Using AI in your business
AI is creating unprecedented changes in the way the commercial world operates. With these changes come new opportunities but also new and very diverse risks. A number of existing controls in the current regulatory regime help control these risks. Boards, directors, and managers need to be aware of their obligations regarding AI as they stand today and keep up with new regulatory measures that are sure to be enacted in this space.
Risks for your business
The use of AI presents huge possibilities; however, it creates significant risks for individuals, organisations, and society. Risks arise from both AI use and a lack of AI adoption and investment. To understand the risks of AI, directors must first understand how AI could assist their organisation and then determine to what extent AI is already being used in their business. This is not always an easy task. AI systems may be used directly within the business, for example, to assist with front-end customer queries, or indirectly, for example, by employees using generative AI, such as Chat GPT, to help them with work tasks. The risks AI creates depend on how and why it is used in your organisation and will change according to each organisation and how AI evolves.
Governing AI in your business
Organisations must take a structured approach to AI governance from the outset. Research suggests that existing IT risk management frameworks and systems are generally unsuitable for AI governance. Standard frameworks normally involve point-in-time risk assessments of sanctioned, stable technologies. Compare this with AI, which is rapidly advancing in an uncertain regulatory environment, and it is clear that a completely different approach is needed.
Director’s Duties
Directors are ultimately responsible for overseeing risk management throughout the organisation. This includes risk arising from AI. Laws that directly deal with AI have not yet been introduced in Australia. However, relevant legal obligations exist in the areas of privacy, consumer protection, intellectual property, cyber security, anti-discrimination, and work, health, and safety. Other jurisdictions are starting to implement AI-specific regulations, and we expect Australia to follow suit soon.
What you should do next
AI is here to stay, and corporations need to ensure that they maximise the value that AI can bring to their business whilst also managing the risks of AI carefully and diligently. A different approach is required to AI governance which can flex, expand and change to mirror AI opportunities.
How Flint can help
The Flint team can help you understand your existing duties and keep abreast of new regulations as and when they are introduced. We can also work with you to update your governance systems and develop a framework for effectively balancing AI’s risks and opportunities.
Contact
Julian Phillips jphillips@flint-lawyers.com.au
Melissa Hii MHii@flint-lawyers.com.au
Gillian Keegan gkeegan@flint-lawyers.com.au