The Risk of Getting AI Wrong: Reputation, Regulation, and Responsibility
8 October 2025Trends in Leadership and Team Development
At Skills Development Group (SkillsDG), we’re seeing some clear and exciting shifts in the kinds of development leaders are prioritising, both for themselves and their teams. Leaders now want training that feels real, practical, and tailored to their world, rather than broad, off-the-shelf solutions.
Unsurprisingly, artificial intelligence (AI) continues to dominate the conversation. In fact, after listening to market feedback from senior leaders, we’ve just launched a new course, Foundations of AI and Ethics - giving people confidence and clear guardrails around using data safely and responsibly.
But while enthusiasm for AI is growing, so too are the risks of getting it wrong.
The Real Risks Senior Leaders Care About
For leaders, AI is no longer a “future issue.” It’s a present-day reality that affects every decision, every process, and every customer interaction. Yet, as businesses race to adopt AI tools, the potential downsides are becoming clearer, and the stakes higher.
Here are the three key risk areas keeping executives awake at night:
1. Reputation: Brand Trust at Stake
AI can build trust or break it overnight. When algorithms misfire, bias goes unchecked, or data is mishandled, brand reputation can take an immediate hit.
- Example: When a major global recruitment platform’s AI system was found to favour male applicants, it not only raised concerns about fairness but eroded confidence in the company’s integrity and judgment.
- Example: A fashion retailer’s chatbot recently went rogue on social media, giving offensive or misleading responses, forcing the brand into damage control and public apology.
For leaders, these aren’t abstract tech stories they’re cautionary tales about what happens when innovation outpaces governance.
2. Regulation: The Cost of Non-Compliance
As governments introduce stricter AI regulations, from the EU’s AI Act to Australia’s and New Zealand’s emerging ethical AI frameworks, the risk of regulatory penalties is rising sharply.
Poorly governed AI systems can breach privacy, consumer protection, and discrimination laws, often without the organisation even realising it. Inconsistent oversight or reliance on unverified third-party tools can expose companies to both legal and financial consequences.
3. Responsibility: Ethics and Data Misuse
AI ethics isn’t just a buzzword; it’s a business imperative. Misuse of data, lack of transparency, and failure to embed ethical principles into AI design can lead to major trust deficits both internally and externally.
When employees don’t know how to use AI safely, and leaders don’t set clear boundaries, even small missteps can lead to reputational and operational fallout.
Understanding AI Ethics: A Leadership Imperative
Ethical AI is not just the domain of data scientists or tech teams - it’s a leadership competency. Every executive decision about AI involves a balance between efficiency and responsibility.
By understanding the foundations of AI ethics, leaders can:
- Identify risks early: spotting potential bias, data misuse, or automation pitfalls before they become crises.
- Build accountability: creating a clear governance structure where responsibility for AI outcomes is shared, not shrugged off.
- Protect brand trust: demonstrating to customers and regulators that their organisation is proactively managing technology risk.
- Empower teams: giving employees the confidence to use AI responsibly, without fear of overstepping boundaries.
This is precisely why SkillsDG developed its Foundations of AI and Ethics course - to help leaders move beyond hype and into confident, values-based decision-making.
Final Thought: Getting AI Right
AI brings enormous potential, but without the right guardrails, it also brings risk. For leaders, understanding the ethical, reputational, and regulatory dimensions of AI isn’t optional. It’s part of protecting your organisation’s future.
The businesses that will thrive in the AI era are those that balance innovation with integrity - building not only smarter systems, but stronger trust.
This article was written by Gwyn Thomas, Director of Product, Innovation, and Quality at Skills Development Group. Drawing from over two decades of experience in product development and team leadership, and with a keen focus on market trends, Gwyn drives product innovation to meet the evolving demands of the education and training sector.
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