Best Practices for AI Oversight in Companies

In 2025, deploying GenAI without architecture is like shipping code without CI/CD pipelines. Most companies rush to build AI solutions and create chaos. They deploy bots, copilots, and experiments with no tracking. No controls. No standards. Smart teams build GenAI like infrastructure. They follow a proven four-layer architecture that McKinsey recommends with enterprise clients. Layer 1: Control Portal Track every AI solution from proof of concept to production. Know who owns what. Monitor lifecycle stages. Stop shadow AI before it creates compliance nightmares. Layer 2: Solution Automation Build CI/CD pipelines for AI deployments. Add stage gates for ethics reviews, cost controls, and performance benchmarks. Automate testing before solutions reach users. Layer 3: Shared AI Services Create reusable prompt libraries. Build feedback loops that improve model performance. Maintain LLM audit trails. Deploy hallucination detection that actually works. Layer 4: Governance Framework Skip the policy documents. Build real controls for security, privacy, and cost management. Automate compliance checks. Make governance invisible to developers but bulletproof for auditors. This architecture connects to your existing systems. It works with OpenAI and your internal models. It plugs into Salesforce, Workday and both structured and unstructured data sources. The result? AI that scales without breaking. Solutions that pass compliance reviews. Costs that stay predictable as you grow. Which layer is your biggest gap right now: control, automation, services, or governance?

Concerned about agentic AI risks cascading through your system? Consider these emerging smart practices which adapt existing AI governance best practices for agentic AI, reinforcing a "responsible by design" approach and encompassing the AI lifecycle end-to-end: ✅ Clearly define and audit the scope, robustness, goals, performance, and security of each agent's actions and decision-making authority. ✅ Develop "AI stress tests" and assess the resilience of interconnected AI systems ✅ Implement "circuit breakers" (a.k.a kill switches or fail-safes) that can isolate failing models and prevent contagion, limiting the impact of individual AI agent failures. ✅ Implement human oversight and observability across the system, not necessarily requiring a human-in-the-loop for each agent or decision (caveat: take a risk-based, use-case dependent approach here!). ✅ Test new agents in isolated / sand-box environments that mimic real-world interactions before productionizing ✅ Ensure teams responsible for different agents share knowledge about potential risks, understand who is responsible for interventions and controls, and document who is accountable for fixes. ✅ Implement real-time monitoring and anomaly detection to track KPIs, anomalies, errors, and deviations to trigger alerts.

✴ AI Governance Blueprint via ISO Standards – The 4-Legged Stool✴ ➡ ISO42001: The Foundation for Responsible AI #ISO42001 is dedicated to AI governance, guiding organizations in managing AI-specific risks like bias, transparency, and accountability. Focus areas include: ✅Risk Management: Defines processes for identifying and mitigating AI risks, ensuring systems are fair, robust, and ethically aligned. ✅Ethics and Transparency: Promotes policies that encourage transparency in AI operations, data usage, and decision-making. ✅Continuous Monitoring: Emphasizes ongoing improvement, adapting AI practices to address new risks and regulatory updates. ➡#ISO27001: Securing the Data Backbone AI relies heavily on data, making ISO27001’s information security framework essential. It protects data integrity through: ✅Data Confidentiality and Integrity: Ensures data protection, crucial for trustworthy AI operations. ✅Security Risk Management: Provides a systematic approach to managing security risks and preparing for potential breaches. ✅Business Continuity: Offers guidelines for incident response, ensuring AI systems remain reliable. ➡ISO27701: Privacy Assurance in AI #ISO27701 builds on ISO27001, adding a layer of privacy controls to protect personally identifiable information (PII) that AI systems may process. Key areas include: ✅Privacy Governance: Ensures AI systems handle PII responsibly, in compliance with privacy laws like GDPR. ✅Data Minimization and Protection: Establishes guidelines for minimizing PII exposure and enhancing privacy through data protection measures. ✅Transparency in Data Processing: Promotes clear communication about data collection, use, and consent, building trust in AI-driven services. ➡ISO37301: Building a Culture of Compliance #ISO37301 cultivates a compliance-focused culture, supporting AI’s ethical and legal responsibilities. Contributions include: ✅Compliance Obligations: Helps organizations meet current and future regulatory standards for AI. ✅Transparency and Accountability: Reinforces transparent reporting and adherence to ethical standards, building stakeholder trust. ✅Compliance Risk Assessment: Identifies legal or reputational risks AI systems might pose, enabling proactive mitigation. ➡Why This Quartet? Combining these standards establishes a comprehensive compliance framework: 🥇1. Unified Risk and Privacy Management: Integrates AI-specific risk (ISO42001), data security (ISO27001), and privacy (ISO27701) with compliance (ISO37301), creating a holistic approach to risk mitigation. 🥈 2. Cross-Functional Alignment: Encourages collaboration across AI, IT, and compliance teams, fostering a unified response to AI risks and privacy concerns. 🥉 3. Continuous Improvement: ISO42001’s ongoing improvement cycle, supported by ISO27001’s security measures, ISO27701’s privacy protocols, and ISO37301’s compliance adaptability, ensures the framework remains resilient and adaptable to emerging challenges.

