An AI governance framework is the set of policies, processes, and controls that ensure your organisation's AI use is ethical, compliant, commercially appropriate, and well-managed. Without it, AI use in your business is ad hoc — staff using whatever tools they like, with whatever data they have, without clear accountability. This creates legal risk, reputational risk, and operational risk that most Australian businesses significantly underestimate.
A practical AI governance framework for a mid-sized Australian business has six components. First, an AI use policy — a written policy that defines which AI tools are approved for use, what data can be processed with each, and who is responsible for approvals. Second, acceptable use guidelines — clear guidance for staff on what is and isn't appropriate: specific examples of acceptable use, examples of prohibited use (such as feeding client confidential data into consumer AI tools), and escalation procedures. Third, a vendor due diligence process — a standard checklist for evaluating AI vendors including data processing terms, security certifications, privacy policy compliance, and offshore processing disclosure. Fourth, an AI risk assessment template — a structured process for assessing each new AI initiative against the Australian AI Ethics Framework principles before deployment. Fifth, training requirements — mandatory AI literacy training for all staff, and more detailed training for staff with significant AI responsibilities. Sixth, an incident response procedure — a clear process for reporting and responding to AI-related incidents including data breaches, model failures, or bias complaints.
Cornerstone AI Partners can help Australian businesses build and implement this framework — including a starter policy pack covering the most common requirements. We also offer a free AI Governance Starter Pack download for businesses at the beginning of this journey. Book a discovery call to access it and discuss your specific governance requirements.
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