Governance, risk, and compliance (GRC) became a crucial concept when organizations recognized the importance and advantages of coordinating the personnel, procedures, and technological tools used to manage governance, risk, and compliance. Better coordination is necessary for organizations to function ethically and accomplish goals by reducing inefficiencies, misunderstandings, and other risks associated with a siloed approach to governance, risk, and compliance. A comprehensive GRC strategy improvises the interdependencies among corporate governance policies, enterprise risk management programs, and company compliance.
Organizations are required to follow some standards and compliances to ensure static growth and safety. GRC strategies ensure ethical governance within the organization, enhance the process for identifying, categorizing, assessing, and enacting strategies to minimize risks that would hinder its operations and control risks that enhance operations, and improves the level of adherence to the standards, regulations, and best practices, mandated by the business and relevant governing bodies and laws. Corporate compliance refers to a set of policies and practices that a business has in place to ensure that the business itself and its employees are conducting business in a morally and legally responsible way.
An effective GRC strategy helps organizations in several ways:
- increased governance effectiveness at all levels of leadership
- increased visibility into risks, threats, and reduced costs
- ongoing compliance with required standards and regulations
- protection against unfavorable internal audits, financial penalties, and litigation
- reduction in risk across the entire organization, including business risks, financial risks, operational risks, and security risks
GRC software and tools
GRC software helps manage GRC-related strategy and implementation in a methodical, structured manner. It bundles the core GRC management applications into a single and integrated package. Administrators can monitor and enforce policies using a single framework rather than multiple siloed applications. Successful installations help organizations control risk, lower the costs associated with multiple installations, and ease manager complexity.
An effective GRC software includes tools for risk assessment and identifying connections between operations, internal controls, and business processes. The single, multipoint, and enterprise-wide software that the company currently uses can be integrated with GRC software to help identify the procedures and instruments that are used to manage those risks.
In addition, GRC platforms offer operational risk management, IT risk management, policy management, audit management, third-party risk management, issue tracking, and document management.
The right way to implement GRC
Implementing GRC software generally involves complex installations that require vendor negotiation and data coordination between the technical team of the vendor and numerous internal organizational departments, including business, IT, security, compliance, and auditing.
Integration of data and other pertinent information from internal departments and outside organizations into useful GRC information, as well as ensuring that all GRC system users are properly trained to reap the most advantages from the software.
The corporate culture may perhaps need to adjust due to the new GRC system’s collaborative nature. GRC software requires routine testing to make sure internal departments are utilizing it properly. GRC software must be considered in technology disaster recovery plans to guarantee that it will continue to operate in any disruptive event.
Key benefits of GRC
Administrators can identify an organization’s risk exposure, track progress toward quarterly goals, and quickly put together an information audit with the aid of GRC dashboards and data analytics tools once they are in place. Good governance is viewed as an objectively quantifiable commodity, which is defined as efficient, moral management of a business at the executive level. Risk management and data retention are transformed into measurable metrics, GRC software compares current activities to standards and regulations and identifies areas for improvement, and compliance with standards and regulations can be further ensured. Finance managers are tasked with ensuring regulatory compliance, it aids the needs of a variety of stakeholders, including the administrators who recognize and manage risk. GRC software helps to configure reports and analytics along with enhanced cross-functional communication. It offers automated workflows by tracking obligations, helping flag compliance gaps, and automating action support.
Establishing an appropriate methodology and structure
As organizations try to manage increasingly complex compliance and regulation, businesses are rapidly moving towards GRC solutions. Organizations need a holistic and integrated view of risk now more than ever to make better strategic decisions. Even though GRC technology holds promise as a response to these modern demands, implementation is usually a drawn-out process for organizations. Organizations need to understand GRC objectives and implement them through comprehensive strategies and effective tools. To reap the benefits of GRC integration, organizations need to consider a strategy that includes solid policies and processes for GRC and a flexible architecture that supports and enhances the GRC efforts. There are many solutions available in the market to meet the needs of GRC, like risk management (logging, analysis, and management), document management, audit management, reporting, analytics, etc.
Technology is a great way to reduce the “compliance” overhead that comes with gathering and managing data without overburdening employees who should be focused on creating value instead. But just having a tool isn’t enough to make sure the successful implementation of GRC. Ethics are something that only people have. So, GRC must be looked at from the point of view of people and processes before technology.