GRC is a term used in business to describe the processes and tools that help companies manage their overall governance, risk management, and compliance efforts. This includes everything from ensuring regulatory compliance to implementing internal controls to reduce operational risk. According to OCEG, GRC is defined as “the integrated collection of capabilities that enable an organization to reliably achieve objectives, address uncertainty and act with integrity.”
A comprehensive GRC program includes two elements:
GRC is an acronym for Governance, Risk Management and Compliance. While the concept of GRC is not entirely novel, it's worth noting that some organizations may not have previously taken a connected and collaborative approach to these functions.
To break GRC down further,
Implementing a Connected GRC strategy at your organization can ensure:
Improved visibility and transparency
With a holistic view of an organization's governance, risk, and compliance practices, your organization is can now make better decisions and ensure transparency and accountability.
Enhanced risk management
By being able to identify and assess risks, implement controls to mitigate them, and monitor their effectiveness your organization gains better risk management practices and reduces the likelihood of potential crises.
GRC ensures that an organization complies with applicable laws, regulations, and standards. This reduces the risk of non-compliance penalties, reputational damage, and legal disputes for your organization.
Better alignment of business objectives
By aligning business objectives with governance, risk management, and compliance practices, you can ensure more effective and efficient business operations and enhanced stakeholder trust.
Improved communication and collaboration
GRC provides a common language and framework for various departments and functions within an organization, facilitating better communication and collaboration. This results in more efficient and effective decision-making.
Overall, GRC enables organizations to achieve good governance by promoting transparency, accountability, risk management, compliance, and stakeholder trust.
Although most organizations have initiatives designed to improve internal controls, corporate governance, and risk management, they continue to face challenges, including:
A GRC framework brings the components of governance, risk management and compliance together to help organizations effectively manage their overall business activities. This involves implementing a structured approach to governance, risk management, and compliance that includes policies, procedures, and technologies that help to ensure compliance, identify and mitigate risks, and ensure effective decision-making.
Key Capabilities of a GRC Framework
|Corporate management, which includes how relationships within the organization are structured and the organization’s hierarchy.||The identification of existing and potential risks that an organization faces.||Alignment and best practices around applicable regulations, conduct rules, and expectations|
|Mapping the organization’s goals with individual responsibility and accountability.||Risk assessment, wherein all assets and risks are inventoried and assessed for potential gaps.||A means for an organization to pursue demonstrable integrity, trust, and legal compliance|
|Policy management for everyday activities. As organizations grow, standardizing everyday processes is one way to ensure smooth operations.||Managing risks by classifying them based on their likelihood of occurrence and potential business impact. As an extension, risks that are more likely and have a larger business impact can be prioritized for faster mitigation.||Internal and external auditing and controls to comply with set standards|
|Implementing security measures and protocols|
|Reporting tools, metrics, and formats that ensure clean records for both internal and external compliance.|
An agile and integrated GRC framework is designed to respond effectively to today’s business environment, namely, the growing complexity of business processes, frequent process modifications, and increasing regulations. When properly structured, enforced, and managed, an agile and integrated GRC framework further offers the potential for future success by:
GRC maturity refers to an organization's level of maturity in implementing and managing its governance, risk management, and compliance (GRC) programs. The maturity of an organization's GRC program can be assessed through various criteria, such as:
An organization with a high level of GRC maturity typically has a well-defined GRC program that is integrated into its overall business strategy and operations. It also has a proactive and agile approach to risk management, compliance, and governance that enables it to identify, assess, and respond to risks and compliance issues effectively. In contrast, an organization with a low level of GRC maturity may have an ad-hoc and reactive approach to GRC, which can lead to inefficient processes, inadequate risk management, and compliance failures.
Assessing an organization's GRC maturity can help it identify areas of improvement and develop a roadmap for enhancing its GRC program over time.
GRC maturity can be assessed through various methods, including maturity models, benchmarking against industry standards, and conducting internal assessments.
Here are some ways to help you access your organization's GRC maturity:
Identify your organization's GRC framework and processes
Determine the processes and frameworks your organization has in place to manage governance, risk, and compliance activities. This will help you assess the current state of your organization's GRC maturity.
Assess the effectiveness of your organization's GRC processes:
Conduct an evaluation of your organization's GRC processes to determine their effectiveness. You can use various methods, including surveys, interviews, and audits.
Use a GRC maturity model
A GRC maturity model can help you assess your organization's GRC maturity level. You can use a standard model or develop one specific to your organization's needs.
Benchmark against industry standards
Compare your organization's GRC maturity level against industry standards and best practices. This will help you determine how your organization stacks up against its peers.
Develop a roadmap
Based on your assessment, create a roadmap for improving your organization's GRC maturity level. This should include specific actions and timelines for implementation.
