This is the second part in a blog series on the AI landscape for 2026 by Eleanor Dempsey, Auxilion's Director of Strategy, Innovation & Transformation. You can find the first part here.
AI governance isn’t optional, it’s law. But can compliance become your competitive edge?
In Part 1 of this series, I explored the “AI paradox”: why so many pilots fail to deliver enterprise-wide impact due to the lack of a structured approach. I highlighted governance as the critical link between experimentation and value creation. That argument is taking on new urgency. With the EU AI Act now in force and its most stringent requirements becoming active, governance is no longer optional; it’s a legal and commercial imperative that will shape how organisations deploy AI responsibly and competitively.
EU AI Act Compliance: What It Means for Your Business
The EU AI Act is live legislation, with obligations phased in between 2024 and 2026.
Feb 2025: Bans on “unacceptable risk” AI systems and AI literacy measures came into effect
Aug 2026: Full compliance obligations for high-risk AI systems will apply
The Act introduces a risk-based approach, placing stringent obligations on businesses deploying “high-risk” AI systems that could impact health, safety, and fundamental rights.
This regulation demands a continuous, iterative risk management system throughout the AI lifecycle, from design to deployment. It requires:
✔ High-quality data
✔ Detailed documentation
✔ Human oversight
✔ Commitment to transparency and accuracy
A well-defined governance framework is essential for mitigating legal, ethical, and operational risks.
Why Governance Drives Real AI ROI
Moving beyond a reactive compliance mindset, a strong governance framework can become a competitive advantage. It allows businesses to confidently scale AI usage, unlocking significant productivity, accuracy, and efficiency gains that directly impact P&L.
However, as I highlighted in Part 1, these gains don’t come from simply rolling out AI tools to employees. Real impact happens when AI is embedded into an organisation’s operational processes, woven into the very fabric of how work gets done. Governance ensures AI isn’t just an add on, but a core enabler of transformation.
Academic and industry research demonstrates this clearly:
University of St Andrews: AI adoption can boost SME productivity by 27%–133%
MIT Sloan: AI-enabled software helped firms cut monthly close times by 7.5 days
These gains aren’t just about speed. They free employees to focus on higher-value work, from client communication to strategic analysis, a point reinforced by research on AI’s impact on managerial decision-making efficiency and accuracy (Braidr, 2025).
Seizing the Agentic Advantage, Responsibly
So how do organisations move from compliance to transformation? Here are four steps to make it happen:
- Shift from Use Cases to Business Processes: Redesign workflows around what an agent can do, not just augmenting existing tasks
- Establish Robust AI Governance: Create a cross-functional AI governance council to define usage policies, classify systems by risk level, and ensure compliance
- Invest in Scalable Infrastructure: Agentic AI requires a new AI control plane to manage and mitigate risks
- Adopt a CEO-led Vision: Make agentic AI part of a top-down transformation with clear goals and metrics
McKinsey and other authorities firmly believe that agentic AI is the way forward. I agree. At Auxilion, we're passionate about helping our customers on this journey in a structured, measured way, ensuring we view it through the crucial lenses of governance, compliance, and risk.
If your organisation is assessing AI-readiness, governance, risk and compliance strategies, Auxilion can help you design a roadmap that balances innovation with governance.
📩 Contact us at hello@auxilion.com.
