personalizing treatment plans. However, without effective governance, there is a risk of AI algorithms perpetuating biases in healthcare delivery. For example, if AI systems are trained on biased datasets, they may inadvertently discriminate against certain patient populations, leading to unequal access to healthcare services. By focusing on AI governance, we can ensure these systems are designed and implemented to promote fairness, equity, and inclusivity in healthcare.

In finance, AI-powered algorithms are used for credit scoring, fraud detection, and investment strategies. While these applications can enhance efficiency and accuracy, they raise concerns about transparency and accountability. Without proper governance, AI systems in finance may make decisions that are difficult to understand or challenge, leading to potential financial risks and market instability. By prioritizing AI governance, we can establish guidelines and regulations that promote transparency, accountability, and responsible use of AI in the financial industry.

group of individuals in a meeting discussing the implications of an AI governance framework and AI ethics related to the framework

Transportation represents an area where artificial intelligence is making significant advancements, particularly given the development and testing of autonomous vehicles. While self-driving cars can improve road safety and reduce traffic congestion, they also pose ethical dilemmas and safety concerns. Without adequate governance, AI transportation systems may prioritize the vehicle occupants' safety over pedestrians or cyclists, leading to potential harm and accidents. Effective AI governance can ensure that autonomous vehicles are developed and deployed to prioritize public safety, ethical decision-making, and the well-being of all road users.

Education is another sector where artificial intelligence is increasingly utilized, with applications ranging from personalized learning platforms to automated grading systems. While AI can enhance educational outcomes by providing tailored instruction and feedback, there are concerns about data privacy, algorithmic biases, and the potential for replacing human teachers. By emphasizing AI governance, we can establish safeguards to protect student privacy, mitigate biases in educational algorithms, and ensure that AI systems complement and support human educators rather than replace them.

Key Principles of an Effective AI Governance Framework for AI Models

A practical AI governance framework should be created and guided by several fundamental principles to ensure responsible and trustworthy deployment of AI technologies:


Organizations should provide transparent information about AI systems' use, capabilities, limitations, and potential biases to promote understanding and accountability.

Transparency is crucial in AI governance to foster trust and ensure the responsible deployment of artificial intelligence. By providing clear information about AI technology, organizations can promote understanding among stakeholders and enable them to make informed decisions. Additionally, transparency helps identify and address potential biases within AI algorithms, ensuring fairness and preventing discrimination.


Developers and users of AI systems should be held responsible for the outcomes and actions of these systems, with mechanisms in place for redress and remediation.

Accountability is a fundamental principle in AI governance that ensures that those who develop, misuse, abuse, or cause harm through their use of AI tools are held responsible for their actions. By establishing mechanisms for monitoring, redress, and remediation, companies can address any harm caused by AI technologies and provide a means for affected individuals to seek justice. This principle promotes ethical behavior and encourages the responsible use of AI.


AI systems should be designed and deployed in a transparent manner that ensures fairness and prevents discrimination, considers diverse perspectives and minimizes biases

Fairness is a critical principle in AI governance that aims to prevent discrimination and ensure fair treatment for all individuals. By considering various factors such as race, gender, and socioeconomic status, organizations can mitigate the risk of perpetuating existing inequalities and promote a more fair society.


An AI governance framework should be created to prioritize protecting personal data and ensure compliance with applicable privacy laws and regulations.

Privacy is a paramount concern in AI governance efforts, as the collection and processing of personal data are integral to many AI models. By safeguarding personal data, companies can build trust with users and maintain the confidentiality of sensitive information.

Risk Assessment

Companies should conduct comprehensive risk assessments to identify and address potential risks associated with AI systems, including unintended consequences, costs and societal and business impacts.

