AI in the Workplace: Strategic potential meets governance responsibility

Artificial Intelligence (AI) is reshaping the way businesses operate, from streamlining workflows, enhancing decision-making, to supporting strategic initiatives. For business owners and HR professionals, the benefits are clear: AI can help draft documents, summarise complex information, and even assist in recruitment and performance analysis. But as Uncle Ben in Spider Man says, “with great power comes great responsibility”.

AI is a tool, not a replacement for human advocacy, client interaction, or professional judgement. It can support strategy, but it cannot replicate the nuance of human advice or the trust built through personal relationships. This distinction is critical as businesses increasingly integrate AI into daily operations.

A recent example highlights the risks of unchecked AI use. Deloitte admitted to using generative AI in a $440,000 government report, which resulted in fabricated citations, commonly referred to as ‘hallucinations.’ These hallucinations occur when AI generates plausible but false information, because its goal is to produce convincing output, not necessarily factual truth. The fallout? A partial refund to the federal government, embarrassment and reputational damage.

This case underscores a growing concern: Are businesses adequately prepared to manage the risks of AI?

Most organisations currently address AI use within their Acceptable IT Use Policy. While this provides a solid foundation, the AI landscape is evolving rapidly, often daily, and businesses must stay ahead of the curve to remain informed, compliant, and competitive. The increasing sophistication and accessibility of AI tools demands a more robust approach. Specifically, the development of standalone AI Policy.

A dedicated AI Policy should:

• Define permitted and prohibited platforms and uses of AI across roles and departments. As an example, this could extend to limiting the scope of business approved platforms to Copilot and certain permitted tasks.
• Clarify data handling protocols, especially around confidential or sensitive information. By clearly outlining what information can be entered into AI an employer will help to ensure confidential obligations are met.
• Outline ethical considerations, including bias mitigation and transparency. Ensuring that employees do not rely on AI’s outputs for decision making is key.
• Establish accountability, ensuring employees understand the risks and limitations of AI-generated content.
• Provide incident response and escalation processes, by including clear steps for reporting, investigating, and resolving any AI-related issues such as data leaks or inaccurate outputs.

Transparency is key. Employees need to know where AI can and cannot be used. This helps prevent data leaks, protects intellectual property, prevents ‘hallucinations’ and ensures compliance with privacy obligations. It also reinforces the importance of human oversight, because AI is only as reliable as the information it’s fed, and it doesn’t know when it’s wrong.

AI is here to stay, and its potential is enormous. But without clear governance and informed users, it can expose businesses to reputational, financial, and legal risks. By developing a thoughtful policy, investing in employee training, and reinforcing the value of human judgement, organisations can harness AI responsibly and effectively.

If you have questions or concerns regarding AI in the workpace, please contact us below and one of Workplace Strategists will be in touch within 24 hours.