What does AI governance actually include?

A self-contained AI policy, an approved-tools list, an employee certification, and a staff training program, all built around a data classification that is keyed to authorization rather than document type. It is the set of controls a cyber insurer, an enterprise client, a SOC 2 auditor, or a regulator expects to see when they ask how you control AI.

What is the GREEN, YELLOW, RED classification?

It is a data classification that decides what AI tools can touch which information, keyed to authorization rather than just document type. The question is not only what kind of document it is, but whether a protective order, a court order, or a client commitment governs the material. That distinction is what makes the policy defensible rather than generic.

We are a small firm. Is this overkill?

Smaller firms often have less IT oversight, which means AI adoption happens faster and with less governance, so the exposure is real regardless of size. The right-sized version of this is not a 40-page binder. It is a clear policy, a short approved-tools list, and a 20-minute training conversation that staff will actually follow.

Governance that survives an examination, not a binder nobody reads.

Q: Will this hold up in an examination?

That is the design target. We established conservative AI governance for an SEC-registered investment adviser specifically to survive examination: tightly scoped tool permissions, the GREEN, YELLOW, RED model, and AI features disabled or restricted where compliance risk outweighs convenience. The same patterns now carry across other regulated clients.

For a regulated firm, the bar is conservative AI governance that holds up when an auditor or an examiner asks how you control it. That means a policy, an approved-tools list, a certification, and training, all keyed to a data classification built around authorization.

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GREEN / YELLOW / RED

data classification keyed to authorization, not just document type

Examination

the bar we design to, not just internal policy

20 min

the training that staff will actually follow, not a 40-page binder

Most AI policies are written for a document type. The risk is in the authorization.

A generic AI policy sorts data by what kind of document it is. That is not enough for a regulated or litigation-exposed firm, because the same kind of document can carry very different obligations depending on whether a protective order, a court order, or a client commitment governs it. A policy that ignores that distinction will not hold up when it matters.

Our GREEN, YELLOW, RED classification is keyed to authorization. It tells your team, and an auditor, exactly which AI tools can touch which material and why. That is the difference between a policy that looks complete and one that actually is.

What an AI governance engagement delivers

Four parts that work together, sized to your firm.

A policy keyed to authorization

A self-contained AI acceptable-use policy built around a GREEN, YELLOW, RED classification that asks not just what a document is, but whether a protective order, a court order, or a client commitment governs it.

An approved-tools list

A clear list of which AI tools are permitted for which classes of data, with tightly scoped permissions and features disabled or restricted where compliance risk outweighs convenience.

Certification and training

An employee certification and a staff training program that make the policy something people understand and follow, not a document filed away and forgotten.

Audit and examination readiness

Governance designed with compliance and legal from the start, so it answers the questions a SOC 2 auditor or a regulatory examiner will actually ask.

In practice

AI governance for an SEC-registered investment adviser

For a regulated adviser, we established conservative AI governance designed to survive examination: tightly scoped tool permissions, the GREEN, YELLOW, RED classification, and AI features disabled or restricted where compliance risk outweighed convenience.

Those patterns are now reused across other regulated clients. The governance is paired with the infrastructure, so the policy is not aspirational. It matches what the firm can actually do.

Need governance that holds up under scrutiny?

A short call is enough to tell you where your current AI governance has gaps and what a right-sized program would cover for your firm.

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Where client data is leaving your environment through public AI tools
Whether your AI controls would survive a SOC 2 audit or an examination
Where a human, not the model, needs to ratify the output

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Common questions

AI for financial services firms

Conservative governance and private infrastructure for SEC-registered advisers.

AI governance for SEC-registered investment advisers

What conservative, examination-ready governance looks like.

Make your AI governance examination-ready.

Start with a 30-minute call. We will tell you honestly where your governance stands and what it would take to close the gaps.