Why Small Businesses Need an AI and Data Governance Policy

Small businesses tend to think an AI and data governance policy is unnecessary and unimportant for their scale of work. They couldn't be more wrong...

- Jitendra Bhojwani

AI and data governance have largely been positioned as priorities for large enterprises, especially with regulatory frameworks tightening globally.

Hence, many large enterprises have developed a detailed AI and data governance policy. However, small and medium enterprises are not that keen to enforce strict policies regarding AI and data governance; they seem to think that their business size and reach make them immune to the consequences of the changing digital world. However, the fact is that due to their limited size and capital, SMEs are even more vulnerable to bias, breaches and other cyber threats. Moreover, unlike large companies they don’t have the cushion to cover the damage and bounce back from a breach — a key point to focus on as AI misuse has increased the scope of cybercrime multifold.

Why SMBs should be serious about data governance

While small businesses are increasing the use of AI tools like AI agents, recommendation engines, email automation, or predictive analytics for their in-house as well as customer facing operations, they lack robust internal frameworks to evaluate the logic behind how their AI tools work. They aren’t keen to know how AI gathers the data, processes it, or makes decisions that will impact their customers. This can lead to bias, operational discrepancies and privacy violations.