Risk assessment and risk management is a crucial component of AI governance that helps organizations identify and mitigate potential risks associated with artificial intelligence. Companies can anticipate and address unintended consequences and potential societal impacts by conducting comprehensive assessments. This proactive approach to risk management enables organizations to implement appropriate safeguards and ensure AI technologies' responsible and ethical deployment.

repeating image of computers focused on the understanding of AI governance and adhering to regulations

Best Practices for Implementing AI Governance Frameworks

Implementing effective AI governance requires a multifaceted approach, incorporating the following best practices:

Engage Stakeholders

To ensure the development and implementation of AI governance frameworks are comprehensive and inclusive, involving diverse stakeholders is crucial. This includes experts in the field of AI, policymakers who can provide regulatory guidance and stakeholders from affected communities who can offer valuable insights into the potential social impact of AI technologies.

Establish Clear Policies

Developing clear and comprehensive policies is essential for effective AI governance. These policies should outline the ethical guidelines, responsibilities, and requirements for developing, deploying, and using AI technologies. Organizations can ensure that AI technology is designed and used responsibly and accountably by providing a transparent framework.

Ensure Compliance

Regularly assessing and monitoring compliance with AI governance frameworks is vital to maintaining ethical standards, legal requirements, and industry best practices. Organizations should establish mechanisms to evaluate the impact of AI technology, identify potential biases or risks, and take corrective actions when necessary. This ongoing evaluation and monitoring process will help build trust and confidence in AI systems.

Invest in Education and Training

Companies should invest in education and training programs to foster a culture of responsible AI use. These programs should focus on AI ethics, bias mitigation efforts, and data privacy. By providing developers, users, and decision-makers with the necessary knowledge and skills, organizations can ensure that AI technologies are developed and used in a manner that respects individual rights, societal values, and ethical principles.

Promote Collaboration and Knowledge Sharing

Collaboration among companies, researchers, and policymakers is crucial for advancing AI governance. By sharing best practices, lessons learned, and technological advancements, stakeholders can collectively address the challenges associated with AI technology. Collaboration can also help establish global industry standards and guidelines, ensuring a consistent and responsible approach to AI governance across different industries and jurisdictions.

By incorporating these best practices into AI governance frameworks, organizations can navigate the complex landscape of AI technologies while minimizing risks and maximizing the benefits for individuals and society.

AI Ethics and AI Governance: A Necessary Relationship

The ethical considerations in AI governance are paramount in ensuring responsible and equitable use of AI technologies. In today's rapidly advancing technological landscape, integrating artificial intelligence into various aspects of our lives has become increasingly prevalent. From autonomous vehicles to personalized recommendation systems, AI has the potential to revolutionize industries and improve our daily experiences at an unprecedented magnitude. However, with great power comes great responsibility, and it is crucial to establish robust ethical frameworks to govern the development and deployment of AI models.

Another ethical concern in AI governance is privacy. AI technologies often rely on collecting and analyzing large amounts of personal data to make informed decisions. While this data can be valuable for improving AI performance, it raises privacy and data protection concerns. AI governance frameworks should include robust privacy safeguards to protect individuals' personal information and ensure that AI systems are not used to infringe upon privacy rights.

robotic arms illustrating RPA and automation

As AI technologies automate tasks traditionally performed by humans, there is a legitimate concern about job displacement and the potential widening of socioeconomic inequalities. AI governance frameworks should address these concerns by promoting the responsible deployment of AI technologies, supporting retraining and upskilling programs, and fostering a smooth transition to the AI-driven economy.

AI governance frameworks should encourage public discourse and stakeholder engagement. The decisions regarding AI development and deployment should not be made solely by technologists or policymakers but should involve input from a wide range of stakeholders, including experts from various disciplines, civil society organizations, and affected communities. By incorporating diverse perspectives, AI governance can better reflect societal values and ensure that the benefits and risks of AI technologies are distributed equitably.

Interdisciplinary approaches are also crucial in AI governance. The development and deployment of AI systems require expertise from various fields, including computer science, ethics, law, philosophy, sociology, and psychology, among others. By fostering collaboration between disciplines, AI governance frameworks can effectively address the complex ethical challenges associated with AI technologies.

