Microsoft 365 Copilot doesn’t break your permissions, it makes them searchable. This checklist walks through the sharing settings, reports and fixes to run in your own tenant, in priority order, before Copilot goes to everyone.
TL;DR
- Copilot only shows people content they already have permission to open. If a payroll spreadsheet is shared with the whole company, Copilot can surface it to anyone who asks the right question.
- So the readiness work is mostly permissions work: tighten default sharing, clear out "Anyone" and company-wide links, remove "Everyone" permissions from sensitive sites, deal with stale sites, then label what’s left.
- Microsoft documents that assigning at least one Microsoft Copilot licence gives SharePoint admins the SharePoint Advanced Management (SAM) reports and controls that do most of the finding, but its prerequisites page lists only Enterprise, Education and government base plans, so confirm eligibility if you’re on a Business plan.
- Two 2026 changes matter. Copilot in SharePoint began rolling out to general availability on 30 September, and the old PowerShell opt-out was honoured only until 1 November. Restricted SharePoint Search is retiring in favour of Restricted Content Discovery.
- Work through the eight steps below in order. Each has what to look for, a Check: line and the fix.
What does Copilot actually see?
Microsoft’s wording is precise: Copilot "only surfaces organizational data to which individual users have at least view permissions." It doesn’t get special access, and Microsoft says prompts, responses and the data Copilot reads through Microsoft Graph aren’t used to train its foundation models.
The catch is that most Microsoft 365 tenants are more open than anyone realises. Nobody goes looking through a SharePoint site they’ve never heard of, so a folder shared with the whole organisation five years ago never caused a problem. Copilot changes that. A staff member asking "what are we paying the operations team?" gets an answer built from whatever they can technically open.
A common example: an HR site created for a restructure, shared with "Everyone except external users" so a few managers could see a draft, then forgotten. Nothing about that site changed when Copilot arrived; it just became findable.
That’s why oversharing is a permissions problem you fix before rollout, not a Copilot setting you flip.
What changed in 2026?
Copilot in SharePoint. Microsoft says general availability began rolling out on 30 September 2026. Everyday capabilities come with the Microsoft 365 Copilot licence and "no opt-in step is required". The PowerShell controls used to opt sites in or out during the preview were honoured until 1 November 2026. Microsoft now points admins to Site AI settings on each site and to Restricted Content Discovery instead. If you relied on the old opt-out, check your sites again.
Restricted SharePoint Search is retiring. It was a temporary 100-site allow list. Microsoft blocked new enablement from 31 July 2026 and points customers to Restricted Content Discovery.
SAM comes with Copilot, with a caveat. Microsoft documents that SharePoint admins get the SAM features that support a Copilot deployment once at least one user in the organisation has a Microsoft Copilot licence, and its feature page says this applies to "enterprise and business commercial customers". Its SAM prerequisites page, however, lists the required base subscriptions as Office 365 E3, E5 or A5, Microsoft 365 E1, E3, E5 or A5, and the government clouds. Microsoft 365 Business Basic, Standard and Premium aren’t on that list, so if that’s what you run, confirm with Microsoft or your licensing partner which of the reports below you’ll get. Where SAM is available, a practical sequence for a small organisation is: licence a pilot user or two, run the reports below, fix what you find, then expand.
The readiness checklist, in priority order
You’ll need the SharePoint Administrator role. Paths below are in the SharePoint admin center unless noted.
1. Tighten the defaults so the problem stops growing
Go to Policies > Sharing.
- External sharing level. If you don’t need anonymous links, move SharePoint and OneDrive from Anyone to New and existing guests. OneDrive can be stricter than SharePoint, never looser.
- Default link type. Set File and folder links to Specific people. Microsoft describes it as the most restrictive option. Only people in your organization is the usual compromise for internal-heavy teams.
- Anyone links. If you keep them, require them to expire after a set number of days and restrict them to View.
