Intermediate

AI Governance Policies

Learn how to create comprehensive AI policies that translate governance principles into actionable guidelines, covering acceptable use, risk classification, and compliance requirements.

The AI Policy Framework

A comprehensive AI policy framework consists of multiple interconnected documents that address different aspects of AI governance:

  1. AI Principles Statement

    A high-level declaration of organizational values and commitments regarding AI. This document is typically public-facing and sets the tone for all other policies.

  2. AI Acceptable Use Policy

    Defines what AI can and cannot be used for within the organization, covering approved tools, prohibited use cases, and data handling requirements.

  3. AI Risk Classification Policy

    Establishes a risk tiering system (e.g., low, medium, high, critical) with corresponding governance requirements for each level.

  4. AI Development Standards

    Technical standards for model development, testing, documentation, and deployment that all teams must follow.

  5. AI Vendor Management Policy

    Requirements for evaluating, onboarding, and monitoring third-party AI tools and services.

Risk Classification Framework

Align your risk classification with the EU AI Act tiers while adapting to your organization's context:

Risk Level Criteria Governance Requirements
Minimal No impact on individuals; internal productivity tools Self-assessment, basic documentation
Limited Customer-facing but no critical decisions Transparency notice, bias testing, model card
High Affects rights, safety, or significant decisions Full impact assessment, ethics review, monitoring
Unacceptable Manipulative, exploitative, or mass surveillance Prohibited - do not develop or deploy
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Template Tip: Start with a simple policy document and iterate. A two-page acceptable use policy that people actually read is more effective than a fifty-page document that sits on a shelf.

Policy Template Components

Every AI policy document should include these standard sections:

Purpose & Scope

Why the policy exists and who it applies to. Define boundaries clearly so there is no ambiguity about coverage.

Definitions

Define key terms like "AI system," "model owner," "high-risk," and "personal data" to ensure consistent interpretation.

Requirements

Specific, actionable requirements written as "must," "should," and "may" statements with clear compliance criteria.

Roles & Enforcement

Who enforces the policy, how violations are handled, and what escalation paths exist for exceptions.

Acceptable Use Policy Essentials

Your AI acceptable use policy should clearly address these areas:

  • Approved AI tools: Which third-party AI services employees may use (e.g., approved LLM providers, coding assistants)
  • Data restrictions: What data may and may not be shared with AI systems (PII, trade secrets, customer data)
  • Output verification: Requirements for human review of AI-generated content before external use
  • Intellectual property: Rules around AI-generated code, content, and inventions
  • Prohibited uses: Explicit list of banned applications (e.g., autonomous hiring decisions, social scoring)
  • Incident reporting: How to report AI failures, unexpected behaviors, or policy violations
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Looking Ahead: In the next lesson, we will explore how to establish an AI Ethics Board that provides expert guidance on the most challenging governance decisions.

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