Working with AI Agents in production isn’t trivial if you’re regulated. Over the past year, we’ve developed five best practices: 1. Secure integration. Not “agent over the top” integration - While its obvious to most you’d never send sensitive bank or customer information directly to a model like ChatGPT often “AI Agents” are SaaS wrappers over LLMs - This opens them to new security vulnerabilities like prompt injection attacks - Instead AI Agents should be tightly contained within an existing, audited, 3rd party approved vendor platform and only have access to data within that 2. Standard Operating Procedures (SOPs) are the best training material - They provide a baseline for backtesting and evals - If an Agent is trained on and follows that procedure you can then baseline performance against human agents and the AI Agents over time 3. Using AI Agents to power first and second lines of defense - In the first line, Agents accelerate compliance officer’s reviews, reducing manual work - In the second line, they provide a consistent review of decisions and maintain a higher consistency than human reviewers (!) 4. Putting AI Agents in a glass box makes them observable - One worry financial institutions have is explainability, under SR 11-7 models have to be explainable - The solution is to ensure every data element accessed, every click, every thinking token is made available for audit, and rationale is always presented 5. Starting in co-pilot before moving to autopilot - In co-pilot mode an Agent does foundational data gathering and creates recommendations while humans are accountable for every individual decision  - Once an institution has confidence in that agents performance they can move to auto decisioning the lower-risk alerts.

You’re hired as a GRC Analyst at a fast-growing fintech company that just integrated AI-powered fraud detection. The AI flags transactions as “suspicious,” but customers start complaining that their accounts are being unfairly locked. Regulators begin investigating for potential bias and unfair decision-making. How you would tackle this? 1. Assess AI Bias Risks • Start by reviewing how the AI model makes decisions. Does it disproportionately flag certain demographics or behaviors? • Check historical false positive rates—how often has the AI mistakenly flagged legitimate transactions? • Work with data science teams to audit the training data. Was it diverse and representative, or could it have inherited biases? 2. Ensure Compliance with Regulations • Look at GDPR, CPRA, and the EU AI Act—these all have requirements for fairness, transparency, and explainability in AI models. • Review internal policies to see if the company already has AI ethics guidelines in place. If not, this may be a gap that needs urgent attention. • Prepare for potential regulatory inquiries by documenting how decisions are made and if customers were given clear explanations when their transactions were flagged. 3. Improve AI Transparency & Governance • Require “explainability” features—customers should be able to understand why their transaction was flagged. • Implement human-in-the-loop review for high-risk decisions to prevent automatic account freezes. • Set up regular fairness audits on the AI system to monitor its impact and make necessary adjustments. AI can improve security, but without proper governance, it can create more problems than it solves. If you’re working towards #GRC, understanding AI-related risks will make you stand out.

