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How to Govern AI Use Across Your Company

By Freedom251 Team · · 7 min read

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Effective AI governance is an ongoing company process, not just a policy document. Assign executive accountability, decide which uses are acceptable, inventory AI systems and vendors, assess each use in context, apply safeguards proportionate to its risks, and monitor systems throughout their lifecycle. NIST’s voluntary AI Risk Management Framework organizes this work into Govern, Map, Measure, and Manage, with Govern informing the other three functions. NIST AI RMF Core

What does AI governance cover?

AI governance is the set of responsibilities, policies, decisions, and checks that guide how an organization selects, develops, deploys, monitors, and retires AI systems. It applies not only to models built in-house, but also to third-party software, data, tools, and services used by employees or embedded in company products.

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The aim is to make informed, accountable decisions about the benefits and potential harms of each use—not to assume every AI use is equally risky or that a framework can eliminate risk. NIST describes its AI RMF as a voluntary resource for managing AI risks and incorporating trustworthiness into AI design, development, use, and evaluation. NIST AI Risk Management Framework

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In practice, this means linking business goals to decisions about data, affected people, human involvement, testing, supplier dependencies, and what the organization will do if a system changes or fails.

Who should own AI governance?

Make one executive accountable for the organization’s AI risk decisions, while assigning day-to-day work across the functions that understand different parts of the risk. AI governance should not sit with IT alone: technical teams can assess system behavior and security, but they may not own privacy, employment, legal, procurement, or customer-impact decisions.

A cross-functional working group can coordinate decisions. Depending on the company and its uses, it may include legal, privacy or data protection, security, IT, risk, compliance, procurement, HR, business owners, and technical or product teams. A smaller organization may assign those responsibilities without creating a formal committee; the important point is that owners, decision rights, and escalation routes are clear.

  • Executive sponsor: sets direction, ensures resources are available, and owns escalated risk decisions.
  • Business or product owner: explains the purpose, intended users, affected people, expected benefits, and operational consequences.
  • Technical and security teams: document system components and integrations, evaluate relevant system behavior, and manage technical safeguards.
  • Legal, privacy, risk, and compliance teams: identify applicable obligations and advise on impacts and controls within their remit.
  • Procurement: brings supplier terms, data handling, support, and continuity into the review.
  • Employees and managers: follow the policy, complete role-appropriate training, and report incidents or unexpected outcomes.

ISO/IEC 38507:2022 is a separate governance reference for organizational governing bodies and other stakeholders; ISO says it applies to organizations of any size and to current and future AI uses. ISO/IEC 38507:2022

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How can a company put AI governance into operation?

Use a repeatable approval and oversight process. The sequence below turns governance principles into decisions and records that can be revisited when a use case, system, supplier, or operating context changes.

  1. Set the mandate and decision rights

    Name the accountable executive, define who reviews proposed uses, and establish how decisions and unresolved concerns are escalated. Match the formality of the process to the organization’s size and the potential impact of its AI uses. Ensure teams have the time and expertise needed to carry out assigned responsibilities.

  2. Write a usable policy

    Tell employees which purposes and tools are permitted, restricted, or prohibited, and how to request approval. Specify data-handling expectations, when human review is needed, any disclosure or recordkeeping rules that apply, how to report incidents, and what consequences follow policy violations. The policy should reflect the organization’s legal requirements, values, risk tolerance, and approach to transparent risk decisions. NIST AI RMF Core

  3. Build an AI inventory

    Give every known system or use case a record and an owner. Include the vendor and tool or model, business purpose, users and affected people, data, integrations, deployment status, internal risk category, approvals, and next review date. Include employee-facing tools and AI embedded in supplier products, not just systems formally launched by product teams. Maintain the inventory as systems and uses change; NIST calls for inventory mechanisms and resources aligned with risk priorities. NIST AI RMF Core

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  4. Map the use and its potential impacts

    Before approving a use, document what it is intended to do and how it could foreseeably be used. Identify the operating environment, users, affected parties, data, dependencies, expected benefits, possible harms, and important uncertainties. Use that context to decide whether AI is suitable at all, what safeguards are warranted, and what needs to be measured. NIST’s Map function is designed to establish use context and potential impacts before those decisions. NIST AI RMF Core

