AI’s risk vs reward: Cisco and Governance Institute of Australia urge risk professionals to unlock AI’s potential
It identifies Chief Risk Officers (CROs) as catalysts for unlocking AI’s potential through safe, secure and strategic adoption and outlines four key roadblocks and six decisive moves to overcome them.
AI adoption: Balancing risk and reward
Australia’s adoption of Artificial Intelligence (AI) is being slowed by uncertainty over the risks involved. Many organisations remain cautious, unsure how to balance potential rewards with possible pitfalls. Cisco and Governance Institute’s report argues that CROs and other risk professionals are uniquely positioned to guide boards through this landscape and unlock AI’s full potential.
Turning Hesitation Into Action: How Risk Leaders Can Unlock AI’s Potential, authored by researcher Brad Howarth, is a joint initiative between Cisco, a leader in AI and cybersecurity, and Governance Institute of Australia. It draws on the Cisco AI Readiness Index 2024, the Governance Institute’s 2025 AI Deployment and Governance Survey Report, and insights from Chatham House roundtable discussions with risk owners to unpack barriers to adoption.
The report highlights the urgent need for Australian organisations to strengthen risk management to harness AI’s potential, or risk falling behind in the global adoption race.
Governance Institute of Australia’s AI, Cyber and Technology Policy & Advocacy Lead, Daniel Popovski, said: “Change doesn’t occur in isolation. It requires us to start critical conversations and map support from board directors, executive teams, staff members and stakeholders. The conversations illuminated in this report demonstrate how governance and risk professionals have moved organisations from inaction to action through their own lived experiences. We partnered with Cisco because there was a clear need to demonstrate the role that Chief Risk Officers, and risk managers play in getting the greatest value from new AI technologies.”
A sharp rise in AI confidence
AI is reshaping business and society at an unprecedented speed. Its potential to enhance productivity, decision-making and value creation has been likened to the Internet revolution.
Cisco’s 2024 AI Readiness Index revealed that only 4% of Australian businesses were fully prepared to deploy AI, showing Australia lagging global peers. Governance Institute’s 2025 survey found 93% of organisations cannot measure the ROI of AI initiatives, a critical capability gap.
Without decisive action to build safe adoption pathways, Australia risks falling further behind.
However, early findings from Cisco’s 2025 Index show improvement: 22% of businesses now rate themselves as “Pacesetters,” up from 4% in 2024. This suggests organisations are moving from awareness to implementation, shifting from AI education to risk identification as pilots progress to production.
The rising role of the risk professional
Risk professionals are uniquely placed to help organisations capture AI’s benefits while managing its risks. Their expertise in governance and controls enables them to guide boards in balancing opportunity with accountability, making the risks of adoption less daunting than the risks of inaction.
Cisco and Governance Institute place risk leaders at the centre of the AI transformation agenda. Traditionally focused on compliance, risk leaders are now being asked to take on a strategic role, helping boards and executives navigate AI safely and unlock its potential.
This expanded remit demands collaboration. Risk teams must partner with Chief Technology Officers, data scientists and business leaders to understand how AI systems function, the data they rely on, and the controls required. Working closely with CEOs and boards, risk professionals can provide both encouragement and oversight to ensure AI adoption delivers sustainable gains, particularly as AI readiness accelerates across Australian organisations.
By collaborating with technical and business teams, risk leaders deepen their understanding of AI’s capabilities while embedding governance practices throughout the organisation.
Ultimately, AI should be integrated into a long-term strategy, not treated as a short-term experiment. Many organisations are creating AI Governance Committees that unite risk, technology, legal and business leaders to define principles, set thresholds and oversee implementation.
The four critical roadblocks
The report identifies four major roadblocks stalling AI adoption in Australia:
- Ethical and reputational risks
AI can automate tasks but also introduce biased or incorrect outputs. When public, these outcomes erode trust and can cause harm. - Security and privacy risks
AI systems depend on large datasets that must be ethically sourced and securely managed. Poor practices risk data leaks or privacy violations, making strong safeguards essential. - Operational and strategic risks
AI projects require significant investment and expertise, yet returns are uncertain. Organisations must justify projects and ensure they deliver strategic value. - The risk of falling behind
Inaction itself is a risk. Organisations that hesitate may miss opportunities to improve operations and customer experience, falling behind competitors who move faster.
These challenges are not just technical; they’re rooted in organisational culture and leadership, reinforcing the need for CROs and risk teams to guide AI adoption.
Six decisive moves to accelerate safe AI adoption
To help boards move from caution to capability, the report outlines six decisive actions for risk professionals:
- Build AI knowledge across the organisation
AI has evolved mainly within technology teams, leaving many risk and governance professionals under-informed. Building AI literacy across all functions is critical. - Create an interdisciplinary AI governance committee
Cross-functional committees help align AI with business strategy and establish guardrails around ethics, privacy and accountability. - Embed AI within business strategy
As digital transformation once became integral to business strategy, AI must now be treated as a core enabler, not a side project. - Invest in appropriate controls
Policies and tools are needed to manage access, permissions and data integrity across AI systems. - Raise AI awareness across the workforce
Transparent communication and staff education reduce fear and prevent unsanctioned “shadow AI.” Training, hackathons and sandbox environments encourage innovation within clear boundaries. - Measure and share results
AI projects should be evaluated for both short-term returns and long-term strategic value. Capturing lessons and sharing successes builds organisational confidence.
Together, these actions form a roadmap for translating AI ambition into safe, measurable progress.
A whole-of-organisation effort
AI adoption cannot rest solely with technology or risk functions. Governance must extend across HR, legal, operations and communications. People & Culture teams, for example, play a vital role in addressing workforce concerns and helping employees understand how AI will reshape, rather than replace, their roles.
As one roundtable participant noted, “Everyone plays a part in this – it absolutely is a whole-of-organisation thing.”
Building a transparent AI culture also reduces the risk of shadow AI by encouraging staff to innovate within approved frameworks. Trust through openness and education is as important as technical controls.
Within the report, Carl Solder, Cisco ANZ’s Chief Technology Officer, said: “Artificial Intelligence represents the single greatest challenge to businesses this century. Its potential is immense, but success is neither straightforward nor guaranteed. Organisations that move quickly to build knowledge and capability will be best placed to reap the rewards of AI. For Australian organisations, that journey must begin now.”
The opportunity beyond the risk
While barriers remain, the report is optimistic. Australia’s risk professionals can transform AI uncertainty into strategic advantage. By applying their skills in governance and oversight, they can rebalance the equation, making the risks of embracing AI less than the risks of standing still.
For boards, this means rethinking risk not as a constraint but as a compass. Intelligent risk-taking, guided by sound governance, can define whether an organisation leads or lags in the AI era.
As the report concludes: “Each new era of technology creates winners and losers, and it is those organisations that understand the possibilities early that are in the best position to experience them.”
By embedding risk professionals at the heart of AI strategy, Australian organisations can move from hesitation to informed action, unlocking AI’s promise while safeguarding against its pitfalls.
To access the full discussion report, click here. You can also compare your organisation’s readiness using Cisco’s interactive AI Readiness Assessment Tool.
Additional resources
- Turning Hesitation Into Action: How Risk Leaders Unlock AI’s Potential
- Cisco 2024 AI Readiness Index
- Cisco 2025 AI Readiness Index (2025 AI Readiness Index for Australia launch in January)
- Governance Institute of Australia’s 2025 AI Deployment and Governance Survey Report
- Cisco AI Readiness Assessment Tool
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