AI Rules the World… But Who Rules AI?

I think it’s safe to say that AI has hit the world stage by storm. The only difference is two years ago some leaders and organizations were hoping they could bury their head in the sand, and it would go away and now everyone realizes that it is here for the long haul. Governments and organizations worldwide are recognizing the need for stringent oversight, implementing policies to ensure AI development aligns with ethical, legal, and societal standards. To make it more personal, why does my organization need to govern AI?

Because hallucinating “employees” with zero accountability, no moral standard, and trained with often unknown and inherent biases are impacting critical employee behaviors and manipulating customers in ways you don’t currently understand.

As AI continues to evolve, proactive governance is essential to balance potential with accountability, fostering trust and ensuring AI serves humanity responsibly. We’ve all heard the horror stories of the “AI Team Member” at the drive-thru botchin’ it because it couldn’t accurately identify what the customer wanted. Last summer McDonalds actually suspended its partnership with IBM due to ordering mistakes.

I am speaking at “AI in Oil & Gas” Conference in Houston this week, on this very topic. There are countless reasons for effective governance but let’s look at 3 reasons when deciding a framework for AI governance.

1) Ethics

What we are trying to prevent is the “AI Team Member” putting your organization at risk because there is no oversight in the governance space. In my presentation at the upcoming conference, I highlight a bunch of “hallucinating employees” such as the one example where the driverless car pulls away from law enforcement.

The rise in organizational compliance and governance is driven by increasing legislation, risk, heightened stakeholder expectations, and these horror stories. I would hate to own or be in leadership of that driverless car service when that google review drops and media catches wind. Companies are integrating governance, risk, and compliance (GRC) frameworks to ensure strategic decision-making aligns with legal and ethical standards to help avoid these types of nightmares.

Additionally, as regulations become more complex, organizations that proactively adapt to these changes are better positioned to mitigate risks and maintain trust with investors and customers. As lenders went broke in the 2008 housing crisis, the remaining players in the game gobbled up more market share as others faded away, or had simply tarnished their brand credibility due to subprime lending practices that might have been legal but blurred the lines of ethics at best. Fast forward to 2025, I believe a lot of money and credibility will be won and lost in the AI space throughout the remainder of the decade and beyond. Let’s just say that you want to be on the winning side of this economic time period.

2) Regulation

The rapid evolution of AI has led to an unprecedented surge in AI governance legislation worldwide. Governments are racing to establish regulatory frameworks that address concerns such as algorithmic bias, transparency, and ethical AI deployment. In the United States alone, according to the AI legislation tracker at least 45 states and Puerto Rico have introduced over 550 AI-related bills in the 2025 legislative session. In 2022, it was two states! Some states, like Colorado, have passed comprehensive AI regulations focusing on consumer protections and high-risk AI systems.

Meanwhile, other jurisdictions are exploring AI-specific laws targeting areas such as rental pricing algorithms and deepfake disclosures. The previous administration (Biden) signed an executive order mandating a Chief AI Officer in each major head of state’s office. This exponential growth in legislation reflects the urgency policymakers feel in balancing AI innovation with responsible oversight. As a leader you have to use resources like the AI legislation tracker to keep up to speed on these regulations. Not being informed is putting yourself and your organization at major risk and I’d add, simply irresponsible.

3) Risk

The race for AI supremacy has also accelerated with aspects of Human resources being replaced by “AI Resources.” Without effective governance it could go from a resource to a risk, fast! By staying ahead in governance, organizations can mitigate risks, foster innovation, and position themselves as trusted leaders in the evolving AI landscape. Again, as stated earlier, you want to be a player that is drives market share to you based on trust, credibility, and profit. There is nothing wrong with being excellent is a space and succeeding, and those who get this right are certainly going to profit…. unbelievably!

AI governance plays a crucial role in safeguarding data privacy by establishing frameworks that ensure responsible data collection, processing, and usage. Remember when it comes to AI governance, I always start Data Governance. “Garbage In, Garbage Out.” When you plant corn, you know what you get, CORN! Your data governance will be a direct reflection of how effective your AI models will be. As AI systems rely on vast amounts of personal and sensitive information, strong governance mechanisms help mitigate risks such as unauthorized access, bias, and misuse.

Without proper governance, AI-driven decisions could lead to unintended privacy violations, eroding public trust and exposing businesses to legal and reputational consequences, therefore costing a lot!

Conclusion

What we have decided to do at Stephens Insight Group, is conduct a complementary AI governance survey to assess the current landscape of responsible AI practices and regulatory alignment. We are trying to gather valuable insights from participants on key governance challenges, ethical considerations, and compliance strategies within their industries. Once the evaluation is complete, we plan to analyze the results and share the findings with participants. We encourage you to click on the link and take the survey. We look forward to sharing our assessment with you.