What is Governance, Risk, and Compliance?
Protecting corporate information remains a priority for most companies because continued digital transformation and evolving regulations introduce more security and privacy threats into company ecosystems. Risks are becoming more complex, with system interconnectivity having broader implications if compliance measures fail. A data breach can affect an organization’s reputation and operations and can have legal consequences.
Historically, individual departments managed the processes for keeping an organization aligned with internal and external regulations. Audits, risk management, policy-setting, and vendor oversight teams kept the company on track, often using spreadsheets and email systems to maintain records. The siloed (and often manual) approach struggled to keep pace with the changing business landscape.
Organizations needed a structured method for getting departments to conform with business objectives while managing risk and complying with regulatory requirements. Fortunately, governance, risk, and compliance (GRC) emerged as a solution. Possibly, one that is ideal for your organization too. Here’s an overview to help you understand GRC and how to build this set of compliance standards into your risk management strategy.
What is GRC?
According to the non-profit Open Compliance & Ethics Group (OCEG), GRC is “a capability to reliably achieve objectives [Governance], while addressing uncertainty [Risk Management], and act with integrity [Compliance].”
A GRC strategy, often enabled by technology, removes current corporate silos, and integrates security processes into each department to reduce risks, costs and improve efficiency.
Each element of the GRC strategy is essential to achieving overall effectiveness.
Governance: The Structure
Governance refers to the rules, standards, and processes that provide direction for an organization. Companies set strategies and policies that ensure organizational activities align to support business goals. Governance also establishes methods for tracking performance, implementing controls, and measuring results.
Risks: What Could Go Wrong
Whether handled internally or by a third party, managing risk involves identifying events or activities that could affect a company's ability to achieve objectives. The process also recommends steps to reduce (or eliminate) the financial impact of those hazards. Risk analysis looks for gaps between current operations and the strategic framework with the aim of uncovering opportunities for organizations to improve performance.
Compliance: Tools to Manage Risk
Compliance refers to the measures, systems, and controls a company implements to ensure that employees use systems, data, and information legally, ethically, and securely. Compliance protects an organization by assuring teams consistently meet regulatory requirements for security and privacy.
Creating an Effective GRC Strategy
A successful GRC strategy will address organizational needs and flow through the entire company from the leadership team to front-line staff members in every business unit. The effectiveness of any plan, including GRC, links to how well a company integrates and operationalizes it as an integral element of daily business.
Effective GRC initiatives prioritize the company’s most significant objectives by identifying risks that cause inefficiencies, impact quality of your products and services, or impede the organization from achieving performance goals.