Governance, Risk, and Compliance (GRC) refers to a company’s strategy for managing the issues of corporate governance, enterprise risk management (ERM), and corporate compliance with data privacy and other regulations. It’s the integrated collection of capabilities that enable an organization to reliably achieve goals, address uncertainty, and act with integrity. A well-planned strategy can improve decision making, allow for optimal information technology investments, eliminate silos, and reduce fragmentation among divisions and departments.
Specifically, the three pillars of GRC are:
- Governance: The effective, ethical management of a company by its executives and managerial levels. These activities make sure that critical management information is complete, accurate, and timely to enable decision making and provide the control mechanisms for strategies, directions, and instructions to be effectively carried out.
- Risk: The ability to effectively and cost-efficiently mitigate risks that can hinder an organization’s operations or ability to remain competitive in its market. Risk responses typically depend on the perceived importance and involves controlling, avoiding, accepting, or transferring them to a third party.
- Compliance: A company’s conformance with regulatory requirements for business operations, data retention, and other business practices. Compliance is achieved through identifying the applicable requirements, assessing the state of compliance, assessing the risks and potential costs of non-compliance, and prioritizing, funding, and initiating any corrective actions.
How to implement GRC
Any organization, whether large or small, public or private, can implement GRC. To achieve a successful GRC implementation, there are five key steps to take:
- First, define what GRC means to your organization.
- Second, survey your organization’s regulatory and compliance landscape.
- Third, determine the most logical entry point and develop a phased approach.
- Fourth, establish a clear business case, considering both short-term and long-term value.
- Fifth, determine how success will be measured.
GRC software tools
Once an organization has solid policies and procedures in place, investing in a GRC solution can assist in making significant advances in performance, decision-making, risk awareness, and digital transformation. Popular GRC software vendors include IBM OpenPages GRC Platform, MetricStream, and Quantivate GRC Software Suite. Benefits in investing in a GRS tool includes:
- Enhanced agility: A GRC tool provides the tools needed to analyze risks and opportunities, making launching a new product or reacting to market changes faster and more efficient.
- Fragmentation and data silo elimination: Sharing data across business units, departments, and risk and compliance functions eliminates data silos and enables accurate risk assessment.
- Risk and compliance activity streamlining: A GRC tool can be implemented within days or weeks through manual activity automation and repeatable process development. It also streamlines day-to-day tasks.
- Risk information access: Leadership has access to critical information through dashboards and executive reports
- Proactive preparation: A GRC tool allows organizations to prepare for the future. It inventories and safeguards important business data by managing user and third-party access.