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Operating Model

Roles, responsibilities, governance structure, and operational cadence for M365 Copilot oversight.

Overview

This document defines the organizational structure, committee charter, roles, and accountability for M365 Copilot governance. It establishes who is Responsible, Accountable, Consulted, and Informed (RACI) for governance activities and defines the decision-making and escalation framework.

RACI Definitions

  • R (Responsible): Does the work
  • A (Accountable): Final approval authority (one per activity)
  • C (Consulted): Provides input and expertise before decisions
  • I (Informed): Kept updated on status after decisions

Note for Smaller Institutions

Roles may be combined based on organizational size and structure. For example, the M365 Admin may also serve as the Purview Admin, or the Compliance Officer may double as the AI Governance Lead. The RACI assignments remain the same; the individual simply holds multiple roles. Maintain adequate segregation of duties for critical controls.

Copilot Governance Committee

Purpose

The Copilot Governance Committee provides strategic oversight for M365 Copilot deployment, monitors governance effectiveness, and makes policy decisions affecting Copilot configuration and scope.

Charter

Mission: Govern the deployment, operation, and ongoing risk management of Microsoft 365 Copilot to support compliance with applicable regulations while enabling organizational productivity.

Scope:

  • Copilot deployment decisions (expansion, restriction, feature enablement)
  • Governance policy decisions (web search, plugins, Copilot Pages, declarative agents)
  • Incident review and remediation approval
  • Regulatory alignment validation
  • Governance effectiveness monitoring

Authority:

  • Approve or restrict Copilot features and scope
  • Direct remediation activities for identified governance gaps
  • Escalate material issues to executive leadership or the board
  • Commission special reviews or assessments

Composition

Role Committee Function Required/Optional
AI Governance Lead / Copilot Program Manager Chair; agenda setting, meeting facilitation Required
Chief Compliance Officer / Compliance Officer Regulatory alignment, examination readiness Required
CISO / Security Lead Security controls, incident response Required
M365 / SharePoint Admin Technical implementation status, platform updates Required
Legal / General Counsel Legal risk assessment, regulatory interpretation Required (Regulated)
Business Unit Representative User experience, business requirements Recommended
Internal Audit Independent oversight (observer) Recommended
HR / Training Lead Training compliance, user adoption Optional

Meeting Cadence

Meeting Frequency Duration Focus Attendees
Governance Committee Monthly 60 minutes Operational governance, policy decisions, incident review Full committee
Quarterly Compliance Review Quarterly 90 minutes Regulatory alignment, control effectiveness, metrics review Committee + executive sponsor
Annual Board Review Annual 30-45 minutes Strategic governance posture, annual risk assessment, investment needs Committee + board/executive leadership
Incident Review As needed 30 minutes Material incidents requiring committee attention Chair + relevant members

Standing Agenda (Monthly Governance Committee)

  1. Approval of prior meeting minutes (5 min)
  2. Copilot governance dashboard review -- metrics, control status, open items (10 min)
  3. Incident report -- any Copilot-related incidents since last meeting (10 min)
  4. Microsoft platform updates -- Copilot feature changes, new capabilities, deprecations (10 min)
  5. Policy decisions -- pending feature approvals, scope changes, configuration decisions (15 min)
  6. Regulatory update -- any regulatory changes affecting Copilot governance (5 min)
  7. Action items and next meeting planning (5 min)

RACI Matrices

Copilot Deployment Governance

Activity AI Gov Lead Compliance CISO M365 Admin Legal Board
Copilot deployment decision R A C C C I
Oversharing assessment R C C A I I
Permission remediation C I C A I I
Pilot group selection A C C R I I
Feature toggle configuration C C C A I I
Web search policy R A C C C I
Plugin/connector approval R C A C C I
Copilot expansion decision R A C C C I
User training program R C I I I I

Security and Data Protection

Activity AI Gov Lead Compliance CISO Purview Admin Entra Admin Legal
DLP policy design C C A R I I
DLP policy implementation I I C A I I
Sensitivity label taxonomy C A C R I C
Auto-labeling policies C C A R I I
Conditional access policies I I A I R I
Information barriers C A C R C C
Insider risk configuration C A C R I I

Compliance and Audit

Activity AI Gov Lead Compliance CISO Purview Admin Legal Internal Audit
Audit log retention C A C R I C
Communication compliance I A I R C I
eDiscovery configuration I C I R A I
Supervisory review program C A I R C I
Regulatory reporting C A C I C C
FINRA 2210 compliance C A I R C I
Examination preparation R A C C C C
Annual control testing C C C I I A

