Locating a red team in the organization chart
Initially, I would not spend too much time thinking about where in the organization the offensive security team should be located. If you are just starting out, it's most likely that only one full-time person is tasked with offensive security work. The more critical part at that stage is to get executive sign-off and support to perform offensive testing and deliver results. The bias should be toward action at first and to demonstrate a positive impact. In some organizations, the program is entirely outsourced, and only logistics are driven internally, although typically the desire to build an internal team will grow.
A typical organization structure will probably put the offensive security team in either the defense and response part of the company or as a function of a Security Assurance team. I have also seen offensive security teams being put in legal and compliance areas of companies. A lot of this depends on the size and structure...