In my work with organizations rolling out AI and generative AI solutions, one concern I hear repeatedly from leaders, and the c-suite is how to get a clear, centralized “AI Risk Center” to track AI safety, large language model's accuracy, citation, attribution, performance and compliance etc. Operational leaders want automated governance reports—model cards, impact assessments, dashboards—so they can maintain trust with boards, customers, and regulators. Business stakeholders also need an operational risk view: one place to see AI risk and value across all units, so they know where to prioritize governance. One of such framework is MITRE’s ATLAS (Adversarial Threat Landscape for Artificial-Intelligence Systems) Matrix. This framework extends MITRE ATT&CK principles to AI, Generative AI, and machine learning, giving us a structured way to identify, monitor, and mitigate threats specific to large language models. ATLAS addresses a range of vulnerabilities—prompt injection, data leakage, malicious code generation, and more—by mapping them to proven defensive techniques. It’s part of the broader AI safety ecosystem we rely on for robust risk management. On a practical level, I recommend pairing the ATLAS approach with comprehensive guardrails - such as: • AI Firewall & LLM Scanner to block jailbreak attempts, moderate content, and detect data leaks (optionally integrating with security posture management systems). • RAG Security for retrieval-augmented generation, ensuring knowledge bases are isolated and validated before LLM interaction. • Advanced Detection Methods—Statistical Outlier Detection, Consistency Checks, and Entity Verification—to catch data poisoning attacks early. • Align Scores to grade hallucinations and keep the model within acceptable bounds. • Agent Framework Hardening so that AI agents operate within clearly defined permissions. Given the rapid arrival of AI-focused legislation—like the EU AI Act, now defunct  Executive Order 14110 of October 30, 2023 (Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence) AI Act, and global standards (e.g., ISO/IEC 42001)—we face a “policy soup” that demands transparent, auditable processes. My biggest takeaway from the 2024 Credo AI Summit was that responsible AI governance isn’t just about technical controls: it’s about aligning with rapidly evolving global regulations and industry best practices to demonstrate “what good looks like.” Call to Action: For leaders implementing AI and generative AI solutions, start by mapping your AI workflows against MITRE’s ATLAS Matrix. Mapping the progression of the attack kill chain from left to right - combine that insight with strong guardrails, real-time scanning, and automated reporting to stay ahead of attacks, comply with emerging standards, and build trust across your organization. It’s a practical, proven way to secure your entire GenAI ecosystem—and a critical investment for any enterprise embracing AI.

Board Directors: A flawed algorithm isn’t just the vendor’s problem…it’s yours also. Because when companies license AI tools, they don’t just license the software. They license the risk. I was made aware of this in a compelling session led by Fayeron Morrison, CPA, CFE for the Private Directors Association®-Southern California AI Special Interest Group. She walked us through three real cases: 🔸 SafeRent – sued over AI tenant screening tool that disproportionately denied housing to Black, Hispanic and low-income applicants 🔸 Workday – sued over allegations that its AI-powered applicant screening tools discriminate against job seekers based on age, race, and disability status. 🔸 Amazon – scrapped a recruiting tool which was found to discriminate against women applying for technical roles Two lessons here: 1.\ Companies can be held legally responsible for the failures or biases in AI tools, even when those tools come from third-party vendors. 2.\ Boards could face personal liability if they fail to ask the right questions or demand oversight. ❎ Neither ignorance nor silence is a defense. Joyce Cacho, PhD, CDI.D, CFA-NY, a recognized board director and governance strategist recently obtained an AI certification (@Cornell) because: -She knows AI is a risk and opportunity. -She assumes that tech industry biases will be embedded in large language models. -She wants it to be documented in the minutes that she asked insightful questions about costs - including #RAGs and other techniques - liability, reputation and operating risks. If you’re on a board, here’s a starter action plan (not exhaustive): ✅ Form an AI governance team to shape transparency culture 🧾 Inventory all AI tools: internal, vendor & experimental 🕵🏽♀️ Conduct initial audits 📝 Review vendor contracts (indemnification, audit rights, data use) Because if your board is serious about strategy, risk, and long-term value… Then AI oversight belongs on your agenda. ASAP What’s your board doing to govern AI?

💡Anyone in AI or Data building solutions? You need to read this. 🚨 Advancing AGI Safety: Bridging Technical Solutions and Governance Google DeepMind’s latest paper, "An Approach to Technical AGI Safety and Security," offers valuable insights into mitigating risks from Artificial General Intelligence (AGI). While its focus is on technical solutions, the paper also highlights the critical need for governance frameworks to complement these efforts. The paper explores two major risk categories—misuse (deliberate harm) and misalignment (unintended behaviors)—and proposes technical mitigations such as:   - Amplified oversight to improve human understanding of AI actions   - Robust training methodologies to align AI systems with intended goals   - System-level safeguards like monitoring and access controls, borrowing principles from computer security  However, technical solutions alone cannot address all risks. The authors emphasize that governance—through policies, standards, and regulatory frameworks—is essential for comprehensive risk reduction. This is where emerging regulations like the EU AI Act come into play, offering a structured approach to ensure AI systems are developed and deployed responsibly.  Connecting Technical Research to Governance:   1. Risk Categorization: The paper’s focus on misuse and misalignment aligns with regulatory frameworks that classify AI systems based on their risk levels. This shared language between researchers and policymakers can help harmonize technical and legal approaches to safety.   2. Technical Safeguards: The proposed mitigations (e.g., access controls, monitoring) provide actionable insights for implementing regulatory requirements for high-risk AI systems.   3. Safety Cases: The concept of “safety cases” for demonstrating reliability mirrors the need for developers to provide evidence of compliance under regulatory scrutiny.   4. Collaborative Standards: Both technical research and governance rely on broad consensus-building—whether in defining safety practices or establishing legal standards—to ensure AGI development benefits society while minimizing risks. Why This Matters:   As AGI capabilities advance, integrating technical solutions with governance frameworks is not just a necessity—it’s an opportunity to shape the future of AI responsibly. I'll put links to the paper below. Was this helpful for you? Let me know in the comments. Would this help a colleague? Share it. Want to discuss this with me? Yes! DM me. #AGISafety #AIAlignment #AIRegulations #ResponsibleAI #GoogleDeepMind #TechPolicy #AIEthics #3StandardDeviations

