Legal-status note: Company-law and sector-specific duties can be binding where they apply. Government AI guidance and industry frameworks are generally non-binding. Following a framework may support governance, but it does not guarantee that legal duties have been discharged.
What leadership should be able to see
| Oversight area | Useful evidence | Warning sign |
|---|---|---|
| Portfolio | Current register of AI systems, owners, purposes, suppliers and risk tiers | Leadership only knows about flagship projects |
| Value | Measured benefit against a baseline and non-AI alternative | Success is described only through anecdotes or vendor claims |
| People | Consultation, accessibility, subgroup testing, complaints and remediation | Efficiency is measured but worker or customer impact is not |
| Control effectiveness | Testing results, override use, exceptions, access reviews and supplier assurance | Policies exist but operating evidence does not |
| Incidents and change | Near misses, material changes, containment decisions and lessons | Only cyber incidents reach leadership |
| Exit readiness | Fallback, data return/deletion, portability and decommission plan | No practical way to pause or leave the supplier |
Questions for a board or executive paper
- What problem is being solved, and what evidence supports the expected benefit?
- Who is accountable for the decision, system performance and affected people?
- Which laws, licences, contracts, awards, agreements and policies may apply?
- What personal, confidential or commercially sensitive information is involved?
- What could fail, who could be harmed and how severe or reversible could the effect be?
- How were workers, customers or other affected stakeholders consulted?
- What testing was done before approval, including accessibility and subgroup outcomes?
- Can human reviewers understand the evidence, disagree and stop the process?
- What metrics, thresholds and incidents will be reported, and how often?
- What triggers reassessment, suspension, notification or decommissioning?
Separate assurance from optimism
Management attestation
Require a named internal owner to state the approved purpose, risk tier, controls, residual risk and unresolved issues.
Independent challenge
For higher-impact uses, arrange review by people independent of delivery and with the right legal, privacy, safety, security or domain expertise.
Decision record
Record why the use was approved, conditions imposed, evidence considered and when the decision will be revisited.
ASIC states that directors should understand what the company is doing and identifies risk oversight as a core responsibility. ASIC's AI report is particularly relevant to regulated financial-services and credit entities; it should not be presented as a universal rulebook for every organisation.
Sources and currency
Jurisdiction: Australia. Currency: Sources checked 27 October 2026. Legislation and workplace instruments are binding only where they apply. Regulator and government material is guidance unless stated otherwise. Standards and recommended governance practices are not legislation. Applicability varies by entity type and sector.