Towards a Responsible AI Governance Framework-Lessons from Policy Implementation in Malaysia

Abstract

The rapid integration of Artificial Intelligence (AI) technologies across public and private sectors
has underscored the urgent need for governance frameworks that ensure ethical, transparent, and
accountable deployment. AI's economic contribution is projected to reach RM 480 billion by 2030
in Malaysia. This study employed a qualitative analysis approach to capture diverse perspectives
from government agencies, private sectors, and academia. The study examines the Malaysia’s AI
governance readiness across five critical dimensions: country governance and regulation, education
and research innovation, talent development, cultural sustainability, and facilities management. The
McKinsey 7S framework was used to analyze the readiness of AI deployment in the Malaysia’s,
highlighting the interconnectivity of 7 McKinsey elements which are strategy, structure, system,
shared values, skill, style, and staff and additional elements which are stakeholders & ecosystem,
all of which collectively influence the nation’s AI preparedness. Findings reveal that, in Malaysia,
the regulatory ambiguity remains a major challenge leading to inconsistent enforcement and
compliance gaps. Stakeholder engagement is further complicated by conflicting interests and a lack
of shared understanding of AI ethics and risks. Ethical considerations are paramount throughout the
research process. A significant strength in institutional readiness, including investment in education,
talent pools initiatives and ICT related infrastructure was identified. However, weak AI deployment
observed in heritage and cultural protection efforts and limited environmental protection initiatives
remain barriers, requiring tailored capacity-building programs and cross-sector collaboration. The
study calls for strengthened international cooperation, risk management practices, and inclusive

stakeholder engagement to ensure ethical and accountable AI deployment in diverse national socio-
economic sectors in Malaysia.