Australian law expert calls for AI governance overhaul

A Bond Law Review paper by Dr David Millhouse has called for dedicated Australian artificial intelligence legislation and stronger corporate governance rules, arguing that existing laws are failing to keep pace with AI adoption in business and professional services.

The study, titled Artificial Intelligence and the Law, examines legal and regulatory issues arising from the use of AI in corporate governance, legal practice and business operations. It identifies risks including inaccurate or biased outputs, uncertainty over data ownership, privacy breaches, intellectual property disputes, professional negligence and questions of accountability in automated decision-making.

Dr Millhouse, Honorary Adjunct Senior Research Fellow at Bond University's Faculty of Law, argues that directors, trustees, legal practitioners and regulators face growing legal exposure as AI tools spread through workplace processes and decision-making systems.

"AI governance is not optional and not delegable," Dr Millhouse said.

He argues Australia should move beyond its current approach of avoiding AI-specific legislation. The paper contends that the country needs a broad statute to address the legal effects of AI before more advanced forms of the technology become more widely embedded in organisations.

"Present Australian government policy (under review) is to not legislate a specific AI statute. This is an error requiring legislative rectification in the pre-AGI era. Reform needs to be capacious," Dr Millhouse said.

Governance proposals

The paper sets out a series of measures aimed at boards, regulators and professional bodies. They include expanding the role of the Australian AI Safety Institute, introducing mandatory governance training, tightening disclosure obligations for the professional use of AI, and creating independent certification and auditing arrangements.

It also proposes changes to the Corporations Act 2001, with stronger protections around data ownership and intellectual property. At company level, Dr Millhouse says boards should create AI-specific oversight structures rather than leaving supervision solely to information technology teams.

"Implement a bias and factual data and outcome regime policed by an independent certification authority (eg AAISI, if its mandate is reformed); introduce lawyer and barrister mandatory certification disclosing deployment of AI and the extent of professional human supervision," Dr Millhouse said.

Another recommendation is for boards to appoint Digital Readiness Officers and establish AI compliance committees with standing similar to audit committees. The paper says these bodies should monitor implementation, legal risk and human supervision arrangements.

"Boards should appoint a Digital Readiness Officer to implement IEWA [Intelligent Enterprise Workflow Automation] reporting through an AI compliance committee equivalent to the audit committee and separate from operational IT management," Dr Millhouse said.

The paper also says listed companies and trusts should run board-level workshops on internal AI policies and compliance reporting, followed by regular management training. It argues that responsibility for supervising AI systems and assessing their behaviour should sit clearly within governance structures.

Legal and linguistic issues

Alongside its governance focus, the research examines the relationship between AI and legal linguistics. Dr Millhouse considers whether combining the two fields could improve legal accuracy across languages and cultures, broadening the discussion beyond compliance and risk management.

The paper places that argument within a wider debate about how AI may affect legal work. It suggests the technology's impact remains uncertain, even as adoption increases and expectations of productivity gains stay high.

"It is too early to definitively predict how generative AI will affect the law and the legal profession. How much of the hype will come to pass, and whether the effects of AI will be revolutionary or evolutionary is not yet obvious. Technology may be revolutionary, but its application is evolutionary," Dr Millhouse said.

Dr Millhouse has written previously on corporate governance, law reform and financial regulation. He also founded and chairs ActiumAI, an Australian company focused on intelligent enterprise workflow automation and corporate governance.

The paper closes with a warning that the legal system and corporate oversight structures should adapt before AI becomes more deeply embedded in critical decisions.

"It would be trite to forecast epochal change, but to emulate Sir Winston Churchill, the journey to artificial general intelligence (AGI) is at 'the end of the beginning'," Dr Millhouse said.