Operationalizing Regulations into Code: A Model to Enhance Governance and Compliance in LLM Selection for Software Engineering

Abstract

Integrating Large Language Models (LLMs) into the Software Development Life Cycle (SDLC) can improve developer productivity, but it also introduces security, privacy, and compliance risks during model selection. Regulations and frameworks such as the EU AI Act, the NIST AI Risk Management Framework (RMF), the General Data Protection Regulation (GDPR), the Lei Geral de Prote\c{c}\~ao de Dados (LGPD), and ISO/IEC 42001 establish obligations that are often difficult to translate into operational criteria for technical decision-making. This paper proposes a model to support governance and compliance in LLM selection for software engineering projects. The model is developed through Design Science Research (DSR) and is structured in three layers: (i) regulatory requirements, (ii) organizational governance capabilities, instantiated by a multi-criteria decision matrix with knock-out and weighted scoring criteria, and (iii) productivity and sustainability outcomes, operationalized by the LLM governance assessment protocol (PAG-LLM). A regulatory feedback loop connects operational results back to the normative layer, enabling iterative refinement of the model. A pilot evaluation with 20 adversarial scenarios based on Common Weakness Enumeration (CWE) and the OWASP Top 10 suggests distinct risk profiles between commercial cloud-based LLMs and local open-source LLMs. The results provide preliminary evidence that regulatory disqualification logic, particularly K.O. criteria, can prevent the selection of technically competitive models that nonetheless pose unacceptable compliance risks, demonstrating the feasibility of governance-oriented LLM selection in software engineering projects.