Digital transformation and artificial intelligence (AI) are reshaping every industry. With opportunity comes risk: data breaches, algorithmic bias, regulatory uncertainty, and disruption to core processes.
Boards today face a challenge: how to govern these risks without drowning in technical detail. The solution lies in quantifying digital and AI risks in a way that aligns with strategy, risk appetite, and long-term resilience.
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Compliance beyond the detail
Boards should not be buried in the technical metrics of IT frameworks like ISO 27001 or NIST CSF. These frameworks are essential for implementation teams, but directors need the big picture:
- Are we broadly aligned with these standards?
- Where are the material gaps?
- What does this mean for our ability to protect value?
By keeping the conversation at this level, boards can focus on governance and accountability. Detailed control testing still matters, but it should be reported through a structured, enterprise-wide view that shows effectiveness against objectives rather than lists of technical tasks.
Protecht supports this by centralising IT risk and control libraries and mapping them across frameworks. This allows CISOs and risk teams to streamline the details, while boards see a simple view of where compliance strengthens resilience and where gaps could threaten strategy.
Moving beyond box-ticking
Compliance can too easily become a box-ticking exercise: evidence of activity rather than evidence of resilience. Boards should encourage management to go further.
Smarter governance models embed risk culture into processes and decision-making. This means testing whether controls work under pressure, not just whether they exist on paper. With AI risks emerging unpredictably, resilience must be designed into the organisation.
Here, Protecht’s controls management and assurance capabilities provide a single source of truth. Rather than static spreadsheets or disconnected registers, organisations can link risks, obligations, and incidents to controls, track assurance activities, and demonstrate resilience beyond box-ticking compliance.
Risk appetite for digital and AI
Boards set strategy by balancing risk against reward. In digital and AI, this balance is sharper than ever. AI can unlock efficiency, productivity, and new business models, but it also brings novel risks, from bias in algorithms to systemic failures.
By defining a risk appetite for digital and AI, boards make explicit where they are willing to take bold steps and where stronger guardrails are required. Importantly, AI touches every objective – growth, customer experience, operational efficiency – so risk appetite cannot be a side note. It must sit at the heart of strategy.
Protecht enables boards and executives to monitor key risk indicators (KRIs) tied to appetite. These provide early insight into whether digital and AI risks are within tolerances, or if additional investment in controls is needed.
A process-based view
Digital and AI risks do not live in silos. They touch customer onboarding, supply chain management, product development, and more. Directors should ask:
- How resilient are our processes if a digital risk manifests?
- Where are the dependencies and single points of failure?
- Can automation reduce exposure?
Protecht’s process-based registers and dashboards map digital and IT risks across the organisation. This makes it easier to assess where risks intersect, which controls cover multiple processes, and where vulnerabilities remain.
Risk and resilience operating models
An effective digital risk approach integrates vertical deep dives into specific risks with horizontal resilience views across processes. This dual perspective reveals weaknesses wherever they may occur.
Protecht delivers this integration. Risk teams can deep-dive into controls for ISO 27001 or NIST CSF while boards see a horizontal view of how risks and controls operate across the enterprise. By comparing this against the board’s risk appetite, directors gain clarity on where additional controls or investments are required.
Closing the AI governance gap
AI governance can no longer be optional. An IBM study found that 63% of organisations lack formal AI governance, and that 97% of AI-related breaches occurred where access controls were missing[1].
Boards must ask:
- Do we have clear AI policies and accountability?
- Are reporting lines transparent?
- Is access to AI tools controlled and monitored?
Without this, organisations risk falling behind in compliance and in trust. Protecht supports AI governance by embedding structured accountability, control testing calendars, and transparent reporting, ensuring that risks tied to emerging technology are visible, owned, and managed.
Linking to corporate governance
In the UK, this approach directly supports boards in meeting Provision 29 of the Corporate Governance Code, which requires directors to monitor the effectiveness of risk management and internal controls.
This duty is not directly required in Australia or New Zealand, but it is likely that regulators will increasingly follow the UK CGC model when holding boards responsible.
A platform like Protecht makes your risk reporting demonstrable. Boards gain structured reporting on control effectiveness, assurance activities, and compliance posture, ensuring oversight is evidence-based and aligned with governance obligations.
Smarter controls and metrics
The speed of digital risk demands smarter, proactive controls. Preventative or early-detection measures are critical:
- Automated controls and continuous monitoring
- Regular control testing
- KRIs linked to risk appetite
Controls alone are not enough. Boards need visibility into whether controls work. Protecht provides dashboards that surface performance trends, highlight emerging weaknesses, and connect control health to strategic objectives.
Conclusions and next steps for your organisation
Boards do not need to be technology experts to govern digital and AI risk effectively. They need a clear, quantified, and strategic view:
- Are we compliant at the right level?
- Is risk appetite defined and applied to digital transformation?
- Do processes and controls make us resilient in the face of disruption?
By answering these questions, boards can steer organisations through digital change with confidence, seizing opportunities while managing risks responsibly.
Protecht helps make this possible by centralising IT risk frameworks, linking controls to business processes, and providing board-ready reporting on resilience.
Ready to see how Protecht ERM simplifies digital and AI risk governance? Request a demo today:
Reference
[1] IBM, The State of AI Governance 2023: https://www.ibm.com/reports/ai-governance