Meeting business objectives is crucial to delivering products and services to the market. Failing to do so gives your competitors an advantage. It may also reduce your market share and profitability. This is where governance, risk, and compliance (GRC) comes in.
To streamline your business and maximize your bottom line, you need to adhere to the best practices. This will mitigate threats to productivity. For instance, you need to adhere to legally required regulations. You also need to align with de facto standards. You’ll find many businesses will align to SOX, HIPAA, PCI-DSS, and ISO standards to improve their performance.
Often, businesses will invest in personnel development. To this end, they’ll implement hiring policies that take into account diversity, age bias, and skill gaps. To complement workers, the technology and infrastructure need to be in line with business requirements. Failing to get a balance at different business maturity levels will create bottlenecks and stunt growth. This gives your competitors an advantage and fails to establish your brand as a moat in the market sector. GRC is a framework that’ll help you achieve this balance.
Here, we’ll look into what GRC is and how we can use it to optimize a business’s operations. First, let’s learn what GRC is.
What Is Governance, Risk, and Compliance (GRC)?
GRC was first defined by the Open Compliance and Ethics Group (OCEG) in a journal paper published in 2007. The GRC is designed to provide a coherent framework for businesses. Essentially, it aids growth with three main things. First, it establishes a business governance model. Then, GRC addresses risk to the business. Finally, it integrates compliance with best practices and legal requirements. The GRC framework is extensive, and it ensures your business has the ‘capabilities’ it needs to grow.
To implement GRC, you need to address the following areas:
- Risk, legal, finance, internal audit, compliance, Information Technology, OT, IoT, HR
- The lines of business communication and control including management teams and the board
- Work done by third parties
- Stakeholders (external)
GRC breaks down business elements, and it produces 3 core principles. Let’s take a look at these GRC principles.
Core GRC Principles
As the name suggests, GRC principles can be broken down into governance, risk, and compliance. Let’s see each of these 3 principles:
Governance determines how an organization is controlled. In GRC, governance sets your company’s direction. This includes working from a top-level mission statement. Then, you also create policy strategies that align with the statement. Yet, that’ll only take you so far. That’s why GRC provides a structured approach to monitoring performance. It creates metrics to establish a baseline. It also evaluates growth and adherence according to it.
2. Risk Management
Some risks can cause major damage and shut a business down. Even if the damages are minor, frequent risks can be very harmful. As a result, you need to mitigate or reduce all risks to your business. That includes those risks that cause damage either financially, collaterally, to personnel’s health, or the company’s reputation. GRC risk management identifies and addresses risk quantitatively. It also helps avoid or stop the damage to the company.
Compliance is the act of ensuring that a standard or set of guidelines is adhered to. These can be legal requirements in the form of regulations. Alternatively, they could be industrial best practices. You may also decide to adhere to a standard or series of standards. In that case, a third party may audit your business to provide consumer confidence. This also can boost sales and allow you to compete with competitors.
Likewise, some industries need their supply chain vendors to comply with de-facto standards for data governance. If they don’t, companies downstream won’t use them. Your business can stop dead in its tracks just because you didn’t meet clients’ needs.
You’ll often deal with groups of standards specific to one aspect of the business. For instance financial compliance to regulatory authorities, manufacturing compliance for sustainability standards, and quality management systems (QMS) standards to show relative improvement to best practices within the business.
GRC generally offers many benefits. Firstly, it helps ensure you don’t miss a best practice in each aspect of business operations. For example, you could budget and create a state-of-the-art IT system to serve your users. Yet, you may fail to comply with operations security (OPSEC) standards. This will drastically increase your risk of show-stopping attacks. Alternatively, poor governance and associate policies may mean your personnel don’t have basic training in protective cybersecurity measures.
Let’s consider another scenario. Imagine you’re manufacturing a product, but you aren’t following sustainability standards. This can get you a fine for a regulatory breach. Alternatively, people may not buy products from you. Instead, they’ll opt to buy from a more sustainable manufacturer.
Clearly then, even if you follow best practices, errors are inevitable. And this will likely undermine your company’s bottom line. But GRC helps you with that; you’re much less likely to miss any more best practices!
Now, you know why using GRC is a good idea. Next, let’s take a look at how GRC software can help integrate it into your company’s daily life.
You can use GRC software to manage governance, risk, and compliance digitally. This software also offers visualized metrics. This way, your users can access all data easily and keep it all in one place.
You’ll find many GRC software solutions on the market-place. You’ll need to decide which one is right for you. When deciding, ensure it meets every aspect of your business. The software should also be intuitive to use. Most solution providers will provide you with a free version to try out. But to help you with your decision, consider these questions:
- Does the software cover all aspects of my business?
- What features does the software have that can help me today and as the business grows?
- Who do I need to consult about the testing and purchasing of this software?
- Do I need to establish workshops with key users to help adoption of this software?
- Do I need a consultant with experience with GRC to help integrate it into my business?
Now, let’s take a look at how to implement GRC!
How to Implement GRC
In theory, you don’t need GRC software to implement GRC principles in your business. That said, modern businesses leverage IT to action business intent extensively. This also helps streamline the business.
Likewise, a software-based approach will help productivity. However, keep in mind that it can cost $200,000 to $600,000 in most cases. This is a high-value offering, so it makes sense to use a consultant. They’ll help you plan, test, and implement your chosen software company-wide.
GRC is a logical approach to defining and implementing governance, addressing organizational-wide risk, and implementing suitable compliance measures. That said, it’s expensive to install as a software-based solution. To this end, talk to the company offering the software. Get a consultant to first investigate your business. Then, see if their solution is workable. Next, test the software extensively before buying it. Additionally, ensure the software provider helps with this process.
Get the company to deliver workshops to all key users, provide documentation of the system, and help with business integration. Doing this yourself may initially lead to rejection by users. Your GRC might even get moth-balled.
Do you have more questions about GRC? Check out the FAQ and Resources sections below!
What is Governance, Risk, and Compliance (GRC)?
GRC was first defined by the Open Compliance and Ethics Group (OCEG) in a journal paper published in 2007. The GRC provides a coherent framework for businesses. Basically, it aids growth by establishing a business governance model. It also addresses risk to the business, and integrates compliance with best practices and legal requirements.
How can I reduce my business risk to cybercriminals?
Use the Governance, Risk, and Compliance (GRC) framework to help reduce your risk of cyberattack. GRC continually evaluates the risks to a company. It also ensures compliance with the best practices in every aspect of the business. That includes operations security (OPSEC). By using GRC, you’re less likely to miss areas that require further capability.
What cybersecurity risks is my business susceptible to?
If you’re not using a framework like Governance, Risk, and Compliance (GRC) you likely can’t know which attacks you’re susceptible to. GRC will include best practices for operations security (OPSEC), dealing with firewalls for cloud or cloud-hybrid businesses, or even fraud. GRC also allows you to monitor capabilities, highlight weaknesses, and provide solutions.
How can I improve my cloud-based security?
Cloud-based solutions mean users can access it from anywhere on any unsecured device. To help keep your business safe, use a firewall as a service (FWaaS). You’ll also need to train your personnel in cyberattack principles. Additionally, identify what malware to look out for. Use Governance, Risk, and Compliance (GRC) to help identify risks. This will also show you how to remediate them.
Will GRC reduce my risk of cyber threats?
Governance, Risk, and Compliance (GRC) can help reduce your risk from cyber threats like malware and bad actors. But you also need to apply and follow it correctly. GRC allows businesses to assess organization-wide risks. It also highlights compliance requirements and best practices you can follow to reduce your risks. GRC also helps protect you from digital attacks while enhancing onsite security.
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