The Claude 3.7 Revolution: Why AI Transformation Stalls (And How I Fix It) "Your AI strategy isn’t failing because of technology it’s failing because of how decisions get made." Claude 3.7 is making headlines. But inside Fortune 50 boardrooms where I lead transformations, AI investments are quietly stalling: • Millions spent on AI infrastructure but no real impact. • AI governance frameworks exist but slow execution to a crawl. • Executives are frustrated they’ve invested, so why isn’t AI delivering results? The Hidden AI Roadblocks in Regulated Industries > Decisions stall. McKinsey: unclear AI governance and decision rights are top barriers to implementation. > Risk is misdiagnosed. What looks like compliance hesitation is actually a lack of clear AI decision structures. > Implementation fails in silence. PwC: 70% of companies call AI a priority, but only 15% have identified roadblocks. Where AI Adoption Breaks Down • AI in regulated industries fails when governance = delay. • Executives keep the vision and delegate execution when they should keep execution accountability and delegate vision creation. This is how AI gets stuck in bureaucracy instead of driving results. How I Fix AI Decision Paralysis in Regulated Industries > Accelerated AI approvals. Governance shouldn’t mean 24-day review cycles. I help organizations establish 24-hour decision windows within compliance guardrails. > Clear AI accountability. Who approves, escalates, and acts? High-performing organizations define it upfront eliminating bottlenecks. > Front-line empowerment (within oversight). AI success happens where decisions are made, not just in governance committees. Proof? DM me. • Scaled AI-driven fraud detection by aligning decision-making with risk oversight not against it. • Structured AI approvals for faster, more accurate decision-making. • Enabled real-time AI execution while staying aligned with strict regulations. This is the exact approach I bring to organizations in finance, healthcare, and other highly regulated sectors. Are you building AI strategy for execution or just for compliance checkboxes? Let’s discuss. What is your team waiting on that could be made in 24 hours instead of 24 days?

Your AI project will succeed or fail before a single model is deployed. The critical decisions happen during vendor selection — especially in fintech where the consequences of poor implementation extend beyond wasted budgets to regulatory exposure and customer trust. Financial institutions have always excelled at vendor risk management. The difference with AI? The risks are less visible and the consequences more profound. After working on dozens of fintech AI implementations, I've identified four essential filters that determine success when internal AI capabilities are limited: 1️⃣ Integration Readiness For fintech specifically, look beyond the demo. Request documentation on how the vendor handles system integrations. The most advanced AI is worthless if it can't connect to your legacy infrastructure. 2️⃣ Interpretability and Governance Fit In financial services, "black box" AI is potentially non-compliant. Effective vendors should provide tiered explanations for different stakeholders, from technical teams to compliance officers to regulators. Ask for examples of model documentation specifically designed for financial service audits. 3️⃣ Capability Transfer Mechanics With 71% of companies reporting an AI skills gap, knowledge transfer becomes essential. Structure contracts with explicit "shadow-the-vendor" periods where your team works alongside implementation experts. The goal: independence without expertise gaps that create regulatory risks. 4️⃣ Road-Map Transparency and Exit Options Financial services move slower than technology. Ensure your vendor's development roadmap aligns with regulatory timelines and includes established processes for model updates that won't trigger new compliance reviews. Document clear exit rights that include data migration support. In regulated industries like fintech, vendor selection is your primary risk management strategy. The most successful implementations I've witnessed weren't led by AI experts, but by operational leaders who applied these filters systematically, documenting each requirement against specific regulatory and business needs. Successful AI implementation in regulated industries is fundamentally about process rigor before technical rigor. #fintech #ai #governance