An Introduction to Governance, Risk, and Compliance (GRC)
Governance, Risk, and Compliance is a holistic approach to managing the interconnected areas of all three aspects to try to combine them in one coordinated model. Aiming to help organizations manage risks, ensure compliance with laws and regulations, and align business objectives with the organization's overall mission and values. This helps companies to reduce wastage, increase efficiency, reduce non-compliance risk, and share information more effectively. It also helps improve decision-making and performance through an integrated view of how well an organization manages its risks. GRC includes tools and processes to unify an organization's governance and risk management with its technological innovation and adoption.
Below is a brief explanation of each of the components of GRC:
Governance: refers to the processes and structures used to ensure accountability, transparency, and oversight. Governance also refers to internal controls that can include things like segregation of duties, approval processes, and monitoring and reporting mechanisms. By doing so, the company can better mitigate the risks it faces and ensure that it is operating in a responsible and sustainable manner.
Risk management: involves identifying, assessing, and prioritizing risks to minimize negative impacts on the organization
Compliance: refers to adhering to applicable laws, regulations, and policies
GRC gained importance in the early 21st century when companies recognized that coordinating the people, processes, and technologies they used to manage governance, risk, and compliance benefited organizations. As such an approach would help to ensure organizations act ethically and to achieve goals by reducing the inefficiencies, miscommunications, and other hazards of a fragmented approach to governance, risk, and compliance.
When we think about developing a GRC discipline, we usually think of large organizations that have extensive governance, risk management, and compliance requirements and where programs to meet these requirements often overlap. However, organizations across a variety of industries and of all sizes can benefit from well-planned governance, risk, and compliance (GRC) strategy. GRC can help with the alignment of performance activities to business goals, manage enterprise risk and meet compliance regulations.
The implementation of a strong GRC program is of full importance to all organizations as they face a rapidly changing and increasingly complex business climate. Making essential the ability to integrate traditional distinct management activities into a cohesive discipline that increases the effectiveness of people, business processes, technology, facilities, and other important business elements. GRC makes it possible for organizations to achieve strategic goals by allowing business units to work in a collaborative way.
GRC helps companies streamline their processes and reduce duplication of effort. By implementing standardized processes and systems, companies can improve their efficiency and reduce the cost of compliance.
To start a GRC program some steps should be followed. First, identify the risks your organization faces, the regulatory requirements you need to comply with, and the areas where you need to improve your governance practices. Assessing current processes and technologies already in place and identifying gaps and weaknesses that need to be addressed is the second step. After that, stabilize a GRC framework that aligns with your organization's goals and objectives. The framework should include policies, procedures, and controls that support governance, risk management, and compliance. To make sure your GRC program is effective, all involved professionals have to understand the procedures and their importance. This way the program can be correctly implemented. It is fundamental that the processes are constantly monitored and evaluated. Also, it is necessary to continuously improve the GRC program by incorporating feedback, updating policies and procedures, and adapting to changing regulatory requirements and risks.
Starting and maintaining a GRC program is not an easy task. A common mistake is making it overcomplex in a way that slow down communication, limit access to critical information, and duplicate activities due to a lack of transparency and knowledge across the organization. Most times, the best GRC strategy is invisible where tools, technologies, and processes are at the core of your organization with GRC standards and practices becoming a natural part of the business.
To help, a GRC tool can be used to manage and monitor a GRC program. These GRC solutions give you a holistic view of the underlying processes, resources, and records. Maiky goes further by using automation and AI to reduce by 80% the manual work involved in a GRC program and also automates risk management.
Book a demo below and we will radically change how a GRC program is being run.