Policy
Last Updated: July 29, 2026 | By Mihail Sebastian | AI Dictionary
A documented set of rules an organization adopts to govern how AI is built, bought, and used – covering scope, responsibilities, and enforcement.
What is a Policy?
A policy is a documented set of rules an organization adopts to govern decisions and behavior; in AI governance, it states how AI systems are allowed to be built, bought, and used.
A policy differs from a principle by being specific enough to follow and to check: “be fair” is a principle, “test every hiring model for demographic bias before release” is a policy.
In reinforcement learning the same word means something unrelated, the function an agent uses to pick its next action; this page covers the governance sense.
How a Policy Works
A working policy answers four questions. Scope: who and which systems it covers. Rules: what is required, permitted, and prohibited. Ownership: who maintains the policy and decides edge cases. Consequences: what happens when someone breaks it.
It sits between the principles above it and the procedures below it. The principle says protect customer data; the policy says no customer personal data enters external AI tools; the procedure explains how to request an approved tool.
A policy that nobody checks is a wish, so mature organizations tie each rule to compliance monitoring or periodic audits.
Example of a Policy
A mid-sized insurer adopts a generative AI use policy. Scope: every employee and contractor using AI tools for work. Rules: only tools on an approved list; no customer personal data or claims details in prompts; any AI-drafted text sent to a customer gets human review first.
Ownership: the AI governance committee maintains the policy and reviews it twice a year. Enforcement: the security team monitors tool usage, and violations follow the same process as other conduct breaches.
The payoff shows up when a new AI tool appears: employees do not debate the risks from scratch, they check the list, and anything not on it goes through the committee’s approval procedure.
Related AI terms: AI Governance · Compliance · AI Regulation · Risk Management
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Mihail Sebastian — Writes about AI governance, regulation, and the technology behind them. Placeholder bio — replace with a real credential line. About