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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:

  • an integrated and connected strategy that helps organizations manage governance, risks, and compliance with industry standards 
  • the tools and processes used to centralize, manage, and deploy a company-wide GRC solution        

What Does GRC Stand For?

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,

  • Governance is the system by which an organization operates, including its organizational structure, rules, processes, and controls, as well as the mechanisms by which it, its people, and its leadership are held to account. Effective governance provides leadership with a perspective on its people, purpose, and performance while giving its employees the structural and process clarity, resources, and tools needed to succeed in their individual roles.     
  • Risk management encompasses all risk management strategies, policies and processes deployed by the organization. All organizations are exposed to risks, including financial risks, cyber risks, legal risks, privacy and security risks, reputational and strategic risks and ESG risks. As a result, the risk profile of an organization can be complex, diverse, and ever changing. Effective risk management should include stakeholder communications, risk forecasting, security risk mitigation, and more.     
  • Compliance refers to the systems, policies, and documentation that enable organizational adherence to applicable laws and regulations, as well as the development and distribution of relevant internal policies. This includes compliance with laws, regulations, and policies applicable to the organization’s industry, locations, people, processes, and status, as framed by the organization. The cost of non-compliance with established rules and regulations can severely impact an organization’s ability to operate.       

Why is GRC Important for Organizations?

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.

Increased compliance

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.

Good governance

Overall, GRC enables organizations to achieve good governance by promoting transparency, accountability, risk management, compliance, and stakeholder trust.

What Drives Organizations to Implement GRC?

Although most organizations have initiatives designed to improve internal controls, corporate governance, and risk management, they continue to face challenges, including:

  • The need for effective compliance with laws, regulations, and standards applicable to the organization's operations and industry.
  • An increasing number of new and updated regulations require a robust GRC program to prepare for emerging regulations and to seamlessly adapt and absorb to changing requirements
  • An increasingly interconnected risk landscape, where a cyber risk or ESG risk in your supply chain requires more than conventional vendor or third-party risk management
  • Managing the rising costs of compliance and risk management when approached in a siloed and disconnected manner
  • The requirement for greater visibility into the organization's activities and communication with stakeholders
  • A need to Improve operational efficiency and effectiveness by streamlining processes and eliminating duplication
  • To be able to build business resilience and gain the agility to prepare for and respond to crises or unexpected events that could impact the organization's operations, reputation, or financial performance
  • To effectively build trust and confidence with stakeholders, including customers, shareholders, employees, regulators, and other third parties.             

What is a GRC Framework?

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

GovernanceRisk ManagementCompliance
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.

How Can an Agile and Integrated GRC Framework Help Your Organization Become Future-Ready?

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:

  • Providing a consolidated view of the organization
  • Offering timely intelligence and insights
  • Engaging all three lines of defense
  • Improving risk identification and control monitoring
  • Facilitating the embedding of business, IT, and security processes    

What is GRC Maturity?

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:

  • the effectiveness of its policies
  • the level of automation of its GRC processes
  • the alignment of its GRC program with its business objectives
  • the awareness and training of its employees
  • the organization's ability to monitor and adapt to changes in its GRC environment

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.

Download MetricStream GRC JourneyTM Overview         

How to Access GRC Maturity?

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.

What Questions to Ask Before you Choose a GRC Software Solution?

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:

  • Does it do what it’s supposed to do?
  • Am I able to effectively identify, prioritize, mitigate and reduce my risk with this GRC solution?
  • Are others in my industry using this software solution successfully?
  • Can I assess my risks and mitigation plans and activities easily and comprehensively, and can I easily share reporting and analytics to my bosses and the board?
  • With that kind of visibility into my GRC program and its performance, can I refocus my energies away from worry about GRC / risks and on to more strategic and performance-oriented tasks and tactics?
  • Does it allow me to be more strategic, productive, confident in my job?
  • Does the GRC software scale and is it flexible enough to handle unforeseen changes in the business?
  • What happens if the business opens new operations or adds third-party engagements in different areas of the world?
  • What new challenges would there be if the business gets acquired or merges with another business?
  • Is it comprehensive enough to not need to be removed and replaced in the next five years, no matter what changes happen to the business or the risk and compliance environment?
  • Does it offer me assurances that I am not buying something I will grow out of in a short time?
  • Does it fit and is it customizable to my organization’s distinct needs, regulatory and risk environments?
  • I live in a world where I depend on multiple software solutions and have an IT team investing in more. I can’t have a solution that requires constant IT configuration and reconfiguration to fit my needs. Does it allow for do-it-yourself adaptation?

What are the Essential Tips in Implementing GRC?

  • Define your program objectives, timelines, and success measures.
  • Implement the most critical elements first and build on successes. Communicate broadly across the organization (as well as to partners and third parties), extend your GRC practices and expectations across locations, teams, subsidiaries, partners and third parties.
  • Identify key early adopters in the business (by team/division/location/role) that can champion the solution, celebrate accomplishments and wins, and drive employee awareness and engagement.
  • Keep detailed records, maintain due diligence, and adapt the program as reporting, analytics, and analysis dictate. It is sure to change over time as the business grows or changes. And accessible records on GRC program structure, activities, and efforts are essential for audits, investigations, and potential enforcement activity.
  • Recognize that a GRC program is dynamic – a living program – that must be nurtured, adapted, and delivered and adjusted consistently and constantly.             

What are Common GRC Tools?

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:      

GRC Software for Compliance, Risk, Audit, and Vendor Management

These tools help organizations

  • track and manage compliance requirements across multiple regulatory bodies and industry standards.
  • assist in identifying, assessing, and prioritizing risks to an organization and its assets
  • manage audit process, including planning, scheduling, executing, and reporting on audits
  • assist in managing incidents, including data breaches, security breaches, and compliance failures
  • manage and track policies and procedures, including policy creation, revision, and distribution
  • manage and monitor third-party vendors' compliance with regulatory requirements and contractual obligations
  • assist in developing, implementing, and managing business continuity plans and strategies to ensure business operations can continue in the event of a disruption or disaster

Explore MetricStream BusinessGRC Product Suite      

GRC Software for IT Governance, Risk, and Compliance (IT GRC) and Cyber GRC

These tools help organizations:

  • manage IT-related risks and compliance requirements, including data privacy and security regulations, and compliance with frameworks such as NIST, COSO, PCI-DSS, etc.
  • streamline creation and management of IT policies
  • identify, assess, mitigate, and monitor IT vendor risks and manage vendor compliance
  • simplify the identification, collation, prioritization, tracking, and remediation of cyber and information security threats and vulnerabilities

Explore MetricStream CyberGRC Product Suite      

GRC Software for ESG

These tools help organizations:

  • streamline all organizational requirements relating to Environmental, Social, Governance, Risk and Compliance (ESGRC), including managing ESG standards, frameworks, and disclosure requirements

Explore MetricStream ESGRC Product Suite         

What are the Challenges of GRC Implementation?

While implementing a GRC framework, it is common for organizations to face certain challenges. Common challenges include:

Embracing change

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.

Siloed Information

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.

Organizational Integrity

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.

Communication Barriers

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.      

How to Implement an Effective GRC Strategy?

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.        

How Can MetricStream Help with 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.

  • BusinessGRC connects across risk, audit, and compliance to bring insights that can be used to build resilience and as a strategic competitive advantage.
  • CyberGRC ensures active cyber risk and compliance management through improved visibility and a comprehensive IT and cyber risk and compliance framework aligned with recognized security standards.
  • ESGRC streamlines and automates ESG risk assessment, management, and monitoring across the enterprise and third-party ecosystem, while also simplifying ESG compliance and disclosures.

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