  5. Choose measures and safeguards that fit the case

    Set evaluation criteria before deployment and tie them to the use, likely impacts, organizational risk tolerance, and applicable requirements. Depending on the case, checks may cover task quality or accuracy, reliability, security, privacy, harmful bias or fairness, robustness, human oversight, and failure handling. No single checklist is appropriate for every system; document why selected checks are relevant and what result would block or limit deployment. NIST says risk-management activity and controls should reflect organizational priorities and risk tolerance. NIST AI RMF Core

  6. Review suppliers and dependencies

    For third-party tools and models, examine provider terms, data handling, security, model-change practices, incident notices, support, subcontractors, intellectual-property considerations, service continuity, and exit options. Decide how the company will respond if a supplier has a serious incident or a service becomes unavailable. NIST’s governance outcomes address risks from third-party software and data, including contingency planning for high-risk supplier failures. NIST AI RMF Core

  7. Approve, train, and record the decision

    Route the proposal to the appropriate decision-makers, record the rationale, conditions, safeguards, and review date, and ensure users understand their roles. Training should be appropriate to the person’s responsibilities—for example, system operators need to know when to intervene, while employees using approved tools need to understand the relevant data and reporting rules. Keep human responsibilities explicit rather than assuming a person is meaningfully overseeing a system simply because a person is present.

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How should governance continue after deployment?

Approval is not a permanent guarantee that a use remains acceptable. Monitor for relevant performance changes, incidents, supplier changes, and changes in how people use the system. Define who reviews those signals, who can pause or restrict use, and how decisions are documented. Reassess after material changes to the system, data, intended purpose, affected people, or operating environment, as well as on the organization’s planned review schedule.

Keep incident practices and contingency plans connected to the system’s risk and dependencies. If a use no longer meets its criteria or cannot be operated with acceptable safeguards, restrict or stop it and plan for safe decommissioning. NIST’s Govern outcomes include ongoing monitoring, periodic review, incident practices, human-AI role clarity, training, and decommissioning; it describes risk management as continuing throughout the AI system lifecycle. NIST AI RMF Core

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Which AI governance framework should a company use?

Choose a reference based on the job it needs to do. Board-level guidance, an operational risk framework, and a formal management-system approach are related but not interchangeable. Consider the company’s use cases, affected people, data, geographic and sector coverage, existing expertise, available resources, and desired assurance outcome.

Reference Purpose and scope Status and practical use
NIST AI Risk Management Framework Voluntary framework for managing AI risks and incorporating trustworthiness into AI design, development, use, and evaluation. Its functions are Govern, Map, Measure, and Manage. NIST released AI RMF 1.0 on January 26, 2023, and says it is being revised. It is not a substitute for applicable legal or contractual obligations. NIST AI RMF
NIST Generative AI Profile, NIST-AI-600-1 Identifies risks particular to generative AI and proposes risk-management actions organizations can align with their goals and priorities. NIST released it on July 26, 2024. Treat it as a profile to consult, not as a claim about the latest or final generative-AI guidance. NIST AI RMF Resources
ISO/IEC 38507:2022 Guidance for governing bodies in enabling and governing organizational AI use; ISO says it applies to organizations of any size and current and future AI uses. ISO lists it as a published international standard, edition 1, published in April 2022. It is governance guidance, not proof by itself of legal compliance or a particular certification. ISO catalog entry
ISO/IEC 42001 An AI management-system reference that organizations may investigate when considering a formal management-system approach. NIST’s resources page lists a crosswalk between ISO/IEC 42001 and the AI RMF. The material cited here does not establish certification requirements, costs, or which organizations should pursue certification. NIST AI RMF Resources

NIST says its AI RMF and playbook are voluntary and that the playbook can be adapted to organizational needs. A framework can help structure decisions, but adopting one does not establish that a company has met every law, contract, or regulator expectation. NIST AI RMF FAQ

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What should leaders treat as non-negotiable?

  • There is an accountable executive and a named owner for each AI use.
  • The organization knows what AI systems and tools are in use, including relevant third-party dependencies.
  • Approval considers the specific context and potential impacts, rather than relying on a generic label or checklist.
  • Controls, human roles, and evaluation criteria are chosen for the use and its risks.
  • Staff know the rules, can raise concerns, and understand how incidents are handled.
  • Systems are monitored and reviewed, and the company can change, suspend, or retire them when needed.

Legal obligations depend on jurisdiction, sector, and deployment details. A company should check the requirements that apply to its locations, activities, data, and affected people rather than treating voluntary framework alignment as legal clearance.

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AI governanceArtificial Intelligencebusiness technologyNIST AI RMFrisk management

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