What is Governance, Risk and Compliance (GRC)?

Governance, Risk and Compliance (GRC) is a strategic framework designed to synchronize activities across governance, risk management and compliance. GRC allows businesses to operate more efficiently by enabling effective information sharing, reporting activities more accurately and avoiding wasteful overlaps.

While GRC is not a new concept, today’s dynamic regulatory and risk landscape has prompted businesses to take an integrated approach to GRC management. This allows businesses to mitigate risks and take advantage of new opportunities while always ensuring compliance with legal and regulatory demands.

Why is Governance,

Risk and Compliance Important?

Governance, risk and compliance are more important now than ever before. Businesses must comply with a rapidly growing number of regulations, new compliance challenges and sophisticated risks. As businesses grow and become more complex, so do their siloed governance, risk and compliance activities.

To identify and respond to diverse risks, ensure compliance, and follow internal and external procedures and regulations, businesses need to operate as a cohesive unit while simultaneously having visibility into every corner of operations.

This is where GRC comes in.

While most businesses practice governance, risk management and compliance to some degree, it’s typically done so in an isolated environment with little to no overlap. In this divided approach, governance, risk and compliance operate as separate entities, each hosting its own individual processes, procedures, people and priorities relevant to its specific objective.

This leaves businesses with a lack of transparency and understanding of how the action of one branch impacts the entire system. As a result, the organization can’t see its intertwined risks, and it suffers from vulnerabilities, duplicated work, opposing actions and inaccurate insights.

The GRC framework synchronizes governance, risk and compliance activities and illuminates areas of overlap, from processes and procedures to rules and regulations. As a result, businesses can streamline operations to meet their larger goals and business objectives more efficiently.

The Governance, Risk and Compliance Framework

The GRC framework is made up of three pillars: governance, risk management and compliance. The integrated framework allows businesses to take a more holistic approach to GRC-related activities, objectives and processes.

1. Governance
   Governance refers to the conduct of an organization, encompassing all internal guidelines and rules for business operations to ensure the organization is run lawfully and transparently. In the GRC framework, governance helps businesses align risk and compliance management with their overall business strategy by defining the guidelines that will help meet their goals.
2. Risk management
   Risk management refers to identifying and managing potential financial and operational risks that could threaten the success and survival of a business, including analyzing the impact and likelihood of potential threats and developing strategies to mitigate them. A comprehensive approach to risk management gives businesses ultimate visibility, helping them avoid impact and make quick, strategic decisions based on accurate insights.
3. Compliance
   Compliance ref ers to the organization’s conformance with regulatory requirements, laws and external policies. Regulations can impact highly specific areas in an organization—from data retention to employee licensure—so it’s imperative for businesses to have a comprehensive approach to ensuring compliance. When compliance activities are combined with governance and risk management, businesses benefit from better transparency and enterprise-wide compliance.

Governance, Risk and Compliance Processes

Governance, risk and compliance processes refer to the steps or methods each discipline follows to meet its objective. While the specific tasks may vary between each discipline, a unified GRC system aligns all processes involved to ensure enterprise-wide governance, risk management and compliance.

For example, if a business must follow a new federal regulation regarding data protection, the individual governance, risk and compliance processes work together to enact a successful data protection strategy. These processes might include:

• Risk Management – Identify potential threats to data security, vulnerabilities and processes that could impact the risk landscape.
• Governance – Utilizing risk-related insights, governance defines the policies and procedures to protect sensitive data, including who has access to what information.
• Compliance – Reviewing risk-related insights and newly enacted policies and procedures, compliance ensures that the company’s data protection strategy aligns with the regulatory standards.

This coordinated effort ensures the proper steps are taken to minimize risk, prevent vulnerabilities and ensure compliance with legal requirements.

These processes are typically implemented through a GRC software solution, which helps visualize the separate steps each entity must take to meet the shared goal.

Governance, Risk and Compliance Technology

An integrated approach to governance, risk and compliance is a requirement for operational success, but aligning something this robust is easier said than done.

That’s where governance, risk and compliance technology solutions come into play.

GRC management solutions seamlessly integrate and coordinate all governance, risk and compliance initiatives and activities easily and efficiently. These solutions are designed to help organizations streamline and automate their GRC-related processes, which is essential for businesses looking to stay competitive, create strategic value, elevate performance, protect their reputation and ensure long-term success.

What are Use Cases for Governance, Risk and Compliance Tools?

GRC tools can be utilized in a wide range of areas, with shared data helping to further drive better results and build a stronger, more resilient organization.

1. Risk Management– Identify, analyze and mitigate operational risks, such as financial or security risks. Understand the financial impact or probability of risks, and initiate measures to manage risks or to reduce their consequences should they occur.
2. Issue Management – Detect issues and prioritize them based on severity, potential consequences and overall risk appetite to focus on the most critical issues that require immediate attention. Implement action plans to promptly address the identified issues, and get real-time progress updates and insights into issue management performance.
3. Survey management – Create customized surveys, define roles, such as survey managers and interviewees, set deadlines for completion and establish survey distribution methods to help audit suppliers, analyze business impact and more.
4. Compliance Management – Ensure compliance with regulatory standards and laws by monitoring and tracking changes in the regulatory environment and align processes with regulatory changes. In addition, powerful tools allow you to automate compliance tasks and generate reports for regulatory bodies.
5. Policy Management – Today, publishing corporate guidelines isn’t enough. A fully integrated policy management workflow allows businesses to cross-reference policies with regulations, risks and processes. Establish and enforce policies across the organization, then continuously track compliance with these policies and identify areas of non-compliance.
6. Incident Management – Get notified when incidents occur and respond with a clear picture of what happened, who was involved and what actions were taken.
7. Business Continuity Planning – Plan for and mitigate the impact of potential business disruptions by identifying critical business functions and processes, assessing the potential risks to these and developing strategies for recovery.
8. IT Governance– Manage and optimize IT resources effectively, ensuring alignment with business goals and compliance with IT-related regulations and standards.
9. Continuous monitoring – Enable detective and preventive GRC with real-time insights. Businesses can automate tasks to increase productivity and monitor GRC with transparency of every single process to make better decisions.
10. Audit Management – Manage all audit-related tasks in an integrated end-to-end process-driven approach. Eliminate room for human error and save time by streamlining the audit process with automation, from data collection to reporting, and a seamless audit trail.

Key Considerations to Master GRC

When choosing a governance, risk and compliance management solution, ask yourself…

• Can you control and mitigate risk by ensuring compliance with all relevant laws and regulations?
• Will you have adequate controls without adversely impacting daily operations?
• Can you take a process-focused approach to risk and compliance management?
• Are you able to manage compliance activities comprehensively, from testing to external audit?
• Can you automatically escalate issues for resolution?
• Will you have access to real-time, accurate data to drive important decisions?

The Business Benefits of Compliance and Risk Management Solutions

With a solution that takes a process-focused approach to implementing and operating an enterprise-wide compliance and risk management system, like ARIS, businesses see benefits such as…

• Reduced Time & Costs – Reduce manual work and auditing efforts with automated processes and a powerful methodology toolbox. Save time by testing workflows and automated email notifications. Re-purpose documentation to help offset auditing fees.
• Confident Decision Making – Visualize top-level key performance indicators, analyze data and confidently report accurate insights, including the development of a risk situation or compliance activity, via a graphical dashboard.
• Adaptability – Keep up to date with new regulations and adapt to new requirements with ease. As the business scales, a powerful GRC solution adapts to ensure all governance, risk and compliance needs are always met.
• Better Collaboration – Experience better communication and collaboration between different departments with a centralized location for all GRC activities.