The rapid acceleration of AI, particularly generative AI, has transformed the digital landscape.
Critical business functions like procurement, finance, and legal have since embraced AI to address financial challenges, improve efficiency, and create greater value within the enterprise. Notably, 44 percent of Chief Procurement Officers have led AI adoption efforts in the past 12 months, while 85 percent of legal teams are expected to utilize generative AI by 2026. However, as industries and businesses increasingly adopt AI technologies, the speed of this adoption has raised concerns about the unchecked use of AI.
The EU’s AI Act, the first-of-its-kind legislation, took effect in August, introducing regulations that have initiated the clock for compliance for all businesses operating within Europe. The AI Act, which states fines of up to 7% of a company’s annual turnover – or a maximum of £29 million – for noncompliance has raised concerns among business leaders, prompting some to question whether the risks of operating within the EU might outweigh the potential benefits.
Despite these concerns, the AI Act is now a reality, and businesses must navigate this complex regulatory environment. For Chief Strategy Officers (CSOs), helping their organizations to understand and adapt to AI regulation is essential. CSOs can play a key role in guiding their organizations to turn compliance into strategy by following these four key tips.
- Turn compliance into a strategic asset
In today’s market, showcasing responsible AI policies is table stakes. By embracing compliance and openly sharing AI policies, companies not only adhere to legal and ethical standards but also build trust with customers, partners, investors, and the public. Transparent AI policies signal a commitment to responsible practices, enhancing the company’s reputation and positioning it as a leader in ethical AI use. CSOs can help ensure these AI policies are proactively embedded into the business operations, influencing decision-making processes, product development, and customer engagement.
- Integrate AI governance into your business
Establish effective governance frameworks that align with the AI Act’s requirements. This framework should include clear policies on data usage, transparency, accountability and ethical AI practices, as well as implementing AI-driven technologies, to help manage risks. Additionally, developing a governance structure that includes roles and responsibilities for AI oversight, and working with operational leaders to embed governance practices into day-to-day business operations can support the company’s long-term success and ethical reputation.
- Invest in AI infrastructure
Leading an organization in investing in advanced AI technologies and platforms that support compliance and operational efficiency is key. This includes robust data management and compliance monitoring tools. For instance, contract intelligence is crucial for organizations lacking a centralized, digitized repository for contracts, which can make the integration of AI governance challenging. Without the ability to analyze, manage, and extract insights from contracts, organizations will struggle to gain visibility and establish a single source of truth, ultimately hindering the ability to demonstrate compliance. CSOs can drive this initiative by collaborating with IT leaders to ensure the infrastructure not only meets current compliance needs but also aligns with the broader strategic goals.
- Collaborate with partners
Companies that form strategic partnerships are better positioned to stay competitive in the market, helping them navigate regulations like the AI Act. By combining the unique strengths of each partner, business leaders can develop more robust and scalable solutions that are better equipped to handle the nuances of regulations.
For instance, partnerships that focus on co-innovation and the integration of advanced technologies can empower businesses to manage risk and ensure compliance across their operations. CSOs can help lead efforts in identifying and engaging with partners that align with the company’s strategic goals and regulatory needs. This includes evaluating partners based on shared objectives, technology capabilities, market position, and commitment to compliance.
Looking Ahead
The EU AI Act marks a significant shift in the regulatory landscape, challenging businesses to rethink how they develop and deploy AI technologies. For Chief Strategy Officers, this presents both a challenge and an opportunity. By embracing compliance as a competitive advantage, integrating robust AI governance into business strategy, investing in the right infrastructure, and fostering strategic partnerships, CSOs can help their organization not only navigate these new regulations but also position their companies for long-term success.
As AI continues to evolve, so too will the regulatory frameworks that surround it. Businesses operating globally should stay agile and proactive, anticipating that similar regulations may emerge in other regions. By planning and adopting a forward-looking approach, organizations can ensure they remain compliant, innovative, and at the forefront of the AI revolution.
About the Author
Deanna Lanier is Chief Strategy Officer at Icertis. Icertis is the global leader in AI-powered contract intelligence. The Icertis platform revolutionizes contract management, equipping customers with powerful insights and automation to grow revenue, control costs, mitigate risk, and ensure compliance – the pillars of business success. Today, 30% of the Fortune 100 trust Icertis to realize the full intent of millions of commercial agreements in 90+ countries.