How to Measure Effective AI Governance

Measuring the effectiveness of AI governance is crucial to any company to ensure continuous improvement and accountability. It is not enough to implement AI governance frameworks; organizations must also assess and evaluate their effectiveness to ensure they achieve their intended goals. By regularly measuring AI governance effectiveness, organizations can identify areas for improvement, address emerging challenges, and enhance the responsible use of AI systems.

One key measure in assessing AI governance frameworks is transparency assessment. This involves evaluating the extent to which companies disclose information about AI systems. Transparency is essential for building trust and understanding among stakeholders. It allows individuals to clearly understand how AI systems are being used, including their purpose, limitations, and potential biases. By providing this information, organizations can demonstrate their commitment to accountability and responsible AI use.

Another essential measure is impact assessment. This involves assessing the societal impact of AI systems. AI technologies can impact individual rights, equality, and social justice significantly. Evaluating how AI systems affect these areas and whether they promote positive outcomes is crucial. By conducting impact assessments, companies can identify any unintended consequences or biases in their AI systems and take appropriate actions to mitigate them.

Accountability evaluation is also a critical measure in assessing AI governance frameworks. It involves reviewing the mechanisms in place to hold developers and users of AI systems accountable for their actions and outcomes. This includes evaluating whether companies have clear guidelines and policies for responsible AI use and mechanisms for addressing any issues or concerns that may arise. By ensuring accountability, organizations can demonstrate their commitment to ethical AI practices and build stakeholder trust.

Lastly, compliance audit is an essential measure in assessing AI governance frameworks. It involves verifying compliance with legal and regulatory requirements. AI technologies are subject to various laws and regulations, and organizations must ensure that they adhere to these standards. Compliance audits help companies identify any gaps or areas of non-compliance and take corrective actions to ensure ethical and responsible AI use.

How do you balance innovation and accountability with AI Governance?

The balance between innovation and accountability in AI governance is delicate yet essential. It is crucial to foster an environment encouraging innovation and exploration of AI technologies while ensuring these systems' accountability and responsible use. This balance can be achieved through:

  • Agile Regulation: Develop regulatory frameworks that are flexible and adaptable to evolving AI technologies and regional nuances like the European Union's proposed Artificial Intelligence Act, allowing for innovation while establishing minimum standards and requirements.
  • Ethics by Design: Incorporate ethical considerations and human-centered design principles throughout the entire lifecycle of AI systems, promoting responsible innovation and addressing potential risks upfront.
  • Engage Stakeholders: Foster collaboration between innovators, policymakers, and other stakeholders to create a shared understanding of the responsible use of AI technologies while supporting innovation.
  • Continuous Assessment: Regularly assess AI systems' impact and ethical implications, making necessary adjustments to governance frameworks to maintain the balance between innovation and accountability.

Striking the right balance between innovation and accountability is crucial for ensuring the advancement and benefits of AI technologies while safeguarding against potential risks and societal harm.

In summary, the role of AI governance is indispensable in guiding the ethical and responsible utilization of AI technologies. This governance framework ensures AI systems are developed, deployed, and applied in ways that uphold our societal values, safeguard human rights, and champion fairness and transparency. By embracing core principles of robust AI governance and integrating best practices, organizations can effectively mitigate risks, build public trust, and unlock the full potential of AI benefits. Central to this is a careful consideration of ethics, balancing innovative strides with accountability in AI governance. This balance is crucial for AI technologies to emerge as a positive force in contemporary society. As we look to the future, with AI regulation and international policy dynamics evolving, governments will continue to adapt by shaping new laws and regulations. Staying ahead of these changes is critical to safeguarding both your customers and your organization in this evolving era. Interested in learning more about how we help organizations of all sizes rationalize their AI Governance? Find out more about our AI Readiness Assessment here.