AI Policy
Quick Answer
An AI policy is an internal document that sets out how employees and vendors may — and may not — use AI within an organisation. A strong policy covers approved tools, prohibited use cases, data handling, intellectual property, disclosure, and responsibilities.
In Depth
What AI Policy really means
Good AI policies are short, concrete and written for the audience that will actually read them. They are reviewed quarterly, because approved tools, applicable law and model capabilities change quickly. They are paired with training, not just circulated once.
A useful policy distinguishes between low-risk uses (drafting internal emails) and high-risk uses (handling personal data, producing client-facing legal content) and prescribes appropriate controls for each.
Why It Matters
Business relevance for UK organisations
UK SMEs without an AI policy are exposed to shadow AI usage, data leakage and inconsistent customer communications. Putting even a simple policy in place dramatically reduces this risk.
Real-world example
How this shows up in practice
A Leeds accountancy practice rolled out a 3-page AI policy plus 30-minute training, eliminating unauthorised use of consumer AI tools on client data within one quarter.
Related Terms
Continue exploring
AI Governance
AI governance is the set of policies, roles, controls and oversight mechanisms that ensure AI is used responsibly, safely and in line with law and organisational values. Effective governance is proportionate — tight where risk is high, light where risk is low.
BusinessAI Ethics
AI ethics is the discipline of ensuring AI systems are designed, deployed and monitored in ways that respect fairness, transparency, privacy, human autonomy and wider societal impact. It goes beyond legal minimums to reflect organisational values.
BusinessAI Readiness
AI readiness is an organisation's current capability to adopt AI successfully. It covers data quality, infrastructure, skills, processes, leadership alignment and governance. Low readiness is the most common cause of disappointing AI outcomes.