Growing industry-specific and governmental compliance and security regulations, tied with the immediate need to effectively manage and mitigate the increasing business and operational risks inherent to competing in a complex global market have turned the acronym “GRC” into a frequent boardroom topic. Traditionally viewed as separate operational silos, organizations are increasingly converging governance, risk management and compliance into an integrated enterprise framework.
Organizations in all industries have matured their perspectives on GRC and are expanding their initiatives to cover an integrated and enterprise-level view of risk and compliance. The goal is to effectively deﬁne, manage and monitor the external and internal business environments to assure the protection and growth of value within risk tolerance and legal boundaries. This involves moving toward a federated organizational structure, where GRC functions are centrally overseen, but responsibility is distributed across all lines of business.
Defining GRC as a whole requires a solid holistic deﬁnition of each component. Deﬁnitions for governance, risk and compliance (inﬂuenced by standards, professional associations and regulatory agencies) are as follows:
- Governance. The culture, policies, processes, laws and institutions that deﬁne the structure by which companies are managed. Corporate governance includes the relationships between stakeholders and the goals for which the corporation is governed.
- Risk. The effect of uncertainty on organizational objectives. Risk management involves coordinated activities to direct and control an organization toward fulfilling opportunities while mitigating the negative consequences of events.
- Compliance. The act of demonstrating adherence to external laws and regulations as well as corporate policies and procedures. Compliance management involves the practice of coordinated activities to ensure that the company stays within internally and externally mandated boundaries.
GRC also offers the following benefits deriving from an organizational integrated approach to GRC processes:
- Reduces cost, since redundant activities are identified and streamlined or eliminated;
- Reduces need and cost for reconciling information across the organization;
- Reduces gaps and errors, since the integration creates a holistic system of checks;
- Increases quality of the risk-based information on which strategical and tactical decisions are based;
- Enhances employee motivation as contribution to achieving objectives becomes clear;
- Provides trust results from consistent organizational positions and actions, from oversight through operations;
- Drives agility by a clear definition of who handles what activities in what sequence;
- Improves the effective management of stakeholder expectations;
- Assures that expectations and objectives are met.
A comprehensive Governance, Risk and Compliance solution supports all stages of the GRC lifecycle, allowing you to develop and maintain activities such as strategic planning, risk management, process management, monitoring and control, from the corporate to IT level.