Delegation by Design

A conversational system proposes. An agentic system can act: retrieve records, update systems, communicate externally, make recommendations, initiate transactions or chain tools across a workflow. The board question is therefore no longer limited to whether an output is accurate. It is whether the organisation has intentionally granted the system the right to act, within boundaries proportionate to the consequence of failure.

Scaled agent deployment remains early. Stanford’s 2026 evidence synthesis reports that most business functions still show no agent use and scaled deployment remains in single digits across almost every function. This is a governance window. Organisations can establish identity, authority, evaluation and incident architecture before informal delegation hardens into infrastructure. ¹

The Institute proposes delegation by design: capability does not confer authority; authority is decomposed into specific rights; each right is bounded by context, value, time and consequence; and additional autonomy is earned through operating evidence. The goal is not to prevent agents from acting. It is to make speed safe enough to use.

Agentic authority becomes manageable when it is decomposed. Read is permission to retrieve defined data. Write is permission to create or alter records. Communicate is permission to represent the organisation to a person or external system. Decide is permission to select among consequential options. Spend is permission to commit money or commercial terms. Execute is permission to trigger an operational or technical action.

These rights are not a maturity ladder. A low-risk agent may read and write extensively inside a sandbox but never communicate externally. Another may communicate approved status updates but cannot alter the system of record. A procurement agent might prepare a decision while spend authority remains human. The design objective is least authority for the intended outcome.

Every right needs a scope: the identity under which the agent acts; the data, system and transaction class; the maximum value or volume; the permitted time window; the required approval; the evidence retained; and the recovery action. NIST’s 2026 work on software-agent identity and authority highlights why conventional identity and access controls must be adapted when software can act with increasing independence. ²

An authority budget states how much consequential action a system may take before human approval or automatic suspension. It can be expressed through transaction value, customer count, data sensitivity, external reach, irreversibility, cumulative action or time. The budget should shrink as uncertainty, privilege and consequence rise.

The maximum blast radius is the plausible harm before detection and containment. It is shaped by action speed, tool connectivity, permission breadth, monitoring delay and recoverability. A single incorrect draft has a small radius. An agent with access to a customer database, outbound messaging and refund authority can create compounding harm in minutes.

Controls must therefore work at machine speed. Rate and value limits, allow-listed tools, scoped credentials, separation of duties, approval checkpoints, anomaly detection and circuit breakers are more reliable than a policy instruction inside a prompt. Human review should be placed where consequence or ambiguity is highest, not indiscriminately added after every step.

Australia’s Information Security Manual now calls for human approval of organisationally defined risky AI actions and monitoring against behavioural and performance baselines. NIST’s GenAI profile similarly emphasises threat modelling, testing, monitoring, acceptable-use boundaries and incident response. ³⁴

The control plane is the operating system that makes AI use visible and governable. It has eight functions: discover, register, classify, test, approve, monitor, respond and retire. The same workflow should cover vendor features, embedded models, employee-built automations and centrally developed agents; otherwise authority migrates to the least visible channel.

Discovery identifies AI-enabled systems and material changes. Registration records purpose, owners, rights, data, dependencies and evidence. Classification determines consequence and control intensity. Testing evaluates task performance, failure modes, security and human interaction in context. Approval grants a defined authority budget, not a permanent licence.

Monitoring compares behaviour, performance and incidents with approved baselines. Response assigns the ability to interrupt, contain, investigate, notify and learn. Retirement revokes credentials, preserves required records and removes dormant integrations. Australia’s 2025 guidance and 2026 public-sector policy updates reinforce accountable ownership, impact assessment, monitoring, incident processes and use-case registers as operating practices. ⁵⁶

A board should ask for evidence from this system: the population of material agents, rights granted, exceptions, control performance, incidents, authority expansions and retirements. A policy completion percentage is not evidence that delegation is controlled.

Prompt injection is not only an output-quality problem. Instructions can enter through retrieved documents, websites, messages or tool responses and steer a connected system toward unintended behaviour. The more systems and rights an agent can access, the more a language-layer failure can become an operational event. ⁴

Identity ambiguity compounds the problem. Teams need to distinguish the human sponsor, service identity, model, agent configuration and downstream action. Logs must show who authorised the deployment, which identity acted, what context and tools were available, what the system decided, which approvals occurred and what changed as a result.

Evaluation must include adversarial and operational conditions: missing or conflicting data, malicious content, ambiguous requests, tool failure, approval timeout, repeated actions, privilege escalation and recovery. A high task-success score is insufficient if rare failures are irreversible or invisible.

Incidents should be treated as a learning system. The OECD’s common reporting framework proposes shared criteria for describing AI incidents across sectors and jurisdictions. Internally, near misses are equally valuable because they reveal control weakness before harm crosses a reporting threshold. ⁷

First, define which decisions and actions remain non-delegable. Second, approve the rights taxonomy and authority-budget principles. Third, set materiality thresholds for board and executive visibility. Fourth, require a single accountable business owner for every material agentic workflow.

Fifth, approve the minimum evidence for expanding authority: task performance, control effectiveness, monitoring, identity, recovery and incident readiness. Sixth, define who can suspend an agent and under what conditions. Seventh, agree how customers, workers, regulators and partners will be informed when an agent materially represents or affects them.

These are operating-model decisions, not merely technical standards. They determine how responsibility flows when actions are produced by a chain of people, models, tools and systems. Management can design the controls; the board must ensure authority and accountability remain aligned.

In the first 30 days, identify material agentic and tool-connected AI use. Map the six rights, service identities, data access, approvals and plausible blast radius. Suspend or narrow any use case whose authority cannot be reconstructed.

By day 60, define authority budgets, classification criteria and minimum evidence. Test one material workflow under adverse conditions, including indirect prompt injection, tool failure, repeated action, approval failure and emergency suspension. Confirm that logs support forensic reconstruction.

By day 90, bring the board a delegation register: material systems, owners, rights, authority limits, evidence status, incidents and unresolved exceptions. Expand authority for one use case that meets the standard, constrain one that does not, and exercise the organisation’s ability to interrupt and recover.