The concept of governance, risk and compliance (GRC) isn’t new. However, the process of implementing GRC in an integrated and synchronised manner, aligned with business processes and strategic objectives, is something many organisations continue to struggle
with. Integrated GRC demands that several roles work in harmony. Audit, risk management and compliance teams must come together to share information, data, assessments, metrics, risks and losses.
GRC is geared up for companies to collaborate and pull together information and activities across the enterprise. If implemented effectively, it enables stakeholders to predict risks with greater accuracy and capitalise on the opportunities that truly matter
to each business. Often though, GRC initiatives are fragmented and addressed in an ad-hoc manner by different departments working within their limited spheres.
This approach prevents senior management from gathering a clear and expansive view of the risks faced by the organisation, along with the measures implemented to deal with those risks. The ideal state is an integrated approach to GRC wherein audit, risk
and compliance management activities are integrated. Simultaneously, a centralised view of risk is provided to the executive leadership team to help them understand enterprise-wide risks more clearly.
By adopting an integrated GRC programme, process owners at the business unit level can independently assess and manage their own risks and compliance requirements. At the same time, key risk and compliance metrics can be rolled up to the top of the organisation
for reporting and analysis.
Why integrate GRC?
Risk and compliance information in the right format, at the right time and in the right hands is key to organisational success. It supports quick and informed decision-making, which can save an organisation from financial and reputational loss, data breaches,
compliance violations and more. Stakeholders need to always be mindful of issues such as ineffective controls, unmitigated risks and policy conflicts. The path to achieving this objective lies in integrating GRC.
Some of the benefits of integration include:
- Continuous collaboration across assurance functions, which creates a holistic picture of risk
- A “single version of the truth” provided to all employees, auditors and regulatory bodies
- Accuracy of risk and control information that enables stakeholders to make fast, risk-informed business decisions
- Effective compliance programmes to address constant changes in regulations, technology and the business
- Consistency in GRC measures and comprehensive insights into the internal operating environment
- Ability to respond proactively to risks by breaking down restrictive functional, business and organisational silos
- A unified operating model for the business with the agility needed to manage emerging risks
- Lower cost of assurance
Practical steps to strengthen GRC integration
The key is to start small. Implement a phased GRC plan with clearly defined roles and priorities for each stage, ensuring that everybody understands what is required. Remember that governance, risk and compliance are connected but also separate disciplines
that require their own strategies, steps and procedures. That level of flexibility must be built into the GRC programme while also ensuring certain elements are consistent across all three disciplines.
When establishing an integrated GRC programme, focus on the foundational elements first. These include defining and aligning policies, establishing common risk and control taxonomies, consolidating GRC data in a central repository, defining the scope of
each group in GRC and establishing points of integration between them. The design of this GRC framework is critical to driving successful results.
One of the biggest obstacles in cultivating a risk-aware culture is inadequate governance. If the organisation does not establish a clear vision and tone at the top, then it cannot expect a culture committed to risk management further down the chain. A lack
of governance can also create difficulty in terms of cross-functional collaboration which can result in inadequate allocation of resources for GRC or even conflicts of interest between assurance functions.
The senior management and board of directors must assume the ultimate responsibility for ensuring the efficiency and effectiveness of GRC processes. Another best practice is to develop a set of key performance indicators (KPIs) to measure the effectiveness
of GRC activities. The way to do that is to assess the organisation’s needs, culture and requirements and determine the parameters that make GRC departments effective. Also, ensure the data produced in one department can be reused in another one to maintain
Many organisations are striving to standardise their GRC processes which allows them to quickly identify risks and expedite mitigation action. One of the best ways to improve GRC efficiency and minimise unnecessary costs is to use technology.
There are tools to automate and streamline audit, risk and compliance management processes, as well as systems to import, aggregate and process GRC information from various sources such as cloud security applications and transaction systems. This data can
then be quickly routed for reporting and visualisation.
A comprehensive GRC solution can provide the ability to map GRC data in such a way that users immediately understand the relationships and interactions between various risks, regulations, policies, controls, strategic objectives and other elements. Such
a solution can enable users to harmoniously manage risk, compliance and audit by breaking down restrictive silos and facilitating robust information sharing and decision-making.
GRC integration equals an intelligent investment
In a business environment, where executives are under immense pressure to demonstrate high performance, a strongly integrated GRC programme can make all the difference. The market rewards risk takers but to play the high stakes game, processes need to be
in place. In fact, the cost of not establishing a formidable GRC infrastructure is much higher than the cost of investing in one.
Each company should decide whether they want to live with the threat of punitive and legal damages that could go beyond financial stress or build a preventive mechanism that helps them maintain control and balance risks and opportunities effectively.
In recent years, there has been a perceptible shift toward a cohesive and technology-aided approach to enterprise-wide GRC. More risk professionals using this approach are realising incremental ROI while saving on resources. For all these reasons, a harmonious
integration of GRC has proved to be transformational.