What AI productivity reform means for governance professionals

Productivity has quietly become one of the defining issues of our time. When productivity stalls, the impacts ripple outwards, slower wage growth, tighter budgets, and organisations finding it harder to invest, innovate and grow. That’s the backdrop to Governance Institute of Australia’s recent submission to the Senate Select Committee on Productivity, which focuses on how economic and governance settings can either enable or constrain Australia’s productivity potential.

At its core, the submission makes a simple but important point: productivity reform is not just an economic issue, it’s a governance issue.

Technology: opportunity, unevenly realised

A major theme of the submission is the role of technology, particularly artificial intelligence, as a once-in-a-generation opportunity to lift productivity across the economy. While the promise is significant, the reality is far more uneven.

Some organisations are moving quickly, investing in AI and digital tools that transform how work is done. Others are lagging, held back by regulatory uncertainty, skills gaps, legacy systems, and a lack of confidence around technology governance. For many boards and senior leaders, AI adoption has stalled at the pilot stage, with returns on investment proving hard to measure.

From a governance perspective, the submission emphasises that AI is not about replacing people. It’s about reshaping roles, decision making and workflows, and that requires strong oversight, clear accountability and ethical deployment frameworks. Without those foundations, productivity gains will remain patchy, and trust risks will grow.

The submission argues for stronger national support structures, including expanded funding for the National AI Centre and a well-resourced Australian AI Safety Institute. These bodies have a critical role to play in lifting governance capability, supporting safe experimentation, and helping organisations of all sizes navigate AI risks with confidence.

Building trust through better AI governance

Trust features heavily throughout the submission. As AI tools become embedded in everyday business processes, community expectations around transparency, fairness and accountability are rising fast.

The submission proposes practical mechanisms to address this, including compliant-by-design AI systems, enhanced regulatory sandboxes, and voluntary transparency reporting to improve visibility over how AI is used in workplaces. For governance professionals, these ideas reinforce a familiar truth. Productivity gains are unlikely to stick unless stakeholders trust the systems that deliver them.

Importantly, the submission also highlights the risks of “shadow AI”, where staff use free or consumer AI tools without formal oversight. From privacy, security and compliance perspectives, this is an emerging governance blind spot that boards and executives can no longer afford to ignore.

Regulation, complexity and the cost of doing business

Beyond technology, the submission takes a clear stance on regulatory complexity as a drag on productivity. Governance Institute members consistently report that administrative burden, duplication and regulatory overlap consume time and resources that could otherwise be directed toward innovation and value creation.

The submission calls for a dedicated regulatory efficiency taskforce, systematic post implementation reviews of new regulation, and continued investment in modern regulatory architecture. The message is not deregulation at any cost, but smarter regulation. Rules that are fit for purpose, proportionate, and designed with real-world business impacts in mind.

Corporate law reform is a particularly sharp focus. The submission echoes long-standing concerns that the Corporations Act has become unnecessarily complex, creating compliance risk and cost without always delivering better outcomes. A renewed, independent corporate law reform body is proposed to support long term, evidence based reform.

Why this matters for governance professionals

For those working in governance, risk and compliance, the submission is a reminder that productivity is shaped by everyday governance decisions. How technology is overseen, how regulation is navigated, and how boards balance innovation with risk.

Productivity reform isn’t something that happens “out there” in policy debates alone. It shows up in boardrooms, committee papers, investment decisions and organisational culture. And governance professionals will be central to ensuring Australia’s next productivity chapter is not only more efficient, but also more trusted, inclusive and resilient.