{"id":125559,"date":"2026-07-31T09:44:07","date_gmt":"2026-07-31T09:44:07","guid":{"rendered":"https:\/\/www.europesays.com\/ai\/125559\/"},"modified":"2026-07-31T09:44:07","modified_gmt":"2026-07-31T09:44:07","slug":"strong-governance-critical-for-businesses-adopting-ai-tools","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ai\/125559\/","title":{"rendered":"Strong governance critical for businesses adopting AI tools"},"content":{"rendered":"

\"TroyTroy Lieberman, counsel at Nixon Peabody. (Bridgetower Media newswire)<\/p>\n

Today, nearly all companies are investing in artificial intelligence<\/a>, but only 1% consider themselves mature in how they have implemented and governed the technology, according to a 2025 McKinsey report. As organizations race to adopt AI, attorneys say clear policies, employee training and human oversight are becoming just as important as the technology itself.\n<\/p>\n

\u201cPerhaps the biggest challenge for companies adopting AI is implementing guardrails at the same pace businesses are scaling their AI tools,\u201d said Troy Lieberman, counsel at Nixon Peabody. \u201cAI can accelerate business processes, improve productivity and help employees work more efficiently, but it also raises questions about privacy, accuracy, bias, intellectual property and accountability.\u201d\n<\/p>\n

Lieberman said organizations should view AI as a business tool that requires thoughtful governance rather than simply another software application. That starts with establishing clear policies around which AI platforms employees may use, what information can be entered into those systems and when human review is required.<\/p>\n

\"KatarinaKatarina (Kate) B. Polozie, CIPP\/US, AIGP, partner at Woods Oviatt Gilman. (Bridgetower media newswire)<\/p>\n

\u201cWithout clear guidelines, employees may inadvertently expose confidential information, rely on inaccurate AI-generated content or use AI in ways that create legal or regulatory issues,\u201d he said. \u201cThey may also unknowingly enter valuable proprietary information or trade secrets<\/a> into AI tools.\u201d\n<\/p>\n

Those risks extend beyond employee mistakes. Katarina (Kate) B. Polozie, CIPP\/US, AIGP, partner at Woods Oviatt Gilman, said companies should never assume information entered into an AI platform will remain confidential. Depending on a provider\u2019s terms of use, prompts may be retained or used to train future AI models, creating potential risks for trade secrets, proprietary business information and even attorney-client privilege.\n<\/p>\n

\u201cFeeding trade secrets like customer lists, proprietary code, pricing, or strategy into a public tool can undermine trade-secret protection, which depends on a business taking reasonable steps to keep that information secret,\u201d she said. \u201cUnfortunately, once the information is put into an AI tool, there is often no practical way to claw it back.\u201d<\/p>\n

Polozie pointed to the recent federal case United States v. Heppner, in which a court held that a user waived attorney-client privilege by entering privileged information into a public generative AI platform because sharing it with the platform constituted disclosure to a third party.\n<\/p>\n

\u201cThe provider\u2019s privacy policy (which allowed it to collect inputs, train on them and disclose them) meant the user had no reasonable expectation of confidentiality,\u201d Polozie said. \u201cOf course, while every instance is fact specific, the same logic threatens any confidential, trade secret or privileged material an employee pastes into a public tool.\u201d\n<\/p>\n

Even with strong safeguards in place, attorneys say AI should support decision-making rather than replace it. Businesses remain responsible for how the technology is used and for the decisions made based on its output.
\n\"TimTim Plunkett, AIGP, senior counsel at Harris Beach Murtha and a member of the firm\u2019s Artificial Intelligence Industry Team. (Bridgetower Media newswire)\n<\/p>\n

\u201cBusinesses should remember that using AI does not often shift legal responsibility to the technology provider,\u201d Lieberman said. \u201cThe business generally remains responsible for how AI is used and the decisions made based on its output.\u201d If an AI tool improperly screens out a job applicant, denies a loan for discriminatory reasons or mishandles personal information, he said, blaming the technology is not a legal defense.\n<\/p>\n

That responsibility becomes even more important as AI is used in areas with significant legal and ethical implications. Lieberman said organizations should exercise particular caution when AI is involved in employment decisions, lending or patient care, where concerns about fairness, bias and transparency continue to draw increased regulatory attention.\n<\/p>\n

Tim Plunkett, AIGP, senior counsel at Harris Beach Murtha and a member of the firm\u2019s Artificial Intelligence Industry Team, said AI\u2019s speed makes strong governance essential.\n<\/p>\n

\u201cAI can do so much so fast, but it can also do a lot of really bad things really fast, too,\u201d he said. \u201cIt\u2019s a force multiplier for your workforce.\u201d\n<\/p>\n

While AI can help organizations scale and improve efficiency, Plunkett said businesses should understand that using new tools is only part of the equation.\n<\/p>\n

\u201cNo matter how fast the market\u2019s making tools, you\u2019ve got to have really good people to use them,\u201d he said, emphasizing that employee training and building AI literacy across an organization are just as important as the technology itself.\n<\/p>\n

Attorneys say companies don\u2019t need to wait for new laws before strengthening their AI governance practices.\n<\/p>\n

\u201cGovernance should not be a one-time project,\u201d Lieberman said, noting that organizations should regularly revisit their policies, approved AI platforms and employee training as both the technology and legal landscape continue to evolve.\n<\/p>\n

Polozie also recommends conducting careful due diligence prior to adopting AI products or services.\n<\/p>\n

\u201cBefore allowing any employee to use a tool, read the terms and do your due diligence,\u201d she said, recommending that companies negotiate contractual protections whenever possible and ensure vendors maintain appropriate confidentiality, security and data-retention practices.\n<\/p>\n

Plunkett said organizations should first inventory the AI tools already being used across the company before developing governance policies around them. He also recommends regularly revisiting those policies as AI technology and regulations continue to evolve.\n<\/p>\n

For Plunkett, effective governance ultimately separates organizations that simply adopt AI from those that use it successfully over the long term.\n<\/p>\n

\u201cThe companies that I think that\u2019ll succeed with AI won\u2019t be the ones that adopt it the fastest,\u201d Plunkett said. \u201cIt\u2019ll be the ones that govern it the best.\u201d\n<\/p>\n

Caurie Putnam is a freelance writer for BridgeTower Media.<\/p>\n","protected":false},"excerpt":{"rendered":"Troy Lieberman, counsel at Nixon Peabody. (Bridgetower Media newswire) Today, nearly all companies are investing in artificial intelligence,…\n","protected":false},"author":2,"featured_media":125560,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[24,25,54093,3919],"class_list":["post-125559","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ai","tag-ai","tag-artificial-intelligence","tag-business-and-corporate-law","tag-trade-secrets"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/125559","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=125559"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/125559\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/125560"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=125559"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=125559"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=125559"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}