A new report has revealed a worrying gap in AI governance, with 95% of businesses yet to implement frameworks to manage the risks associated with artificial intelligence. As firms increase their reliance on AI for everything from customer service to predictive analytics, the lack of formal oversight raises significant concerns about data security, bias, and long-term viability.
The study, commissioned by Prove AI and conducted by Zogby Analytics, surveyed over 600 executives—CEOs, CIOs, and CTOs—from major companies across the US, UK, and Germany. It found that 96% of organisations are already using AI in business operations, with the same proportion planning to boost their AI budgets over the next year.
AI Investments on the Rise
Firms are turning to AI to enhance productivity (82%), improve operational efficiency (73%), aid decision-making (65%), and reduce costs (60%). The most popular applications include customer service, predictive analytics, and marketing optimisation. However, as AI investments soar, so do the associated risks, with data integrity and security emerging as key concerns.
Executives reported several challenges in deploying AI effectively, including:
- Data quality issues, such as inconsistencies or inaccuracies (41%)
- Bias detection and mitigation difficulties, which can lead to unfair or discriminatory outcomes (37%)
- Challenges in measuring return on investment (ROI) for AI initiatives (28%)
Despite these concerns, 95% of respondents claimed confidence in their AI risk management practices. However, the report’s most striking finding is that only 5% of organisations have implemented an AI governance framework—an essential tool for mitigating risks and ensuring responsible AI deployment.
Governance: A Pressing Priority
With AI becoming central to business strategies, 82% of executives now see implementing AI governance as a high or extremely urgent priority, and 85% plan to have governance frameworks in place by mid-2025. The call for stronger oversight has also gained traction, with 82% of respondents supporting the idea of an AI governance executive order.
Mrinal Manohar, CEO of Prove AI, stressed the importance of a comprehensive approach: “The long-term success of AI investments hinges on robust governance strategies. Without clear guardrails, businesses risk losing the potential benefits of AI to unchecked risks and regulatory challenges.”
The Urgent Need for Regulation
With regulations such as the EU AI Act on the horizon, the pressure on firms to implement AI governance frameworks is mounting. The report highlights that, while AI offers vast potential, it comes with substantial risks. IP infringement and data security were major concerns for 65% of executives, further underscoring the need for governance.
As AI continues to revolutionise industries, the lack of structured governance could lead to significant setbacks. The report serves as a clear wake-up call: companies must prioritise AI governance if they want to harness the full power of AI while remaining compliant with emerging global regulations.
A Wake-Up Call for Businesses
As organisations forge ahead with AI innovations, the findings of this report suggest that AI governance cannot remain an afterthought. While many businesses are already benefitting from AI, responsible implementation through well-defined governance frameworks will be crucial for ensuring long-term success, trust, and compliance.
With the majority of firms yet to formalise their AI governance strategies, now is the time to act. The risks associated with AI—if left unmanaged—could not only harm individual businesses but also threaten the broader stability and integrity of the AI-driven economy.
Reference: https://www.artificialintelligence-news.com/news/ai-governance-gap-95-of-firms-havent-frameworks/
