Governance Risk and Compliance has become a necessary function for the success of the various operations in an organization. It also enables the organization to:
- Prioritize and manage the expectations of the stakeholders
- Set objectives of the business which are in harmony with the risks and values
- Achieve business objectives while optimizing the risk profile and protecting the value
- Operate within various contractual, internal, ethical, legal and social boundaries
- Easy measurement of performance and effectiveness of the system
- Provide reliable, timely and relevant information to the stakeholders
Why GRC Matters to Organizations?
The recognition of Governance Risk and Compliance in organizations as a vital organizational function has been increasing. However, recent statistics show that there is a major gap between recognizing the risk factors and taking steps to avoid them. Some details of that study are provided below;
- 65 percent of executives believe that they have established security plans, but only 17 per cent of them meet the capability and preparedness criteria
- More than 75 percent of executives believe that their organizations do not have a reliable risk management process
- Only 30 percent of the organizations have explicit guidelines to assess the probability of risk and its impact
- 63 percent of organizations admit to being unable to follow the compliance guidelines completely
GRC is essential. However, these set of processes within the organization are vast and need seamless execution. Too often, organizations have various groups that are responsible for all the process. These groups work in silos, and refrain from sharing information and have numerous frameworks and systems for operations. The problems result in decreasing the working efficiency by building gaps and reducing the view of the organization to assess risks.
Moving forward, to solve these issues, organizations need to improve and innovate their efforts in integration governance, risk and compliance functions in their applications and processes.
Also read, 5 Benefits of Forming an S-Corporation
How Organizations Can Innovate Their GRC Efforts?
Take an enterprise view:
The concept of governance risk and compliance management is not new to enterprises. However, over the time GRC management has grown to include various other aspects such as;
- Business continuity
- Third-party risk management
- Operational risk
- Incident management
Commonly all these components are managed individually across multiple teams for better efficiency. While this divided approach is a simple way of getting work done, it has become imperative for organizations to take a complete enterprise view of their risk and compliance management. Without proper enterprise view, gaps that form between the different silos in business can harm the business models.
Effectively leverage data:
With a complete view of the functionalities, enterprises need comprehensive data analysis to support conclusions and decisions. It becomes quite hard to detect risks and missed opportunities without leveraging data effectively. The availability of multiple technologies and documents creates a hassle while analyzing data. Without possession of efficient technology for reporting and analysis of the generated data, one cannot harness its full potential. Proper data governance and oversight over operations helps in checking the reliability of the data.
Better internal collaboration:
Fostering proper internal collaboration is a tricky process for enterprises. However, it is essential for governance, risk and compliance management. Enterprises that emphasize breaking the silos between teams have better risk management and compliance adherence. Good internal collaboration improves;
- Engagement in numerous areas for risk assessment
- Policy review
- Incident management
- Fraud prevention
Proper mapping of risks:
Enterprises can remove the gaps in their GRC program as it is dependent on a simple process; to accurately map all the risks with a control. It is always easy to identify risks but is comparatively harder to determine the control that goes along with it. Every risk requires a control and every control used or applied requires testing. Once an organization maps the risks assign it a control, it is essential to check if there is a residual risk remaining after.
In a nutshell, one can say that with the elimination of silos that stop the proper connection between business functionalities, GRC can be innovated efficiently. It requires an organizational effort rather than an individual effort to benefit entirely from the governance risk and compliance practices.