AI governance risks require urgent Australian law reform

AI governance risks require urgent Australian law reform

Bond Law Review paper calls for stronger regulation as AI adoption accelerates

Australia needs dedicated artificial intelligence (AI) legislation and stronger corporate governance frameworks to address emerging legal risks, according to a new peer-reviewed academic paper by Bond University researcher Dr David Millhouse.

Published in the peer-reviewed *Bond Law Review*, the paper titled "Artificial Intelligence and the Law" examines the growing impact of AI across corporate governance, law, regulation, and business, cautioning industry and government alike that existing Australian laws are lagging real-world developments and will continue to struggle against the ever-accelerating AI industry.

Dr Millhouse, an Honorary Adjunct Senior Research Fellow at Bond University's Faculty of Law, explores how AI is transforming professional services and operations, while exposing boards, directors, trustees, legal practitioners and regulators to increasingly complex legal challenges.

The paper identifies significant legal risks associated with current AI deployment, including the spread of inaccurate and biased information, alongside unclear data ownership protocols, privacy breaches, intellectual property disputes, professional negligence and questions about where responsibility lies with automated decision-making.

"AI governance is not optional and not delegable," Dr Millhouse writes, alerting government, company directors and trustees to understand the workflows, who is responsible, comprehend the risks, and enact stronger safeguards with AI technologies being deployed.

"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."

Recommendations include expanding the responsibilities of the Australian AI Safety Institute, strengthening professional disclosure requirements, mandatory AI governance training, and introducing an overarching Australian AI statute, with stronger data ownership and IP protections, independent certification and auditing, through amendments to the Corporations Act 2001.

"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 says.

At enterprise level, boards should appoint Digital Readiness Officers, establish dedicated AI compliance committees to oversee implementation, manage legal risks and ensure appropriate human supervision.

"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," the paper says.

"All entities should conduct board-level workshops to establish internal policies and procedures, supported by board-level compliance reporting. Regular management training and reporting should follow, with clear responsibility for developing human-supervision capabilities and evaluating AI behaviour. These requirements should be mandatory for ASX-listed companies and trusts."

While AI can - when deployed intelligently - deliver substantial productivity and economic gains, mitigating its inherent risks requires significant work across legal frameworks, corporate responsibility and professional education, Dr Millhouse argues.

"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," he says.

"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 concludes.

The paper, Artificial Intelligence and the Law, was published on 13 October 2026 in Bond Law Review, Volume 38, Issue 2. The full publication is available at: https://blr.scholasticahq.com/article/171911-artificial-intelligence-and-the-law

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About Dr David Millhouse

Dr David Millhouse is an Honorary Adjunct Senior Research Fellow at Bond University's Faculty of Law, specialising in corporate governance, financial services regulation and the legal implications of artificial intelligence. He holds a BSc (Hons), PhD in Law, an MBA and an LLM, and has authored numerous academic papers and publications, including Litigation Financing - Untangling the Gordian Knot - The Future of Law Reform (2022); W[h]ither Australia? Will Parliament Act? (2020); and Corporate Governance in Non-Bank Financial Entities (2019) published by LexisNexis.

With more than 40 years of international experience in private equity, venture capital, funds management, corporate compliance, and leadership, Dr Millhouse combines extensive academic research with decades of commercial expertise. He is also the Founder and Chair of ActiumAI, an Australian company specialising in intelligent enterprise workflow automation and corporate governance.