AI Governance and Risk Management

The increasing pace of AI development raises discussions related to ethics, transparency, accountability, and compliance of AI. Use this scorecard template as a starting point to build a governance dashboard for AI.

An example of AI governance dashboard.

An example of the dashboard for AI governance and risk management. Source: View AI Governance Scorecard. online in BSC Designer AI Governance Scorecard..

Establish Internal AI Controls

AI Governance: Review of Scorecard Template
Automating Internal Controls with Functional Scorecards

Functional Scorecard

In the strategy deployment system, we defined the strategic and functional/supporting scorecards.

Strategy Deployment System - Step 2 - Decomposition into strategic and functional scorecards
Strategy Deployment System - Supporting GRC scorecards

While AI as a technology can form a part of strategic goals, we consider the AI governance scorecard to be a functional or supporting scorecard.

Customization of the Template

The template includes generic metrics and examples of initiatives for the AI governance scorecard. Similar to other business domains, we don’t recommend re-using the template without modifications. All companies are unique, so our recommendation is to use the template as a starting point for your analysis, adapting it to the reality of your organization.

If your company is in the early stages of adopting AI technologies, check out this AI readiness scorecard.

Themes of the Scorecard

The example template of the AI Governance and Risk Management scorecard organizes goals and metrics according to these themes:

  • Ethical AI Development and Use
  • Transparency for the Stakeholders
  • Accountability Policies
  • Compliance
  • Continuous Monitoring and Evaluation

Themes of the AI Governance Scorecard Template.

Themes of the AI Governance Scorecard Template. Source: View AI Governance Scorecard. online in BSC Designer AI Governance Scorecard..

There is no one accepted standard of AI governance; once you have a template in your account, feel free to customize the themes according to your needs.

Identify Risks

A scorecard template includes some goals and initiatives. To have a balanced view of the AI governance landscape, we need to define the risks.

For example, the template includes “Inherent Bias in Training Data” aligned with the “Minimize Bias in AI Systems” goal in Ethical AI Development and Use.

An example of the inherent bias risk in the AI governance scorecard.

An example of the inherent bias risk in the AI governance scorecard Source: View AI Governance Scorecard. online in BSC Designer AI Governance Scorecard..

Visualization

The template includes an example of an AI governance dashboard that features some key metrics, a risk heat map, individual risk diagrams, and diagrams with the list of goals and initiatives.

Edit setup of the risk diagram

Edit setup of the risk diagram. Source: View AI Governance Scorecard. online in BSC Designer AI Governance Scorecard..

This dashboard is fully customizable and can be powered with data from the indicators of the scorecard.

Upload Evidence

The metrics in the template have some basic configurations that can be adapted to more complex needs and workflows. For example, a typical case is when a certain reporting standard requires attaching evidence.

An example of a KPI configured to react to uploaded evidence documents.

An example of a KPI configured to react to uploaded evidence documents. Source: View AI Governance Scorecard. online in BSC Designer AI Governance Scorecard..

This can be automated using the evidence formula. For example, we can activate it for the indicator “Number of accountability audits conducted per year” aligned with “Regular Accountability Audits,” so that the indicator would change its value when a new audit report is uploaded.

Automate Evidence Tracking in a GRC Scorecard with Controls

Controls Library

Some indicators in the template imply the existence of certain controls. For example, “Develop and Implement Incident Response Plans” aligned with the “Accountability” category implies the existence of the response plans.

An example of the library of GRC controls

In addition to having plans in textual form, we can organize them as specific controls in the library of controls. In case of an incident, such controls can be easily activated.

Automating Internal Controls with Functional Scorecards

Continuous Monitoring

One of the themes of AI governance is continuous monitoring of the state of AI. Most of the metrics from the scorecard template imply the need for continuous monitoring.

Continuous Monitoring of KPIs in BSC Designer

For example, the “Audit Compliance Rate” indicator aligned with “Regular Accountability Audits” is configured for monthly updates and has data for the reporting periods.

The Values Editor with the settings for the Audit Compliance Rate indicator.

The Values Editor with the settings for the Audit Compliance Rate indicator. Source: View AI Governance Scorecard. online in BSC Designer AI Governance Scorecard..

The update intervals, as well as the behavior of the indicator for the periods when specific data is not available, can be configured via the Values Editor.

Ownership

In the “Transparency” theme, we underline the need to assign owners to certain AI controls and make the AI mechanics transparent for the stakeholders.

Use the “Owner” field for the metrics to assign owners and stakeholders. This will facilitate the reporting of the scorecard and ensure that owners receive notifications about relevant updates for the goals, indicators, and initiatives.

Reporting

Regular reporting on schedule can be introduced to keep the key stakeholders informed. Below are examples of reports in PDF format that can be generated using the AI governance scorecard.

Alignment with Other Scorecards

Some indicators in the scorecard template can be aligned with other scorecards. For example, the “Time to Incident Resolution” aligned with the “Monitor AI systems for security vulnerabilities and threats” goal can obtain its data directly from the “Cybersecurity” functional scorecards.

An Example of Aligning PESTEL Analysis with an AI Governance Scorecard

Getting Started

Users of BSC Designer can access the template directly from their account:

  1. Create a free account with BSC Designer
  2. Navigate to New > New scorecard > More templates
  3. Find the “AI governance” template
What's next?
  • Sign up for a free account at BSC Designer to access the scorecard templates, including 'AI Governance Scorecard' discussed in this article.
  • Follow our “Strategy Strategy Deployment System to align stakeholders, strategic ambitions, and business frameworks into a comprehensive strategy.

More About Strategic Planning

Strategic Planning Process:
BSC Designer software will support your team on all steps of strategic planning.
Examples of the Balanced Scorecard:
Examples of the Balanced Scorecard with KPIs
Strategy Maps:
8 Steps to Create a Strategy Map By BSC Designer
Cite as: Alexis Savkín, "AI Governance and Risk Management," BSC Designer, June 12, 2024, https://bscdesigner.com/ai-governance.htm.

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