Operations and Monitoring

Activity AI Gov Lead Compliance CISO M365 Admin Teams Admin SharePoint Admin
Copilot feature management A C C R R I
Per-app Copilot toggles A C C R R I
Usage analytics monitoring R I I A I I
Cost tracking A I I R I I
Incident response R C A R C C
Copilot Pages governance A C C R I C
Declarative agent governance A C C R I R
Teams Copilot settings A C C I R I
Sentinel integration C C A C I I
Change management A C C R R R

Core Governance Roles

1. AI Governance Lead / Copilot Program Manager

Accountability: Copilot governance framework and deployment program

Responsibilities:

  • Governance committee chair
  • Framework administration and updates
  • Copilot deployment strategy and scope decisions
  • Feature toggle policy recommendations
  • Governance dashboard and reporting
  • Coordination across security, compliance, and operations teams
  • Vendor relationship management (Microsoft Copilot program)
  • User adoption and change management oversight

Reports to: CIO, CTO, or CISO (varies by organization)

2. Chief Compliance Officer / Compliance Officer

Accountability: Regulatory alignment and compliance effectiveness

Responsibilities:

  • Regulatory mapping and interpretation for Copilot
  • Communication compliance program oversight
  • Supervisory review procedures (FINRA 3110, 2210)
  • Examination preparation and response coordination
  • Compliance monitoring and reporting
  • Policy violation investigation
  • Training requirements definition

3. Chief Information Security Officer (CISO)

Accountability: Information security program, including Copilot security controls

Responsibilities:

  • DLP policy strategy and approval
  • Conditional access and identity governance
  • Incident response for Copilot-related security events
  • Insider risk management
  • Security monitoring (Sentinel, Defender)
  • Plugin and connector security assessment
  • Board-level security reporting

4. M365 / Purview Administrator

Accountability: Technical implementation and operation of Copilot governance controls

Responsibilities:

  • Copilot feature toggle configuration
  • DLP policy implementation and tuning
  • Sensitivity label deployment
  • Audit log configuration and retention
  • Communication compliance policy setup
  • eDiscovery configuration
  • Purview dashboard monitoring
  • Platform update assessment and testing

5. SharePoint Administrator

Accountability: SharePoint governance for Copilot data access

Responsibilities:

  • Oversharing assessment and remediation
  • Site permissions and access governance
  • Restricted SharePoint Search configuration
  • External sharing controls
  • Declarative agent site governance
  • Access review coordination for SharePoint
  • Site lifecycle management

6. Entra / Identity Administrator

Accountability: Identity and access security for Copilot users

Responsibilities:

  • Conditional access policy implementation
  • Access review campaigns
  • User provisioning and Copilot license assignment
  • MFA enforcement
  • Privileged access management
  • Identity governance reporting

7. Teams Administrator

Accountability: Teams-specific Copilot controls

Responsibilities:

  • Meeting transcription policies
  • Teams Copilot feature management
  • Meeting policy configuration
  • Teams communication compliance
  • Teams channel governance

Accountability: Legal risk and regulatory obligations

Responsibilities:

  • Regulatory interpretation for Copilot use cases
  • eDiscovery legal hold management
  • Privacy impact assessment
  • Customer disclosure requirements
  • Vendor agreement review (Microsoft DPA)
  • Fair lending compliance oversight (if applicable)
  • Examination response legal review

9. Internal Audit

Accountability: Independent control testing and assessment

Responsibilities:

  • Annual control effectiveness testing
  • Governance procedure testing (FINRA 3120 alignment)
  • Compliance monitoring validation
  • SOX 404 assessment (if applicable)
  • Audit reporting to board/audit committee
  • Finding follow-up and remediation tracking

Escalation Procedures

Escalation Levels

+------------------------------------------------------------------+
|                    ESCALATION FRAMEWORK                            |
|                                                                    |
|  LEVEL 1 (Operational)         LEVEL 2 (Management)               |
|  +------------------------+   +------------------------+          |
|  | M365 Admin / Purview   |   | AI Governance Lead     |          |
|  | Admin                  |   | + Compliance Officer   |          |
|  |                        |   | + CISO                 |          |
|  | - Policy violations    |-->| - Repeated violations  |          |
|  | - Configuration issues |   | - Potential regulatory  |          |
|  | - User reports         |   |   exposure              |          |
|  | - Minor incidents      |   | - Security incidents    |          |
|  +------------------------+   +----------+-------------+          |
|                                          |                         |
|                                          v                         |
|  LEVEL 3 (Executive)          LEVEL 4 (Board)                     |
|  +------------------------+   +------------------------+          |
|  | CIO/CTO + CCO + CISO   |   | Board / Audit          |          |
|  | + General Counsel       |   | Committee              |          |
|  |                        |   |                        |          |
|  | - Material incidents   |-->| - Regulatory violations |          |
|  | - Regulatory inquiries |   | - Material breaches     |          |
|  | - Significant exposure |   | - Examination findings  |          |
|  | - Legal matters        |   | - Strategic decisions   |          |
|  +------------------------+   +------------------------+          |
|                                                                    |
+------------------------------------------------------------------+