Check: a new share from a test account defaults to "Specific people", and an "Anyone" link (if allowed) shows an expiry date.
Fix: change the settings above. They don’t touch existing links; steps 2 and 3 deal with those.
2. Find "Anyone" and company-wide sharing links
Go to Reports > Data access governance > Sharing links. This activity report shows the sites where people created the most "Anyone", "People in your organization" and "Specific people" links over the last 28 days. If your tenant doesn’t have SAM yet, Microsoft says you must first enable data collection, and reports become available 24 hours later.
What to look for: "Anyone" links on finance, HR, legal, board or client sites; "People in your organization" links on anything containing personal information.
Check: you have a list of sites with "Anyone" links and a named owner for each.
Fix: ask site owners to remove or replace links (the Site access review feature sends the request for you), or remove them centrally for the riskiest sites.
3. Remove "Everyone" and "Everyone except external users" from sensitive content
"Everyone except external users" (EEEU) is a built-in group containing every internal account. Grant it access once, at site, folder or file level, and that content is open to every staff member, and so to their Copilot.
Run two snapshot reports under Data access governance: Site permissions across your organization, which shows the sites with the broadest access (thousands of users, guests, EEEU), and Sites and files shared via special SharePoint groups, which names the exact sites, folders and files shared with EEEU or Everyone and how.
What to look for: EEEU or Everyone on anything that isn’t genuinely meant for all staff, such as intranet news or policies.
Check: no site holding personal, financial or commercially sensitive information has EEEU or Everyone in its permissions.
Fix: replace EEEU with a proper Microsoft 365 group or security group of the people who need access.
4. Lock down overshared sites while you fix them
Sorting out permissions on a big site takes time. While you work through it, you have two interim controls:
- Restricted access control limits a site to members of a named group, whatever its internal permissions say.
- Restricted Content Discovery keeps a site out of organisation-wide search and Copilot responses, and removes the Copilot button and AI actions from it. Turn it on under Sites > Active sites > site > Settings > Restrict content from Microsoft Copilot.
Restricted Content Discovery doesn’t change permissions; people who can open a file still can. Microsoft describes it as "a temporary governance control", it works on SharePoint sites only (not OneDrive), it needs a Copilot licence and SAM, and on very large sites (over 500,000 items) a change can take more than a week to apply.
Check: your top five riskiest sites from steps 2 and 3 are either fixed or under one of these controls, with an owner and a date to remove it.
Fix: use Site access review to get owners to right-size membership, then lift the interim control.
5. Deal with stale and ownerless sites
Old project sites, departed staff’s team sites and abandoned Teams are where forgotten permissions live. SAM’s site lifecycle policies help:
- Inactive site policy finds sites with no meaningful activity across SharePoint, Teams, Exchange and Viva Engage and asks owners whether they’re still needed.
- Site ownership policy flags sites below a minimum number of owners.
- Site attestation policy asks owners to confirm a site is still needed and correctly shared.
Each can run in simulation mode first, which gives you a report without emailing anyone. In active mode, unanswered sites can be set to read-only, then archived. Microsoft notes the policies never delete sites directly.
Check: a simulation report lists inactive and ownerless sites, and each has a decision: keep (with owners), archive or delete.
Fix: archive what nobody needs, and give every remaining site at least two owners.
6. Label what’s genuinely sensitive
Sensitivity labels let Copilot respect protection that travels with the file. Microsoft’s Purview guidance has three points that matter here:
- If a label’s encryption gives a user View but not Copy and extract content (EXTRACT), Copilot won’t summarise that file for them; it can only link to it.
- A data loss prevention (DLP) policy for the Microsoft 365 Copilot location can stop Copilot summarising labelled files and emails.
- Labels on a site or team aren’t inherited by the files inside it, so labelling the container isn’t enough.
