Sep 03, 2026 | Leadership
Corporate Inaction on AI Casts a Long Shadow
Why shadow AI creates compliance risks for corporate tax, legal and compliance teams, by Liz Zimick
What happens when businesses take a laissez-faire approach to AI? Individual workers fill the gap by using publicly available chatbots that could create serious compliance risks and liability issues.
The phenomenon is known as shadow AI, and according to the Thomson Reuters Future of Professionals Report 2026, it’s currently occurring among more than one-third (36%) of professionals working in corporate tax, legal, and compliance functions who admit they are actively using AI tools their organization have not sanctioned. For businesses at the center of this issue, the risk of information leakage, inaccuracies, cut corners, and a collapse of standardized processes could create dangerous ripple effects.
Pressure to Move Faster
On the surface, the findings should not come as a huge surprise. AI is everywhere these days, and it’s already become second nature for many of us to turn to widely available consumer chatbots for guidance on everything from dinner recipes to exercise tips. On top of that, many corporate professionals are facing increased pressure from internal stakeholders and clients to deliver faster, better-informed decisions with better efficiency and cost controls. According to our research, 58% of corporate tax and legal professionals say they’re facing “some” or “significant” pressure from their key stakeholders to move faster on AI adoption.
The disconnect occurs when tools designed for consumer-grade tasks are applied to professional-grade work, which often contains proprietary or sensitive information that should not be shared on external servers, or highly specialized data that consumer large language models (LLMs) were never meant to process. Still, despite the obvious risks associated with using unsanctioned AI tools for high-stakes professional work, many companies are just not moving fast enough on AI adoption and, as a result, employees are taking matters into their own hands.
Understanding the Risks
For many, it’s a survival instinct. In fact, 15% of professionals in corporate enabling functions say they are already seeing financial consequences of insufficient progress on AI adoption by their companies, and another 29% say they expect them within 12 months. Pressed to continually find ways to do more with less, inundated with news about new AI tools that can do seemingly anything, and drawn-in by the allure of freely available and amazingly powerful consumer tools, it’s no surprise that many corporate tax, legal and compliance professionals would start experimenting.
The downsides of that trend are already starting to become well documented, and can include everything from lapses in corporate governance to over-reliance on incorrect or incomplete information – not to mention a lack of standardization whereby each individual employee starts using their own tool.
A New Focus on Collaboration
To address these issues, corporate enabling functions must start to make a clear case to business leadership for why they need professional-grade AI solutions. The fact is that as the AI ecosystem matures, solutions developed for professional grade tasks like corporate tax, law, compliance, and others are becoming highly specialized. These are not the mainstream, consumer-grade chatbots; they are finely tuned pieces of professional software developed for highly specific use cases. Senior leadership may have big-picture AI mandate, but they may not necessarily understand the need for specialized tools. Only the teams in the trenches can deliver that perspective, and these teams need to get a seat at the table where they can advocate for themselves.
It’s also high time for most corporate tax, legal and compliance professionals to start taking an honest look at what kinds of tools their teams are currently using – both sanctioned and unsanctioned – to determine where are AI tools already being used, where are people improvising, and where is there unmet demand.
Functions working in isolation on AI strategy are creating shared risk: inconsistent accountability, incompatible governance, and shadow AI that nobody owns. Fiduciary functions like legal, tax, and compliance hold the professional standards that should anchor the enterprise’s AI governance. While, currently, the C-suite, technology and operations teams hold disproportionate sway over AI budgets and implementation, a broader conversation is needed. The general counsel, Chief Compliance Officer and corporate tax leaders are particularly well positioned to lead this conversation – with an emphasis on what’s at stake if companies get it wrong. The time to start having that conversation is now.
