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.
Author
Alex Kirkhope
Sarah Reynolds
Alex Kirkhope
Sarah Reynolds
Sarah is a Partner in Shoosmiths' IT & Technology team advising on all aspects of IT transactions, non-contentious IP, data laws, and commercial contracts. With a particular focus on sustainable and emerging technologies (and the convergence of the two), including AI and robotics, blockchain, the metaverse and web3, Sarah co-leads our AI Advisory practice and is passionate about partnering with clients to scale-up AI and other bleeding-edge technologies responsibly.
Sarah advises clients across a range of sectors on the sourcing, deployment and commercialisation of technologies and data as part of their digital and AI transformation strategies. She works with multinational organisations to design and implement AI governance frameworks and operationalise emerging laws and regulations. Her practice is deeply rooted in IT, focusing on the digital and sustainable transformation of sectors such as Advanced Manufacturing, Automotive and Mobility; Connected and Autonomous Vehicles and Telematics; TMT; 3PL; and Energy.
Sarah has supported clients with the procurement, development and implementation of connected technology solutions, including the deployment of new business models to monetise the data generated by AI systems in IoT environments. As well as advising on the data compliance aspects of innovative technologies, she also leads strategic IP transactions focused on complex technology development and licensing, collaborations, acquisitions and divestitures. In the metaverse gaming and sports sectors, she has led matters pertaining to image rights agreements and structures, and the terms and conditions underpinning smart contracts for the primary and secondary sale of NFTs.
Sarah has worked with policymakers to help define our pro-innovation approach to AI regulation in the UK, including advising the Government on proposed amendments to IP laws in the context of text and data mining for training AI algorithms. As an Advisory Board Member of the All-Party Parliamentary Group on AI, Sarah has also participated in regular evidence-giving sessions at the Houses of Parliament to discuss how the purposeful and responsible use of AI can drive positive change across the digital marketplace.
Sarah has led and facilitated the end-to-end delivery of net zero carbon projects (including EV charge point infrastructure rollouts) and zero waste technology solutions. She has also helped FTSE 100, Financial Services, and Technology clients to protect valuable data and IP assets, manage liability and third-party risk, and secure returns on investment when integrating robotics or AI into complex multi-vendor supply-chains, including outsourcing and managed services arrangements.
Sarah is recognised for providing tailored and pragmatic business solutions to her clients and her experience working both in-house and in private practice, as well as across different business areas and in multi-disciplinary environments, has fostered a profound appreciation for the multi-faceted risks that clients face, and an ability to quickly identify market trends and realise commercial opportunities.
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Kir Nuthi
Kir Nuthi
Kir Nuthi is the Head of AI and Data at techUK.
She holds over seven years of Government Affairs and Tech Policy experience in the US and UK. Kir previously headed up the regulatory portfolio at a UK advocacy group for tech startups and held various public affairs in US tech policy. All involved policy research and campaigns on competition, artificial intelligence, access to data, and pro-innovation regulation.
Kir has an MSc in International Public Policy from University College London and a BA in both Political Science (International Relations) and Economics from the University of California San Diego.
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Usman Ikhlaq
Usman Ikhlaq
Usman joined techUK in January 2024 as Programme Manager for Artificial Intelligence.
He leads techUK’s AI Adoption programme, supporting members of all sizes and sectors in adopting AI at scale. His work involves identifying barriers to adoption, exploring solutions, and helping to unlock AI’s transformative potential, particularly its benefits for people, the economy, society, and the planet. He is also committed to advancing the UK’s AI sector and ensuring the UK remains a global leader in AI by working closely with techUK members, the UK Government, regulators, and devolved and local authorities.
Since joining techUK, Usman has delivered a regular drumbeat of activity to engage members and advance techUK's AI programme. This has included two campaign weeks, the creation of the AI Adoption Hub (now the AI Hub), the AI Leader's Event Series, the Putting AI into Action webinar series and the Industrial AI sprint campaign.
Before joining techUK, Usman worked as a policy, regulatory and government/public affairs professional in the advertising sector. He has also worked in sales, marketing, and FinTech.
Usman holds an MSc from the London School of Economics and Political Science (LSE), a GDL and LLB from BPP Law School, and a BA from Queen Mary University of London.
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Sue Daley OBE
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In 2025, Sue was honoured with an Order of the British Empire (OBE) for services to the Technology Industry in the New Year Honours List.
She has been recognised as one of the most influential people in UK tech by Computer Weekly's UKtech50 Longlist and in 2021 was inducted into the Computer Weekly Most Influential Women in UK Tech Hall of Fame.
A key influencer in driving forward the data agenda in the UK, Sue was co-chair of the UK government's National Data Strategy Forum until July 2024. As well as being recognised in the UK's Big Data 100 and the Global Top 100 Data Visionaries for 2020 Sue has also been shortlisted for the Milton Keynes Women Leaders Awards and was a judge for the Loebner Prize in AI. In addition to being a regular industry speaker on issues including AI ethics, data protection and cyber security, Sue was recently a judge for the UK Tech 50 and is a regular judge of the annual UK Cloud Awards.
Prior to joining techUK in January 2015 Sue was responsible for Symantec's Government Relations in the UK and Ireland. She has spoken at events including the UK-China Internet Forum in Beijing, UN IGF and European RSA on issues ranging from data usage and privacy, cloud computing and online child safety. Before joining Symantec, Sue was senior policy advisor at the Confederation of British Industry (CBI). Sue has an BA degree on History and American Studies from Leeds University and a Masters Degree on International Relations and Diplomacy from the University of Birmingham. Sue is a keen sportswoman and in 2016 achieved a lifelong ambition to swim the English Channel.
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