AI Appreciation Day  The good, the bad, and the future

In collaboration with Hiscox, the IoD recently ran a survey of business leaders to gain more direct insight on how organisations are navigating the adoption, opportunities, challenges, strategy, and governance of AI tools.

The current landscape

Overall, it is clear that AI has permeated much of the business world, with 84% of respondents’ organisations already using AI technologies. However, while AI use in business is now clearly widespread, our findings suggest a concerning gap between AI use and the measures needed to manage its risks effectively – with only 29% of respondents reporting their organisations having a formal policy or governance framework in place to guide AI usage, and just 9% of respondents confident that their organisations have insurance to cover AI-related risks.

In other words, while businesses are moving quickly to embrace the opportunities AI presents, many are still catching up when it comes to managing the associated risks. As AI becomes more deeply embedded in decision-making, customer interactions and day-to-day operations, organisations will need to ensure that governance, oversight and risk management keep pace with adoption. The organisations best placed to realise AI’s long-term value are likely to be those that invest not only in the technology itself, but also in the policies, processes and controls needed to support its responsible use.

Digging deeper

Further gaps in preparedness emerge when comparing organisation size, with larger organisations investing more in AI in terms of adoption, governance, and placing AI as important to their overall strategy. For example, 89% of organisations with over 250 employees have AI usage policies in progress or in place, compared to only 58% of SMEs.

Another interesting divide is between the expected change in usage between those currently using AI and those not using it. For current users, only 2% don’t expect to increase their usage over the next 12 months, compared to 46% of organisations who do not yet use AI.

Despite adoption outpacing governance, respondents’ confidence in their organisation’s ability to adapt to regulation did not appear to deter planned increases in usage, with similar plans regardless of confidence level. However, optimism about the impact of AI on their organisation’s future success was strongly correlated with several other factors, such as current usage (91% of those optimistic are using AI, compared to 54% of those who are pessimistic), plans to increase usage (98% vs 64%), confidence in their leadership team’s understanding of AI (81% vs 23%), and having a formal policy in place (32% vs 8%).

What business leaders are worried about

When asked what their biggest question or concern was about the future of AI in business, two themes emerged repeatedly and were remarkably consistent – data security and keeping pace with change.

On protecting data, this concern is not incidental. Business leaders recognise that AI systems are only as secure as the data they ingest and process.

The speed of AI development also makes long-term planning difficult, with one respondent stating that “the rapid development of AI technologies, alongside emerging legislation, makes it challenging to establish stable policies, invest with confidence and ensure that staff are appropriately trained and supported.”

To contextualise this concern, we sought perspective from industry expert Dr Erin Young, who leads the IoD’s policy, strategy and thought leadership work on technology, science and innovation:

Closing the governance gap

The findings highlight organisations’ enthusiasm for AI. However, it also highlights a clear gap between adoption and preparedness, with many businesses moving faster on implementation than on governance and risk management.

As AI becomes more deeply embedded in everyday business operations, governance is likely to become more than a compliance exercise. Organisations that invest in clear policies, appropriate oversight and a better understanding of AI-related risks will be better placed to adopt the technology with confidence and respond when challenges arise.

This Thursday 16 July marks AI Appreciation Day, an opportunity to recognise not only the benefits AI can bring but also the importance of using it responsibly. The next stage of AI adoption will be shaped not simply by how quickly organisations embrace these technologies, but by how effectively they manage the risks that come with them.

Further reading and resources

• Information and Advisory Service (IAS):
  IoD members can access research and advice via:
  • The business information team who can provide document templates, including for AI policies.
  • The directors advice service that provides access to expert advisors, including those with expertise in cyber security and data protection.

• Professional Development:
  Check out the NCSC: Cyber Governance Training, a free 2-hour course for IoD members, to help boards and directors understand their cyber governance responsibilities and strengthen their ability to oversee organisational cyber resilience.

• Professional Benefits Programme:
  If you’re not sure whether your current business insurance provides sufficient cover, now could be a good time to review your policies. We work with specialist insurer, Hiscox, who offer a range of policies that may help protect your business.

• Resource Hubs:
  See our Science, Innovation, and Tech and our Data hubs for more resources and articles.

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