Uncharted territory: Navigating AI governance for better business performance
The rapid proliferation of artificial intelligence (AI) across business sectors has outpaced the development of robust governance frameworks, presenting both opportunities and significant challenges for organisations. According to our AI governance survey of 200 business leaders and corresponding report (the Report), whilst AI adoption is widespread, transforming customer support, sales, marketing, and productivity functions - many companies are deploying this technology without the necessary strategic oversight or regulatory alignment.
AI adoption outpaces governance
A central theme of the report is the disconnect between AI implementation and the maturity of governance structures. The Report reveals that 64% of companies report transformational or significantly positive impacts from AI, yet fewer than one in five have established a comprehensive AI governance framework. In addition, 61% have not fully implemented an internal AI usage policy, findings which highlight a significant gap between ambition and operational reality.
Our Report suggests that organisations are prioritising quick wins in their deployment of AI, such as efficiency gains in customer-facing roles as opposed to investing in the more complex work required to embed AI technologies within business areas which are subject to stricter regulatory scrutiny. Less than 20% of survey respondents indicated that they had fully implemented AI in core business functions such as legal and HR.
Regulation as a differentiator
The introduction of the EU AI Act (the Act) in 2024 has heightened the focus on regulatory compliance, especially among European firms (with 44% citing it as a top three risk, compared to 24% in the UK). The Act’s risk-based approach, with its phased rollout and varying obligations depending on the risk profile of AI applications, has prompted leading organisations to invest in regulatory training, AI-driven compliance tools, and proactive engagement with regulators.
The Report also highlights an emergence of ‘AI Leaders’ (those companies identified within our research as having combined advanced AI adoption with strong governance and compliance practices). Such companies are attuned to the potential risks of implementing AI, and are proactively seeking to mitigate such risks. For example, AI Leaders are nearly twice as likely as other businesses to regularly provide employees with regulatory training and awareness programmes.
In contrast, the majority of other businesses surveyed in the Report remain in the early stages of AI governance. Barriers such as limited resources, scalability challenges, and the difficulty of integrating governance into existing processes are frequently cited. Parallels are drawn with the early days of GDPR - warning that delaying investment in governance merely defers costs, and increases the risk of sanctions and reputational damage. The Report provides an opportunity for companies to benchmark their progress against AI Leaders, and take practical steps to prioritise areas in which they may be falling behind.
Bridging ambition and reality
AI Leaders, demonstrate that embedding governance into strategy does not hinder innovation - rather, it accelerates responsible adoption and builds organisational resilience. AI Leaders are more likely to have clear ethical principles, conduct due diligence on AI sourcing and training, and maintain dynamic frameworks that can adapt to evolving regulations and technologies.
As AI continues to reshape corporate governance, those organisations that prioritise governance and regulatory readiness will be best positioned to harness AI’s benefits while managing its risks.
