Artificial intelligence has advanced from experimental projects on the fringes of business to focal points of board-level strategy in record time. From automating fraud detection to reshaping customer service, executives are placing bold bets on AI to streamline costs and unlock new sources of growth. Yet, as a team of AI governance experts outline, amid the excitement, there is an uncomfortable truth: without clear evidence of robust AI strategies, trust is not keeping pace with adoption.
Consumers, employees, regulators and investors are now asking the same pressing question: can businesses harness the benefits of AI without sacrificing fairness, privacy and accountability? With AI adoption accelerating, Impact Assessments are becoming an essential governance tool for leadership teams.
The Missing Piece in AI Strategy
Conversations about AI tend to dwell on speed, efficiency and innovation. While these are indeed the most promising elements of artificial intelligence, history tells us that technology rollouts that ignore risk often end in public backlash. We’ve already seen this within AI; recruitment tools trained on biased data have disadvantaged women and minority candidates, “black box” credit scoring systems have drawn regulatory scrutiny, and customer chatbots have made headlines for generating harmful or misleading responses.
The problem in each case is not simply operational disruption. It is the erosion of trust – from customers, employees, regulators and markets. Once that confidence is lost, reputations falter and competitive advantage evaporates. For boards, this makes trust not a soft issue, but a hard business risk.
What an AI Impact Assessment Really Does
At its core, an AI Impact Assessment (AIIA) is a strategic safeguard. Where traditional Data Protection Impact Assessments (DPIAs) focus narrowly on privacy risks under GDPR, an AIIA widens the lens to include bias, discrimination, transparency, security, accountability and potential harm to individuals or groups.
Put simply, it asks a bigger question: can this AI system deliver value without exposing the organisation to unacceptable ethical, legal or reputational risks? Seen this way, an AIIA is not a bureaucratic hurdle, but a “risk radar” – one that helps leaders see around corners, anticipate challenges, and prevent tomorrow’s crises from becoming today’s headlines.
Why It Belongs in the Boardroom
For executives, the value of an AIIA lies in its ability to translate abstract concerns about AI into concrete governance advantages. It demonstrates resilience in the face of evolving regulation, from the EU AI Act – which now requires formal impact assessments for high-risk systems – to UK guidance from the Information Commissioner’s Office encouraging organisations to build AI-specific checks into their risk processes.
Beyond compliance, AIIAs create a record of accountability that reassures investors and boards. They show that decisions have been made thoughtfully, risks weighed, and safeguards put in place. For customers and employees, they offer something just as valuable: reassurance that AI is being deployed fairly, safely and transparently.
A Pragmatic Approach
An AIIA does not need to overwhelm an executive agenda. The most effective assessments are straightforward, asking leaders to clarify what the AI does, understand the data it relies on, identify risks such as bias or loss of oversight, and agree on practical mitigations. Crucially, they are not one-off exercises. As AI systems evolve, are retrained or repurposed, the risks they present shift in tandem. Continuous review becomes as important as the first assessment itself.
From Optional to Expected
Even where AI Impact Assessments are not yet mandatory, the momentum is unmistakable. Just as disclosing a company’s performance on environmental, social and governance factors (ESG reporting) alongside its financials, AI governance is moving in a similar direction. Regulators, investors and employees are beginning to expect evidence of responsible AI, and organisations that cannot provide it will increasingly find themselves on the defensive.
The competitive edge belongs to those who move first. By embedding AIIAs into strategy today, businesses position themselves not only to avoid crises but to stand out as trusted innovators in a crowded market. In a landscape where technology races ahead of trust, that distinction may prove decisive.
