Generative AI is capturing the attention of legal departments, yet Christine Uri, a seasoned legal and sustainability officer, urges in-house counsel to pause and consider a crucial underlying risk: governance. In a recent podcast, "Notes to My (Legal) Self," Uri discussed how AI's transformative impact hinges on legal teams guiding its integration responsibly.

Uri emphasizes that AI governance should commence with a thorough understanding of contract governance. This means recognizing and managing the risks already present through existing agreements. "AI is already in your systems," Uri points out, highlighting that many organizations unknowingly adopt AI through vendor agreements and procurement deals. The real challenge is knowing what has been agreed upon in these contracts to effectively manage and govern AI usage.

She also stresses the importance of regulatory awareness and internal scrutiny of AI applications within organizations. Uri warns of the dangers posed by employees unknowingly using AI tools like ChatGPT to handle sensitive company information, underscoring a widespread lack of awareness about the implications of AI technologies.

Mapping out an organization's AI footprint is essential, but this can only be effective if there is clarity about existing contracts. Uri argues that many companies lack visibility into their contractual obligations, which complicates their ability to govern AI effectively. She insists that understanding the data ownership, audit rights, and liabilities defined in contracts is crucial for legal teams to navigate AI integration smoothly.

Uri further connects AI governance with broader corporate responsibilities like ESG (Environmental, Social, and Governance), advocating for a unified approach to managing digital and environmental risks. Both require transparency, accountability, and proactive governance to ensure sustainable business practices.

For companies aiming to govern AI responsibly, Uri recommends establishing an AI oversight council, creating clear internal policies, auditing existing contracts for AI-related terms, and training the workforce comprehensively about AI risks and protocols.

In essence, Uri's message is clear: effective AI governance begins not with the technology itself but with the foundational contracts that bring the technology into the organization. Understanding and managing these agreements is not just a matter of compliance, but of steering AI use towards ethical and sustainable outcomes.