Governance for Copilot Studio

Overview

Copilot Studio puts the power to build AI agents in the hands of people across your organization. That is the entire value proposition of a low-code platform—it democratizes building. But in government environments, democratized building without governance creates real risk. Agents can access organizational data, connect to external services, and interact with users, all without IT involvement if controls are not in place.

This video walks you through a practical governance framework for Copilot Studio that enables innovation while maintaining the control and compliance your agency requires.

What You’ll Learn

• Why governance matters: The specific risks of ungoverned agent creation in government
• Creation controls: How to manage who can build agents and where they build them
• Review processes: How to implement lightweight but effective approval workflows
• Monitoring: How to track agent usage, enforce compliance, and maintain visibility

Script

Hook: Who’s building agents in your org?

Copilot Studio makes it easy to build AI agents. That is the promise—and the governance challenge.

Without controls, anyone with a license can create an agent that accesses organizational data, connects to external services, and interacts with users. In a commercial organization, that is a risk management conversation. In government, it can be a compliance issue with real consequences.

Do you know how many agents exist in your tenant right now? Do you know what data they access? Do you know who built them?

In the next ten minutes, I will walk you through a practical governance framework for Copilot Studio that answers those questions and gives you the controls to manage this platform responsibly.

Why governance matters for low-code AI

Low-code platforms democratize building. That is the entire point. But they also distribute risk in ways traditional IT governance was not designed to handle.

Consider what an agent built by a program office can do. It can access SharePoint document libraries. It can call external APIs through connectors. It can respond to users in Microsoft Teams. And it can do all of this without ever passing through IT or security review.

Without governance, several things happen. Agents may access data they should not have visibility into. Agents may provide incorrect or outdated information because nobody verifies the content. There is no audit trail of what agents exist or what they do. And teams across the organization may build redundant agents solving the same problem because nobody is tracking what already exists.

In government, the stakes are higher. Unauthorized data sharing can violate compliance frameworks. An agent that surfaces controlled unclassified information to users who should not see it is a security incident. Shadow AI—agents built and deployed outside of IT awareness—creates blind spots that auditors and inspectors general will ask about.

Governance is not about blocking innovation. It is about enabling it safely. The goal is a framework where people can experiment, build, and deploy agents while maintaining the visibility and control your agency needs.

Controlling who can create agents

The first layer of governance is controlling who can create agents and where they create them.

The Power Platform admin center is your primary tool. At the environment level, you control who has permission to create resources, including Copilot Studio agents. By default, anyone with a Copilot Studio license can create agents in the default environment. That is almost certainly not what you want in a government tenant.

Start by restricting agent creation to specific security groups. In Entra ID, create security groups that define who can build agents. Assign these groups the appropriate roles in the Power Platform admin center. This gives you a clear, auditable record of who has maker permissions.

Your environment strategy is equally important. Provide a sandbox environment where anyone with a license can experiment. This is where people learn, prototype, and test ideas. Make the sandbox easy to access—if people cannot get to a sandbox, they will build in production instead, which is worse.

For production environments, require governance approval before granting maker access. Production is where agents interact with real users and real data, and that requires a higher standard of review.

Control Copilot Studio maker permissions explicitly. The maker role determines who can create and edit agents. Do not grant this broadly in production environments. Use a request and approval process so you maintain awareness of who is building what.

In government clouds, use Entra ID security groups to control maker access. Create separate groups for sandbox makers and production makers. This gives you clear visibility into who can build what, and it aligns with your agency’s access control policies. You can also layer Conditional Access policies on top to restrict agent creation to managed devices or specific network locations.

A practical tip: do not over-restrict the sandbox. If people cannot experiment freely in a safe space, they will find workarounds. Make the sandbox the path of least resistance and save the controls for production.

Review and approval processes

The second layer is a review process that agents must pass before going live in production.

Establish a lightweight review process. The emphasis is on lightweight—a heavy process that takes weeks will be circumvented. A focused review that takes a day or two will actually be followed.

What to review when an agent is submitted for production:

First, data sources. What SharePoint sites, Dataverse tables, or external systems does the agent access? Does it have access to more data than it needs?

Second, connectors and external services. Does the agent connect to any external APIs or third-party services? Are those services authorized for use in your government cloud?

