Risk Management
Why this function belongs in the AI Operating Model
Not all AI initiatives are equally risky: an internal document assistant and an automated customer decision are different worlds. The AI Operating Model relies on the principle of routing by risk level (BCG): simple cases go down a lightweight self-service track, medium ones through trust-but-verify, significant ones through strategic review, and impermissible ones are prohibited. Someone has to assign the initiative a risk profile and determine its route. That is the role of risk management.
The risk function doesn't duplicate InfoSec and legal; it aggregates their opinions into a single assessment and links it to the corporate risk appetite.
Where it engages
| AI Operating Model stage | Role of risk management |
|---|---|
| Assessment | Assigns a risk rating and approval route for the initiative |
| Before production | Checks that residual risks are within appetite, locks in controls |
| In support | Monitors materialized risks, incidents, model drift |
| Portfolio | Rolls AI risks up into the company's overall risk profile |
What the function receives as input
- The scenario, impact on customers, processes, and finances.
- InfoSec opinions (threats) and legal opinions (regulation) as inputs.
- Data on process criticality and the reversibility of the AI's decisions.
What the function delivers as output
- The initiative's risk rating and approval route through the funnel.
- A list of mandatory controls (human-in-the-loop, limits, kill switch).
- A decision within risk appetite: proceed, restrict, or stop.
Key touchpoint artifacts
- Initiative risk profile — rating, route, key risks and controls.
- Routing matrix — mapping risk level to the line of approval.
- AI risk register — a portfolio view of the risks of all initiatives and products.
Anti-patterns
- One heavy committee for everything. Low-risk cases go through the same heavy review as critical ones — the funnel clogs up.
- Risk assessment without controls. The risk is recorded, but no compensating measures and monitoring are assigned.
- No monitoring in production. The risk is assessed once at intake and forgotten, ignoring model drift and new incidents.