Managing the Risks of Generative AI in the Workplace

Table of Contents

• Impact of AI

• ZNest's Take

• AI Headlines

• Senior Living Headlines

• Senior Living Stocks

IMPACT OF AI
Getting Out In Front

Establishing a clear company policy and guardrails around generative AI use is essential to protecting both the organization and its employees. Without defined boundaries, staff may unintentionally expose sensitive data, violate privacy laws, or rely on inaccurate AI-generated outputs that compromise decision quality. A well-crafted policy ensures that employees understand what’s appropriate, safe, and aligned with company values. It also fosters responsible innovation by enabling teams to explore AI tools confidently within a structured framework, rather than in isolated or uncontrolled ways. In short, guardrails don’t limit progress—they create the foundation for trustworthy and scalable adoption.

ZNEST’S TAKE
Key Takeaways

• Sensitive data is at risk - Employees may unknowingly input confidential or regulated information into AI tools, creating potential for data leaks and violations of laws like GDPR or HIPAA.

• Bias, inaccuracy, and over-reliance pose operational threats - Generative AI can produce incorrect or biased content, and over dependence can lead to a decline in employee critical thinking and judgment.

• Security and IP issues increase organizational exposure - Poorly vetted AI tools can introduce malware or misuse copyrighted material.

• Organizations need clear, enforceable AI policies - Leadership should create a culture that accepts AI use but define what employees can and cannot do with AI tools.

• Training and tool vetting are essential for safe adoption - Regular education, centralized approval of AI tools, and open dialogue around AI help prevent shadow use and promote responsible experimentation.

Risks of “Wild West” Gen AI Use in the Workplace

Data Privacy and Confidentiality
Employees may unknowingly input sensitive information into generative AI platforms, such as customer records, financial reports, legal documents, or even employee evaluations. Many AI tools (especially public ones like ChatGPT, Bard, or Copilot) may temporarily store or analyze inputs to improve their models unless explicitly disabled. This presents a risk of data leakage and potential regulatory violations under laws like GDPR, HIPAA, or CCPA.

Bias and Inaccuracy
Generative AI is trained on large volumes of publicly available text, which often reflect societal biases and misinformation. As a result, it can produce outputs that are discriminatory, misleading, or factually incorrect. In regulated industries like finance, healthcare, or law, such errors can lead to legal and reputational consequences.

Over-reliance and Deskilling
When workers begin to rely too heavily on AI for writing, summarizing, or decision-making, their own abilities to research, analyze, or communicate may atrophy. This “deskilling” can reduce long-term employee value and adaptability—especially in roles that require strategic or critical thinking.

Intellectual Property (IP) Concerns
Generative AI can unknowingly replicate content it was trained on, which may include copyrighted material. This creates uncertainty about whether AI-generated work is legally usable. This is especially problematic in creative industries such as design and publishing.

Security Vulnerabilities
Integrating AI tools, especially those that connect to cloud services, APIs, or external databases, can expand an organization's attack surface. Internal tech teams need to be involved in vetting these tools. A simple example is a team member installs a browser extension leverages AI to automate email writing, but it has a hidden script that scrapes sensitive data.

Misalignment with Organizational Goals
If AI is adopted in silos or without clear governance, it may be used in ways that clash with company goals, values, or brand tone.

Policy Recommendations

Here are some recommendations to guide safe, responsible, and effective use of generative AI in the workplace.

Establish Clear Data Usage Guidelines

• Prohibit employees from entering sensitive, confidential, or regulated data (e.g. PII, PHI, trade secrets) into public AI tools unless explicitly approved and secured.

• Use internal AI tools with enterprise-grade security where possible.

• Maintain a list of things that cannot be shared with gen AI tools and update it regularly with compliance and legal teams.

Mandate Human Review and Accountability

• Require all AI-generated content, especially in decision-making, external communication, or legal contexts, to be reviewed by a human.

• Clearly state that AI must be used as an assistant, not an authority.

Align with Legal and Ethical Standards

• Require that AI use complies with all applicable laws (e.g. GDPR, HIPAA, IP law) and company values (e.g. equity, transparency, inclusion).

• Disclose when content or decisions are AI-assisted, especially in hiring, customer service, or compliance workflows.

Audit AI Tools Before Use

• When possible, have IT, Security, and/or Legal teams review AI tools before use.

• Evaluate vendors for security practices, data storage policies, model transparency, and IP usage terms.

• Maintain a centralized list of approved AI tools and review new ones as employees adopt them.

Provide Training and Awareness Programs

• Train employees on appropriate use cases, limitations, and risks of generative AI.

• Include real-world examples of misuse and safe practices.

• Create a culture open to AI use. Ensure that employees feel safe to share the tools they want to use so these tools can be properly vetted and not used in secret.

Create an AI Use Policy Document

• Publish a clear internal policy that outlines permitted uses, prohibited behaviors, escalation channels, and disciplinary consequences.

• Revisit and revise this policy as laws and technologies evolve.

• Include an AI “code of conduct” section, and require employees to acknowledge it annually, similar to privacy training.

AI HEADLINES

• Google confirms plan to bake Gemini AI directly into Chrome

• American Schools Were Deeply Unprepared for ChatGPT, Public Records Show

• How to opt out of Meta’s AI training

• Waymo recalls 1,200 robotaxis following low-speed collisions with gates and chains

• An AI-powered Coca-Cola ad campaign mistakenly invented a book by a famous author

SENIOR LIVING HEADLINES

• ‘Invest Intelligently’: Watermark’s New CEO Sets Sights On Improvement, Stabilization

• Evolving Technology in Senior Living

• Long-vacant Detroit high-rise starts a new chapter as senior housing

• Sonida Senior Living adds portfolio for properties being repositioned to business model

• Senior Living More Tariff-Resistant Than Other Real Estate, Immigration Remains Big Issue

Senior Living Stocks