Third, authentication configuration. How does the agent authenticate users? Is the configuration aligned with your tenant’s identity policies?

Fourth, compliance with organizational policies. Does the agent comply with your agency’s acceptable use policies, data handling requirements, and information governance standards?

Fifth, content accuracy and tone. Is the information the agent provides accurate and current? Does the agent’s communication style align with your agency’s standards?

Who reviews matters. Designate specific agent reviewers. This could be IT staff, security analysts, or members of a Center of Excellence for Power Platform. The key is that someone with the right expertise looks at the agent before it goes live.

Implement the process using Power Platform solution management. Solutions provide a structured way to package and move agents between environments. Require agents to move from a development environment to production through a managed process—not by recreating them manually.

Federal agencies often have Authority to Operate or ISSO review requirements. Integrate your agent review process with your existing security review workflow. An agent that accesses controlled unclassified information, for example, needs the same scrutiny as any other system that handles controlled information. Do not create a separate process when you can extend what already exists.

Monitoring agent usage and compliance

The third layer is ongoing monitoring. Governance is not a one-time gate—it is continuous oversight.

The Power Platform admin center gives you a tenant-wide view of all agents across all environments. You can see which agents exist, who created them, when they were last modified, and which environment they are in. This is your inventory, and you should review it regularly.

Tenant-level analytics provide deeper insight. You can track agent sessions, user interactions, and which connectors agents are using. This data tells you not just what agents exist, but how actively they are being used and what data they are touching.

DLP policy enforcement is critical. Data Loss Prevention policies control which connectors agents can use and how data can flow between them. If an agent uses a connector that violates DLP policy, the connector action is blocked at runtime. We will cover DLP for agents in detail in a separate video, but the key governance point is: make sure your DLP policies cover Copilot Studio.

Audit logging provides the compliance record. Copilot Studio activities are captured in the Microsoft 365 unified audit log. This includes agent creation, modification, publishing, and deletion events. Your security operations team can use these audit events for compliance reporting and incident investigation.

Establish regular compliance checks. Quarterly, review your agent inventory. Verify that agents still have active owners—an agent whose creator has left the organization needs to be reassigned or retired. Confirm that data sources are still appropriate as organizational data evolves. Check that retired agents have been properly decommissioned and are not still responding to users.

In government environments, audit logging is not optional—it is a compliance requirement. Confirm that Copilot Studio audit events are flowing to your SIEM or audit log retention system. Your security operations team should include agent activity in their monitoring scope alongside other Microsoft 365 workloads.

Building a governance framework

Putting this all together into a governance framework does not have to be overwhelming. Start simple and evolve.

Phase one: control who can create agents and establish a basic review process. This covers your biggest risks—unauthorized agent creation and agents going live without review.

Phase two: implement DLP policies for agents and set up monitoring. This gives you data flow controls and ongoing visibility.

Phase three: build a Center of Excellence with reusable components, shared templates, and documented standards. This accelerates agent development while maintaining consistency.

Document your policies. Write down who can build agents, where they build them, what reviews are required before production deployment, and how agents are monitored. Keep the documentation concise—a one-page policy is more likely to be read than a fifty-page governance manual.

Communicate the framework to makers. Governance that nobody knows about is governance that nobody follows. Make the process clear, accessible, and as frictionless as possible.

Review and update your framework quarterly as the platform evolves. Microsoft updates Copilot Studio frequently, and your governance framework should evolve with it.

Close: Govern without blocking

Let us recap the framework. Control agent creation through environment permissions and security groups. Review agents before they go to production with a focused, lightweight process. Monitor continuously through analytics, audit logging, and regular compliance reviews.

Good governance makes innovation possible. Without it, either everything is blocked or nothing is controlled—and neither extreme serves your agency well.

Next up, we will cover environment management strategies and DLP policies specifically designed for Copilot Studio agents.

Sources & References

• Governance considerations for Power Platform — Governance controls, policies, and best practices for Power Platform
• Copilot Studio documentation — Main documentation hub for Copilot Studio features and admin capabilities
• Power Platform admin center — Environment management, DLP, and tenant-level administration
• Managed environment usage insights — Monitoring and analytics for managed Power Platform environments