Artificial intelligence (AI) is quickly becoming part of everyday business operations. Companies are using AI to improve efficiency, automate tasks, analyze information, and support decision-making.

While AI offers significant opportunities, it also creates new risks involving confidential information, cybersecurity, compliance, and accountability. An AI policy helps businesses establish responsible practices, protect sensitive information, and provide employees with clear guidance for using AI tools.

Three Key AI Risks Businesses Should Consider

Protecting Confidential Information

One of the greatest concerns with AI is protecting sensitive business and client information. Employees using public AI tools may unintentionally enter confidential information into third-party systems.

Potential risks include:

• Exposure of confidential business or client information
• Loss of trade secrets or proprietary data
• Improper handling of sensitive information
• Breaches of confidentiality obligations

For example, uploading client tax information, financial statements, payroll records, or other sensitive documents into an unapproved AI tool may create confidentiality concerns.

Best practice: Businesses should establish clear guidelines identifying what information may be entered into AI systems and what information must remain protected.

Managing Cybersecurity Risks

Like other technology tools, AI systems must be properly managed to reduce cybersecurity risks. Potential concerns include unauthorized access, improper permissions, and vulnerabilities in connected systems.

Businesses should consider:

• Which AI tools are approved for use
• Who has access to those tools
• What security safeguards are required
• How potential issues should be reported

A clear approval process helps ensure employees use AI tools appropriately and reduces unnecessary security risks.

Maintaining Accountability

AI can be a valuable resource, but it is not a replacement for professional judgment. AI-generated information may contain errors, incomplete information, or inaccurate conclusions.

Employees should understand that:

• AI supports decision-making but does not replace human review
• AI-generated information should be verified before use
• Employees remain responsible for their work and decisions

This is especially important when AI is used for financial, operational, or client-related matters.

What Should an AI Policy Include?

Every business’s AI policy should be tailored to its operations and risk level. However, effective policies generally address these areas:

Approved Uses and Tools

Businesses should identify:

• Which employees may use AI
• Approved AI programs
• Acceptable business uses
• Information that may not be entered into AI systems

Employee Training and Responsibilities

Employees should understand:

• How to use AI tools responsibly
• How to protect confidential information
• How to identify inaccurate AI-generated results
• When human review is required

Monitoring and Compliance

Businesses should periodically review AI use to ensure tools are being used securely and effectively.

AI-related laws and guidance continue to develop. Some states have introduced requirements involving privacy, automated decision-making, employment practices, and consumer disclosures. Businesses should monitor applicable requirements and update their policies as needed.

AI Policy Checklist

A practical AI policy should address:

☐ Approved AI tools
☐ Acceptable uses of AI
☐ Confidential information restrictions
☐ Employee responsibilities
☐ Security safeguards
☐ Review procedures
☐ Employee training
☐ Compliance with applicable regulations

Final Thoughts

AI can provide meaningful benefits to businesses, but responsible use requires clear policies and oversight.

Businesses that establish AI guidelines now will be better positioned to:

✔ Protect confidential information
✔ Reduce cybersecurity and compliance risks
✔ Support employees in using AI effectively
✔ Maintain client trust

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