Escalation Triggers

Level Trigger Response Time Examples
Level 1 Operational issue, policy violation < 24 hours DLP alert, user complaint, configuration drift
Level 2 Management attention required < 8 hours Repeated violations, potential data exposure, security alert
Level 3 Executive attention required < 4 hours Regulatory inquiry, material incident, significant compliance gap
Level 4 Board notification required < 24 hours Regulatory violation, customer data breach, examination finding

Escalation Procedures by Type

Data Exposure Incident:

  1. M365 Admin contains the exposure (disable Copilot for affected user/scope if needed)
  2. CISO assesses scope and impact
  3. Compliance Officer evaluates regulatory reporting obligations
  4. Legal assesses notification requirements
  5. AI Governance Lead coordinates remediation
  6. Governance committee reviews at next meeting (or special session if material)

Regulatory Inquiry:

  1. Compliance Officer receives and logs the inquiry
  2. AI Governance Lead provides technical documentation
  3. Legal reviews all responses before submission
  4. CISO provides security-related evidence
  5. Governance committee briefed within 24 hours
  6. Board notified if examination or enforcement action

Decision Authority Matrix

Decision Authority Consultation Required Board Notification
Enable Copilot for new department AI Governance Lead Compliance, CISO No
Disable Copilot feature (web search, plugin) AI Governance Lead Compliance No
Approve new plugin or connector CISO Compliance, Legal No
Change DLP policy CISO Compliance No
Change retention policy Compliance Officer Legal No
Disable Copilot tenant-wide (emergency) CISO AI Governance Lead Yes (post-action)
Expand Copilot beyond pilot Governance Committee All members Yes
Respond to regulatory examination Compliance Officer Legal, AI Governance Lead Yes
Approve Copilot for customer-facing use Governance Committee Legal, CISO Yes
Change supervisory review procedures Compliance Officer Legal No

Integration with Existing IT Governance

M365 Copilot governance should integrate with, not replace, existing IT governance structures:

IT Governance Alignment

Existing Structure Copilot Integration Point
IT Risk Committee Copilot risk assessment results reported quarterly
Change Advisory Board (CAB) Copilot configuration changes follow existing change management
Information Security Committee Copilot security controls reviewed as part of security program
Data Governance Committee Oversharing remediation, data classification for Copilot
Vendor Management Program Microsoft Copilot included in vendor risk assessments
Incident Response Team Copilot-related incidents follow existing IR procedures
Internal Audit Program Copilot controls included in annual audit plan
Records Management Program Copilot interaction retention aligned with records schedule

Governance Integration Approach

  1. Do not create a standalone Copilot governance silo -- integrate into existing structures
  2. The Copilot Governance Committee is a working group, not a replacement for existing committees
  3. Copilot controls map to existing control frameworks (NIST CSF, ISO 27001, COBIT)
  4. Reporting flows through existing channels -- the Copilot Governance Committee provides input to existing risk and compliance reporting

Training Requirements

Role Training Topic Frequency Delivery
All Copilot users Copilot usage guidelines, FSI-specific restrictions, data handling Annual + at Copilot enablement LMS / in-person
Supervisors/Managers Supervisory obligations for Copilot-assisted work Annual LMS / in-person
M365 Admins Copilot governance controls, Purview configuration, audit procedures Annual + as-needed Technical training
Compliance team Copilot regulatory alignment, communication compliance, examination readiness Annual + as-needed Specialized training
Governance committee Framework updates, regulatory changes, governance effectiveness Annual (at annual review) Committee session
Board/Executive Copilot governance overview, key metrics, risk posture Annual (at board review) Briefing

Governance Artifacts

Required Documentation

Artifact Owner Review Frequency Retention
Copilot Governance Policy AI Governance Lead Annual Current + 7 years
Written Supervisory Procedures (Copilot) Compliance Officer Annual Current + 7 years
Copilot Deployment Documentation M365 Admin Continuous Current + 3 years
DLP Policy Documentation CISO Quarterly Current + 3 years
Governance Committee Minutes AI Governance Lead Per meeting 7 years
Quarterly Compliance Reports Compliance Officer Quarterly 7 years
Annual Governance Assessment AI Governance Lead Annual 7 years
Incident Reports (Copilot-related) CISO Per incident 7 years
Training Completion Records HR Continuous 7 years

FSI Copilot Governance Framework v1.2.1 - March 2026