What Does Good Look Like? AI Governance Best Practice for UK SMEs
Why This Matters Now
If your business is already using AI, or planning to, it’s time to start thinking about governance. By 2027, all major jurisdictions will enforce AI governance standards. That includes the UK, EU, and likely most of your client markets. As Gartner (2024) puts it:
“Regulators will expect organisations to demonstrate responsible AI practices, showing not just what AI does, but how it’s governed.” Source: Gartner, 2024
This won’t just be about compliance. Your customers and investors will expect clarity, safety, and accountability in how you use AI. That means no hiding behind tools, no vague promises, and no “we’ll deal with it later.”
Introducing International AI good practice
Introducing the ISO/IEC 42001 - The international standard helps you to establish, implement, maintain and continually improve an AI management system within your organization. ISO/IEC 42001 is the first international management system standard for artificial intelligence. It gives you a framework to:
Identify where AI is used in your business
Assess and mitigate the risks
Document decisions and assign responsibilities
Put people, not tech, at the centre of decision-making
Think of it like ISO 9001 (quality) or ISO 27001 (information security), but tailored to the specific risks of AI. It’s designed to work for organisations of all sizes, including SMEs. Reference: British Standards Institution (BSI)
What Will Be Expected from UK SMEs?
Whether you’re using AI to write marketing copy, automate admin, or analyse customer behaviour, people will want answers and want transparency:
Regulators: Is it compliant with data laws? Who’s accountable for outcomes?
Customers: Are you transparent about when AI is used? Is that a real person or AI generated image?
Investors and partners: Can you prove you’re managing the risks?
AI is already changing the way we work. But for most SMEs, the biggest challenge isn’t catching up, it’s knowing where to start safely, strategically, and without wasting time. That’s why ExpandAI is launching two simple, powerful offers to help you build AI confidence from day one.
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What Good Governance Looks Like
Good governance isn’t complicated - it’s just thoughtful. You don’t need a dedicated AI team. You do need to make deliberate decisions and keep a record of them.
Here are five core principles of responsible AI for SMEs:
Human Oversight
People stay in charge of decisions—especially high-risk ones.
Risk Assessment
Know the potential downsides of your tools (e.g. bias, errors, misuse).
Transparency
Make it clear to staff and customers when AI is involved.
Training & Awareness
Make sure staff know how to use AI safely and appropriately.
Audit Trails
Keep track of how tools are used and who approved what.
Use Case: BlueFern HR
BlueFern is a fictional HR consultancy for SMEs. They’ve started using an AI tool to generate first-draft responses to client emails.
Without governance:
Emails are sent straight from the AI tool with no checks
Clients aren’t told AI is used
No logs are kept
With governance:
Staff edit and approve each AI draft before sending
A standard footer reads: “This response was assisted by AI and reviewed by a member of our team.”
Each client interaction is logged with a date, tool used, and reviewer name
Result: better quality control, lower risk, and more client trust.
Common Mistakes to Avoid
Relying on tools blindly.
Just because it saves time doesn’t mean it’s safe. AI tools can confidently generate incorrect, biased, or misleading information.
No internal policies or training.
If your staff don’t know the rules, they’ll make them up as they go. That leads to inconsistency and risk.
Not telling people you’re using AI.
This breaks trust, and may breach data protection rules. Always be transparent.
Practical Steps to Start
If you’re unsure where to begin, here’s a simple 3-step entry point:
Run an AI audit of current use
List the tools in use, who uses them, and for what tasks
Train your team on AI fundamentals
A short session can build awareness and reduce risky behaviour
Create a risk register and update reguarly
Record where AI is used, potential downsides, and who’s responsible
Ready to Act?
Whether you’re just getting started, or ready to go deeper, we can help. .
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