By Briar Christensen, Principal Advisory Consultant

AI Governance: What’s It About?

AI Governance: What It Is and Why It Matters for New Zealand Businesses

Artificial intelligence (AI) is transforming industries worldwide – and New Zealand businesses are no exception. From improving customer experience to streamlining operations, AI is becoming a critical driver of competitiveness.

But with opportunity comes responsibility. Without the right guardrails, AI can expose organisations to ethical, legal, and reputational risks. That’s where AI governance comes in – to ensure AI is designed, deployed, and managed responsibly.

What Is AI Governance? 

AI governance is the system of policies, practices, and procedures that guide how organisations develop, implement, and oversee AI. At its core, it ensures AI is:

• Ethical: Respecting human rights, privacy, fairness, and avoiding harm.
• Compliant: Meeting obligations under local and international regulations, including New Zealand’s Privacy Act 2020.
• Risk-Aware: Identifying and reducing risks such as algorithmic bias, cybersecurity threats, and unintended consequences.
• Transparent and Accountable: Making AI decisions explainable, auditable, and traceable.
• Inclusive: Involving diverse stakeholders – customers, employees, regulators, and partners – in governance discussions.

Put simply, it’s about creating trustworthy AI systems that are fair, transparent, and aligned with societal values.

Why It Matters 

For New Zealand businesses, the stakes are high. Poorly governed AI can result in:

• Loss of customer trust.
• Reputational damage.
• Legal and regulatory penalties.
• Operational inefficiencies.

On the flip side, a strong AI governance builds trust, enhances compliance, and creates a safe environment for innovation. Far from being restrictive, governance actually empowers innovation by setting clear rules and reducing uncertainty.

Key benefits include:

• Protecting customer data and privacy.
• Reducing bias and promoting fairness.
• Supporting diversity and inclusion goals.
• Strengthening compliance with global and local regulations.
• Avoiding costly mistakes and improving efficiency.

With Generative AI (GenAI) and other emerging technologies changing rapidly, businesses need proactive governance to keep pace with evolving risks and expectations.

We believe all businesses in New Zealand should be proactive in managing their AI systems and AI governance. Your customers need to feel confident that your AI systems are used responsibly, and their data is protected. Robust AI governance helps build and maintain this trust by ensuring transparency and the ethical use of AI. This is especially important for people for whom trust, and privacy are top priorities.  And as many of our clients already know, contrary to seeming restrictive, in effect AI governance does the opposite – by providing a clear framework and a safe environment for innovation.

How To Get Started With AI Governance 

AI governance is not just a buzzword but a crucial step in leveraging AI responsibly and effectively. Whether you’re starting small or scaling enterprise-wide, the first step is developing a tailored AI Governance Framework that will:

• Define your organisation’s AI principles and policies.
• Align AI practices with business strategy and risk appetite.
• Provide tools and processes for transparency and accountability.
• Enable safe experimentation and adoption of new AI tools.

At Stellar Advisory, we work with New Zealand businesses to design and implement AI Governance Frameworks that are practical, ethical, and future-ready.

If you’re keen to unlock AI’s potential, while safeguarding trust and compliance, contact Stellar Advisory on 0800 228 872, or email us on bi@stellarconsulting.co.nz.