General Counsel (GCs) and Chief Information Security Officers (CISOs) must prioritize AI literacy as a key part of AI governance and compliance programs in 2025.

With the EU AI Act introducing mandatory AI literacy requirements for providers, deployers, and affected persons, organizations must ensure their workforce and external stakeholders have the skills, knowledge, and understanding to deploy AI systems responsibly. This is critical not only for legal compliance but also for mitigating risks, ensuring transparency, and maintaining trust in AI-driven processes. AI literacy is no longer optional—it is a cornerstone of effective AI risk management and governance.

Key Takeaways for GCs and CISOs:

1. Definition and Scope of AI Literacy:
   • Defined in Article 3(56) of the EU AI Act, AI literacy involves “skills, knowledge and understanding” for making informed AI deployments and understanding associated risks and harms.
   • Applies to many U.S. companies because it applies extraterritorially to any company that is a Provider, Deployer, Importer, Distributor, or Product Manufacturer of AI systems within the EU.
2. Legal Obligations:
   • Providers and deployers must ensure AI literacy among staff and external stakeholders interacting with AI systems.
   • Affected persons must also understand how AI-driven decisions impact them, emphasizing transparency and explainability.
3. Implementation Requirements:
   • AI literacy programs must address both general awareness of AI risks and specific training on deployed systems.
   • Success should be measured with effective output metrics beyond basic training completion rates.
4. Contextual Factors:
   • Programs must be tailored to organizational roles, technical expertise, industry context, and the risk profile of AI systems.
   • Regular reviews and updates are necessary to adapt to evolving AI technologies and regulations.
5. Compliance Timelines:
   • The AI literacy requirement takes effect on February 2, 2025, with enforcement mechanisms in place by August 2025.
   • Organizations should begin assessments and planning immediately to meet minimum requirements and develop roadmaps for program maturity.
6. Penalties and Risks:
   • While there are no direct fines for noncompliance with AI literacy, failures may influence penalties for other breaches under the AI Act.
   • Regulators will evaluate whether inadequate AI literacy contributed to violations.

Challenges in Implementation:

• Dynamic Nature of AI: AI literacy must evolve alongside rapidly advancing technologies.
• Program Tailoring: AI literacy initiatives must be context-specific, reflecting varying applications, risks, and expertise.
• Resource Constraints: Smaller organizations may lack resources, while larger ones face complexity in scaling programs.

Path Forward:
To meet compliance requirements and remain competitive, organizations must embed AI literacy into broader governance and risk management frameworks. As Erica Werneman Root states, “AI literacy should not be treated as a stand-alone compliance requirement but as an ongoing component of AI risk management and good governance.” By fostering a culture of responsible AI use, organizations can future-proof themselves against regulatory and technological changes while gaining a competitive edge.

Original Article:
Title: “Understanding AI Literacy”
Publication: IAPP (International Association of Privacy Professionals)
Date: January 2025
Authors: Erica Werneman Root, Nils Müller, Monica Mahay
Link: Full Article