BSI warns of AI governance crisis

The British Standards Institution (BSI) has warned of a looming artificial intelligence (AI) governance crisis in organizations.

The leading standards body highlighted a growing “AI governance gap” as businesses rush to adopt AI technology without first putting the requisite controls and processes in place.

While business leaders are chasing productivity boosts and cost reductions by investing large sums in AI, new evidence suggests many are sleepwalking toward significant governance failures, a BSI study found.

The AI governance gap

Almost two-thirds (62 percent) of surveyed business leaders expect to increase investment in AI in the next year with 59 percent considering AI to be crucial to their organization’s growth, according to BSI.

However, less than a quarter (24 percent) reported that their organization has an AI governance program, a figure that rose modestly to just over a third (34 percent) in large enterprises.

While nearly half (47 percent) say AI use is controlled by formal processes, only a third (34 percent) report using voluntary codes of practice. Less than a quarter (24 percent) say employee use of AI tools is monitored and only 30 percent have processes to assess the risks introduced by AI and the required mitigations. Just one in five businesses (22 percent) restrict employees from using unauthorized AI.

There is also limited focus on what happens if AI goes wrong. Less than a third (32 percent) of organizations have a process for logging where issues arise or flagging concerns or inaccuracies with AI tools so they can be addressed, while just 29 percent cite having a process for managing AI incidents and ensuring timely response. 

“The business community is steadily building up its understanding of the enormous potential of AI, but the governance gap is concerning and must be addressed,” commented Susan Taylor Martin, chief executive of BSI. “While it can be a force for good, AI will not be a panacea for sluggish growth, low productivity, and high costs without strategic oversight and clear guardrails – and indeed without this being in place, new risks to businesses could emerge.”

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Data management and training are key to AI governance

A key component of AI governance lies in how data is collected, stored, and used to train large language models (LLMs). However, only 28 percent of business leaders know what sources of data their business uses to train or deploy its AI tools, according to BSI.

What’s more, just two fifths (40 percent) said their business has clear processes in place around use of confidential data for AI training.

Meanwhile, there is some complacency among business leaders that the workforce is well-equipped to navigate the disruptions of AI and the new skills required to get the best out of it. 

Over half of leaders (56 percent) say they are confident their entry level workforce has the skills needed to use AI and 57 percent say their entire organization currently possesses the necessary skills to effectively use AI tools in their daily tasks. Despite this, only a third (34 percent) of businesses have a dedicated learning and development program to support AI training.

“Overconfidence, coupled with fragmented and inconsistent governance approaches, risks leaving many organizations vulnerable to avoidable failures and reputational damage,” said Taylor Martin. “It’s imperative that businesses move beyond reactive compliance to proactive, comprehensive AI governance.”

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