FAQs for AI Governance and ISO 42001

An AI Governance Framework is a structured set of policies, principles, and guidelines designed to ensure the ethical, transparent, and responsible development and deployment of AI technologies. It establishes oversight mechanisms to manage risks, align AI use with organisational goals, and comply with regulatory standards.

ISO/IEC 42001 is the international standard related to the governance of artificial intelligence (AI). Organisations worldwide, including in Australia, may voluntarily adopt the standard to demonstrate responsible AI governance.

If you have staff using Generative AI or have deployed some AI systems then you should already have some form of AI Governance in place. Enhancing its level of sophistication now can put you on the front foot for the regulation that is coming at Australian companies hard and fast. If you’re not using AI, but intend to, or are keen to get started on some AI projects then establishing a Governance framework is usually the first step since retrospectively applying rigour to already deployed AI can be surprisingly expensive and difficult.

While it’s generally beneficial to establish an AI Governance Framework early on, there are certain circumstances where it might make sense for an organisation to wait before implementing one. If the company has no specific plans to employ AI processes and hasn’t considered its AI strategy, it makes sense to delay AI governance until there is a clear direction. Governance frameworks work best when aligned with the broader organisational strategy, so waiting until the company has a clear understanding of how it plans to deploy AI can ensure that governance policies are relevant and targeted.

Considerations Before Delaying AI Governance:

Organisational Endorsement: Governance ensures a level of understanding and safe practices that can give Boards and Executive teams the confidence to begin seriously considering and budgeting for AI solutions.

Long-Term Scalability: Even if AI is in its early stages, a lack of governance could create problems as AI systems scale. Companies should plan to introduce governance if they expect AI to play a larger role in their operations.

Regulatory Trends: Companies should stay informed about regulatory trends in their sector. AI governance may become mandatory in the near future, so proactive planning can help avoid costly last-minute compliance efforts.

Ethical Implications: Even with low-risk AI, ethical concerns around data privacy, bias, and accountability may arise.

Companies around the world voluntarily comply with ISO standards because of the benefits these standards provide in terms of quality, safety, efficiency, and credibility.

ISO/IEC 42001 specifically may not be wholly applicable to your organisation and AI Consulting Group specialises in balancing AI governance with practical implementation that suits your organisation. In some cases that may be a framework that aligns with something like ISO, but is specifically designed for your industry and your requirements.

An AI Management System is a structured framework or platform designed to oversee, monitor, and control the development, deployment, and operation of AI technologies. It ensures that AI technologies are aligned with organisational goals, comply with regulations, and function ethically and efficiently.

ISO/IEC 42001 defines requirements and offers guidance for establishing, implementing, maintaining, and continually improving an AI management system within an organisation’s context.

Drive AI responsibly:

ensures ethical and responsible use of artificial intelligence

Reputation management:

enhances trust in AI applications

Stay ahead of regulation:

supports compliance with legal and regulatory standards

Practical guidance:

manages AI risks effectively and enhances operational efficiency

Identifying opportunities:

Encourages innovation within a structured framework

The number of AI-related ISO standards is continually growing as the field evolves and new challenges are identified, currently there are 86 different ISO AI-specific standards.

The standards range from foundational and technical, up to organisationally relevant for concepts such as AI risk management. ISO offers several standards to help manage AI risks and maximise benefits, including ISO/IEC 22989, which defines AI terminology and concepts; ISO/IEC 23053, which outlines a framework for AI systems using machine learning; and ISO/IEC 23894, which provides guidance on AI-related risk management.

ISO/IEC 42001, however, is a management system standard (MSS). Rather than focusing on specific AI applications, it offers a practical approach to managing AI-related risks and opportunities across the organisation, making it valuable for any business or entity

As of now, ISO 42001 is not mandated by any specific government, including Australia. However, Australia has shown an increasing interest in regulating artificial intelligence through its AI Ethics Framework and Guardrails, which align strongly with the evolving international standards like ISO 42001.

Implementing a framework that aligns with ISO 42001 demonstrates best practice, aligns an organisation with global frameworks and strengthens risk management and compliance, which is particularly critical in light of emerging AI laws and regulations in Australia.

ISO/IEC 23894 and ISO/IEC 42001 serve different but complementary purposes in the realm of AI governance and risk management. ISO 42001 is broader in scope than ISO 23894. ISO 42001 is a more holistic standard that provides requirements for setting up and maintaining a management system for AI in organisations. It deals with establishing AI governance frameworks that cover a broader range of activities beyond risk.