Start small: three or four labels (for example Public, Internal, Confidential, Highly confidential), auto-apply where you can, and encrypt only the top tier. The sensitivity labels report in Data access governance shows where labelled files live, but Microsoft notes it needs E5 or G5.
Check: your most sensitive document types (payroll, board papers, client health or financial records) carry a label that either blocks EXTRACT or is covered by a Copilot DLP policy.
Fix: publish the labels, set a default label on sensitive libraries, and add the DLP policy.
7. Decide where Copilot in SharePoint appears
Now that the preview PowerShell controls have gone, site owners manage the experience under Settings > Site AI, where they can hide the Copilot button from site visitors. Restricted Content Discovery from step 4 also removes Copilot in SharePoint from a site regardless of other settings.
Check: owners of your sensitive sites have reviewed Site AI settings, and any site you previously opted out with PowerShell has been re-checked.
8. Pilot, then widen
Give Copilot to a small group across departments first, including someone from finance or HR who’ll notice if something surfaces that shouldn’t. Ask them to try the questions an over-curious colleague might ask. Re-run the reports in steps 2 and 3 on a regular schedule after rollout, because new sharing links appear every day.
Check: pilot users have tried to find salaries, board papers and client files through Copilot, and found nothing they shouldn’t.
Quick reference
| Report or setting | What it finds | First fix |
|---|---|---|
| Policies > Sharing | Loose defaults for new links | Specific people by default; expiring, view-only Anyone links |
| Sharing links report | Sites with many Anyone or org-wide links | Owners remove links via Site access review |
| Site permissions report | Sites with the broadest access | Restricted access control or Restricted Content Discovery while you fix |
| Special SharePoint groups report | Exact files and folders shared with EEEU or Everyone | Replace with a named group |
| Inactive site and ownership policies | Stale and ownerless sites | Archive or assign two owners |
| Sensitivity labels and Copilot DLP | Sensitive files Copilot could summarise | Label, encrypt the top tier, add DLP |
Switching on Copilot? Our Copilot readiness work finds and fixes oversharing first, so Copilot only shows people what they should see.
If you’d like the reports run and read for you, our Copilot readiness work covers this checklist, and a Microsoft 365 security review looks at the identity side as well. For wider AI rules for staff, see AI security and governance and our guide Is ChatGPT safe for business data?.
Is your Microsoft 365 set up securely? Our Microsoft 365 security review checks sign-in, sharing, email and admin settings against current guidance and gives you a prioritised fix list.
Key takeaways
- Copilot doesn’t create new access. It makes existing access easy to use, so fix permissions before rollout.
- Change the sharing defaults first so the problem stops growing, then clear out Anyone links and EEEU permissions on sensitive sites.
- Use Restricted access control or Restricted Content Discovery as a temporary lock while owners fix big sites; neither replaces fixing permissions.
- Archive stale sites, require two owners, and label the small set of truly sensitive content.
- Since 1 November 2026, Copilot in SharePoint is managed through Site AI settings and Restricted Content Discovery, not the preview PowerShell switch.
Sources
- Microsoft Learn, Data, privacy and security for Microsoft Copilot
- Microsoft Learn, Secure and govern Microsoft Copilot: foundational deployment guidance
- Microsoft Learn, Get started with Copilot in SharePoint
- Microsoft Learn, Prerequisites for SharePoint Advanced Management and SAM features in Microsoft Copilot licences
- Microsoft Learn, Data access governance reports
- Microsoft Learn, Restricted Content Discovery
- Microsoft Learn, Restricted SharePoint Search
- Microsoft Learn, SharePoint site lifecycle management
- Microsoft Learn, Manage sharing settings for SharePoint and OneDrive
- Microsoft Learn, Microsoft Purview considerations for Microsoft 365 Copilot
Want a second pair of eyes?
Catharsis Cyber Security is a Sydney cyber security company, certified to ISO/IEC 27001:2022. We help organisations protect, test and run their technology, and explain it in plain English.
