AI Governance for SMBs: A Practical Policy Template You Can Use Today
You don't need a 200-page AI policy. Here's a practical governance template that covers compliance, ethics, and operational guardrails for small businesses.
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Why Your SMB Needs an AI Policy Now
If your employees are using ChatGPT, Copilot, or any AI tool—you already have an AI practice. The question is whether it's governed or ungoverned. Ungoverned AI is a compliance risk, a data leak waiting to happen, and a liability your insurance may not cover.
The Minimum Viable AI Policy
Your AI governance doesn't need to be a 200-page document. Start with these five sections:
Section 1: Approved AI Tools
Maintain a registry of sanctioned AI tools and services. For each, document:
- What data it can access
- Who is authorized to use it
- What use cases are approved
- Where data is processed and stored
Section 2: Data Classification Rules
Define what data can and cannot be shared with AI systems:
- Never share: PII, PHI, financial credentials, proprietary source code, client confidential data
- Share with approved tools only: Internal documents, process documentation, anonymized analytics
- Freely shareable: Public information, marketing content, general knowledge queries
Section 3: Human Oversight Requirements
Define when human review is mandatory:
- All customer-facing AI outputs before deployment
- Any AI-generated compliance or legal documentation
- Financial calculations and recommendations
- Personnel decisions informed by AI analysis
Section 4: Incident Response
What happens when AI goes wrong:
- Who to notify when an AI agent produces harmful or incorrect output
- How to disable or roll back an AI agent quickly
- Documentation requirements for AI-related incidents
- Breach notification procedures if AI exposes protected data
Section 5: Review Cadence
AI moves fast. Your policy should too:
- Quarterly review of approved tools list
- Monthly review of AI agent performance and incidents
- Annual comprehensive policy update
- Ad-hoc reviews triggered by new regulations or significant AI deployments
Aligning with NIST AI RMF
The NIST AI Risk Management Framework organizes AI governance into four functions: Govern, Map, Measure, and Manage. Our template maps directly to these functions, giving you a framework that scales as your AI usage matures.
Read our comprehensive AI Governance Guide for deeper guidance on each NIST function.
Get Started
Our AI Advisory team can customize this template for your industry, size, and compliance requirements in a single working session. Schedule a consultation →
This article is part of our comprehensive AI & Automation guide.
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