Why Australian directors must develop AI readiness strategies amid growing governance challenges

Whether we like it or not, AI is here to stay — and boards have to get a handle on it.

Presented by Mercury IT

AI is fast becoming one of the most disruptive technologies since the invention of the steam engine.

Envision a competitor integrating generative artificial intelligence (genAI) into operations, decision-making and customer interactions. Within a year, they achieve double-digit cost reductions, enhanced productivity and increased market share. Meanwhile, your board is still either blissfully unaware or suffering decision paralysis on an AI strategy.

The State of AI in IT 2025 report reveals that 51 per cent of organisations identify governance and compliance as the primary barrier to AI adoption, rather than the technology itself.

Furthermore, 71 per cent of employees are experimenting with tools like ChatGPT at work, often without oversight, heightening risks.

The imperative is evident. GenAI is a governance challenge, a risk management exercise and a strategic opportunity. Without board oversight, “shadow AI” proliferates, risking data leakage, legal exposure and reputational harm.

A maturity model for AI adoption — spanning strategy, value, organisation, people and culture, governance, engineering and data — provides a roadmap. Initial stages involve defining vision, prioritising use cases and establishing policies.

Analysis includes external trends and pilot trials. Communication fosters adoption goals and internal partnerships.

Priority identification measures success and manages portfolios. Advanced activities refine strategies, monitor value and embed ethical governance.

Australian directors face compelling drivers

Regulatory momentum is accelerating with the Australian government’s AI Ethics Framework and impending mandates on privacy, security and ethics necessitating compliance — as emphasised in the AICD’s Directors’ Guide to AI Governance.

Workforce adoption is rampant and unregulated, with 71 per cent using unsanctioned tools, amplifying security vulnerabilities.

ROI correlates with trust. Organisations establishing robust frameworks report positive returns, but those without them face negatives.

Join Mercury IT for a free informational webinar — AI Readiness: A Boardroom Briefing — where Chief Information Security Officer Chris Haigh and General Manager and Head of Cybersecurity Martin O’Riordan host an exclusive session for Australian directors and executives. This briefing distils insights from Harvard Business Review, Gartner and the State of AI in IT 2025 report, delivering board-level strategies to:

• Define your AI risk appetite aligned with Australian regulations
• Build governance structures, leveraging AICD best practices
• Enhance staff literacy via training and guidelines to curb shadow AI
• Scale pilots into secure, value-driven initiatives.