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12 September 20235 minute read

AI governance: Balancing policy, compliance and commercial value

Cutting through the AI hype and hysteria to offer a practical perspective on AI governance, strategies, challenges and risks

Concerns over responsible AI have risen sharply alongside AI adoption, and global policymakers are rapidly formalizing AI rules to mitigate societal, technical and commercial challenges.

Realizing the transformational potential of AI means distinguishing genuine matters of concern from ‘phantom’ risks, and enabling continued progress with appropriate legal frameworks, compliance protocols and ethical guardrails. 

This report cuts through AI hype and hysteria to offer a practical perspective on AI governance, strategies, challenges and risks. These insights are based on original research among 600 leaders in a wide range of organizations across the globe. We asked about what they’re already doing in relation to AI, what they’re planning to do and what concerns remain to be addressed. 


“The breakneck pace of AI evolution makes governance challenging. But the companies that succeed will be those that meet ethical norms, align AI strategy to values and establish robust protocols.”

Lord Tim Clement-Jones

Co-Chair of the UK's All-Party Parliamentary Group on Artificial Intelligence

AI Audio

AI adoption

AI proliferation is driven from the outside in

We are at a turning point in the evolution of AI. Generative AI has become ubiquitous, with ChatGPT experiencing the fastest growing user base in history, and as AI hardware continues to evolve we are seeing an explosion of new offerings and startups come to market. 

Our research confirms that AI is a fact of modern business. 

The majority are buying solutions from external AI vendors. The amount of data and investment in computational resources required to train the largest foundational models is vast. This high cost of implementation and concerns over how and when AI will provide a return on investment means that very few organizations are exclusively building their own solutions in house – with 22% choosing a hybrid approach. 

“Two clear messages ring out from this research. First, there is an urgency to adopt AI – this is not an area where businesses feel able to wait and see. Secondly, the need to ensure that the amazing opportunities in productivity and efficiency do not come at an ethical cost to the business and community.”
Jeanne Dauzier
Partner, Intellectual Property and Technology
Co-Lead, Global AI Practice Group

AI challenges and risks

Organizations are facing uncertainty as well as opportunity

Globally, AI-specific regulatory reform is adding disparate rules to data protection, confidentiality and intellectual property. In addition, governance frameworks, policies and practices must be made fit for the AI era, and partner and vendor arrangements take on a different complexion where demand for innovative AI solutions is so high.

Against this backdrop, it is perhaps unsurprising that 99% of survey respondents ranked governance as a critical AI challenge, with difficulty defining what good governance looks like in their organization.

The overwhelming majority (96%) also cite overseeing AI initiatives to ensure they remain within regulatory guidelines as a top challenge, and we know that many organizations struggle to find the right capabilities and structures internally to exercise proper oversight.

"Companies should be wary of knee jerk reactions or blanket bans on AI use, which have the potential to derail legitimate and strategic AI work. Instead, use governance as a guardrail on activity and take simple steps like securing an enterprise license for AI tools, which are much more protective than personal ones."
Bennett B. Borden JD-MSc
Partner and Chief Data Scientist

AI governance

Pressure to adopt AI means ethics and governance won’t slow progress

Our data reveals inconsistent approaches to AI governance and ethical standards that are unlikely to meet the scale of the issues raised by AI. Organizations are taking necessary but not sufficient action.

The majority (83%) of companies have a vision and strategy for AI. Of that number, 86% have also adopted an AI code of ethics designed to guide projects and initiatives.

Half of leaders (49%) want to unlock the value of AI in line with their organizational values and a further 65% have put intention into action by terminating AI supplier contracts over ethical concerns.

“Companies often approach AI deals in the same way as standard cloud deals or IT services contracts. But AI is different, and having an appreciation of the technology and how it works is important. Knowing the model, where value sits, what controls you retain over the data, what data might have been used to develop the model and what controls are in place moving forward are critical to successful partnerships between AI suppliers and customers.”
Gareth Stokes
Partner, Intellectual Property and Technology
Co-Lead, Global AI Practice Group
Birmingham, UK

Realizing the value of AI

Concluding reflections – how to realize the value of AI

Our research shows that a fragmented regulatory landscape and uncertainty over what good AI governance looks like are big challenges for organizations. But competitive pressures and speed of evolution mean that AI adoption can’t wait.

So what can you do to develop and deploy AI responsibly, safely and commercially, and to align commercial value with ethical values to achieve good AI governance? Below is a starting point for you to strengthen AI strategies.

Promote understanding of the mechanics and limitations of AI from the top down. What should everyone know about AI? What should company leaders know? What are the problems you are targeting with AI? Where is value generated?

Gain a full picture of internal and external AI risk. Where AI is being deployed and how? What contractual warranties and mitigations are in place? Have you provided sufficient guidance to people and customers about data handling?

Monitor and respond to the changing landscape. How is AI evolving? What innovations can you bring into your organization? What are the implications of new tech for your AI governance framework?

Consider how organizational values should inform AI. What does responsible AI governance mean to your organization? What ethical guardrails do you need to establish? 

Manage partnerships and contracts with key AI risks in mind. Have you done your due diligence? Have you considered novel tender processes? Do you have relevant contractual protections on data and IP? Are service levels proactively managed?

Establish skilled oversight of AI to avoid knee jerk bans. Do legal and compliance teams have the technical information they need to be enablers? Do you have streamlined decision-making processes in place? Who is accountable for AI oversight?

Collaborate on standards and best practices. Are you up to speed on future regulation and how it will apply to your uses of AI? What actions are industry peers taking? Can industry bodies better champion your concerns?

AI adoption by industry


How DLA Piper can help your organization with AI adoption and governance

We help clients to realize the potential of AI by aligning commercial value with ethical values. Our genuine leadership on AI law, deep knowledge of the science and technology of AI and extensive real world experience advising on landmark AI projects enables organizations to mitigate risk and realize value.

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