Monitor and evaluate progress
Regularly monitor and evaluate your organization's progress towards improving its GRC maturity level. This will help you determine if you are on track to achieving your goals and identify areas where further improvements are needed.
Ask if the GRC software is built to scale
An organization’s risk profile is unique to their people, processes, industry, locations, and regulatory environment. And risks and compliance requirements change on a continuous basis. Smart companies purchase software that can grow and adapt with them as their needs diversify within a changing market and regulatory environment. While they may not require every element of a GRC software solution today, assurances of capacity and configurability can provide confidence that the GRC solution will remain viable and valuable in the long run.
Ask about integrations
Most organizations have some degree of software investments already in place when they acquire a GRC solution. In some cases, these solutions are more intrinsic to how the organization operates than the GRC solution will be, and therefore, the buyer will have expectations on whether and how the GRC solution can fit within their existing (and planned) software solutions. Can it work in conjunction with SharePoint, can it deliver reporting through a BI tool, can it integrate with an existing component of another GRC solution, delivering a more holistic experience?
Ask about the GRC vendor’s reputation
Particularly as more people are attuned to and companies are increasingly aware of their own reputations in the market and how those with whom they choose to do business may affect them, they want assurances on who they choose to do business with. For many more traditional industries, an evaluation of whether a vendor is a conscientious partner, a good corporate citizen, and believes in fostering a culture of compassion, inclusion, and diversity may seem unnecessary or irrelevant, but increasingly more buyers are evaluating vendors based on these criteria.
When evaluating a GRC vendor, especially as it is selling a methodology for good governance, risk awareness, and good conduct, it makes sense to ask about its own GRC practices and performance. Do they believe in what they’re saying?
Evaluate GRC software by asking the following questions:
GRC tools are software applications designed to help organizations manage their compliance with regulations, policies, and standards, as well as identify and mitigate risks that could impact their operations. Some of the most common GRC tools include:
These tools help organizations
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These tools help organizations:
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While implementing a GRC framework, it is common for organizations to face certain challenges. Common challenges include:
To gain the full value of their GRC program and gain the benefit of accurate decision-making in a fast-changing business environment, businesses need to invest in a robust change management program.
Traditionally, companies keep departmental functions separated, resulting in data duplication and challenges in information management. A GRC strategy will have to ensure the integration of all relevant data while prioritizing high-impact audit activities and critical tasks.
Lack of an effective GRC framework
For effective GRC implementation, a comprehensive framework should be in place to integrate GRC components with business activities to adapt to changing business environments and new regulations. Otherwise, the implementation will be fragmented and ineffective.
GRC strategy requires everyone from the frontline workers to the management team and board of directors to foster an ethically compliant culture. Senior executives will need to lead the transformation and ensure information dissemination throughout the organization.
A truly connected GRC strategy that ensure seamless communication of information among GRC compliance teams, stakeholders, and employees is crucial for the success of GRC implementation.
Start your GRC journey with this five-step approach.
1. Establish Goals
The first step is to evaluate your organization's capabilities and determine where you stand in relation to your overall objectives. If these objectives have not yet been set, it would be wise to establish them. If you are already engaging in GRC-related activities, assess your strengths and weaknesses and identify any gaps. Once you have established the long-term vision for your GRC strategy, it becomes easier to create a roadmap for guiding the organization towards this goal.
2. Build the Right Team
With the right GRC team, organizations can strengthen their GRC approach. They can identify and evaluate potential risks, establish policies and procedures to ensure compliance with relevant laws and regulations, implement controls and processes to monitor and manage risks, and develop concrete strategies that align with business objectives.
3. Leverage GRC Technology
The appropriate technology can help you continuously monitor and manage risks with minimal oversight. A connected GRC solution can provide several benefits, such as reducing time and effort through automation, integrating systems to provide a comprehensive view of risks, offering insights through data analytics, and enabling better collaboration among team members.
4. Continuously Improve
While breaking up a large GRC project based on objectives is a better project management strategy, the typical stages for GRC projects include planning, implementation, testing, deployment, monitoring, review, and improvement. Like training for a marathon, we must systematically put systems and processes in place and progressively scale objectives. It is also beneficial to quantify the value achieved at each stage before proceeding to the next step. These achievable and digestible stages help ensure the process is well-planned, effectively implemented, and continuously improved.
5. Anticipate Change
The world is constantly changing, and the threat landscape is always evolving. Organizations today must be prepared to face pandemics, wars, inflation, economic stress, strain, and recession. Understanding the ever-evolving nature of risks is critical because only then can organizations reach the aspirational stage of achieving agile and cognitive GRC.
MetricStream’s ConnectedGRC products help you strategically manage risk in the interconnected risk landscape with an integrated and holistic approach to GRC. Designed with advanced analytics and AI capabilities at the core, it enables businesses to proactively identify, assess, manage, and mitigate various risks.