Governance of Generative Artificial Intelligence for Companies

Generative Artificial Intelligence (GenAI) like ChatGPT has swiftly entered organizations without adequate governance, posing both opportunities and risks. Limited research addresses organizational governance from both technical and business perspectives. This gap is particularly relevant for international businesses, where differences in regulation, language, and business environments complicate governance. While multiple frameworks for AI governance exist, this needed diversity is lacking for GenAI. This review paper fills this gap by surveying recent literature to better understand the fundamental characteristics of GenAI and to adapt existing governance frameworks specifically to GenAI. The resulting framework delineates scope, objectives, and governance mechanisms designed to both harness business opportunities and mitigate risks associated with GenAI integration. We theorize a distinctive property of GenAI governance: its scope is endogenous to use. Unlike conventional organizational AI, for which governance is organized around a fixed artifact (e.g., model, intended use), GenAI allows users to reconfigure the artifact (e.g., its behavior and risk). Consequently, the object of governance is not fixed ex ante but is partly constituted through use.