Without a doubt, it is a difficult challenge to navigate today’s business world. Many different steps and risks are associated with even the most basic pursuits. Never mind, trying to expand. What was once commonplace for businesses: achieving goals, sustaining performance, and increasing resiliency are now arduous, with issues arising at every turn. A range of roles, business units, and departments must collaborate to achieve these goals, which is sometimes a tough task due to the silos that organizational structures tend to generate.
Many businesses are implementing what is known as a Governance Risk and Compliance framework. This is a set of policies and processes that help companies achieve their goals, deal with uncertainty, and act ethically to solve this challenge.
This article will look at GRC and why you need a solid Governance Risk and Compliance Framework.
Defining Governance Risk and Compliance (GRC)
Putting it simply, Governance, Risk, and Compliance refers to a company’s overall strategy and approach to ensuring that its governance, risk management, and compliance policies are in line with industry standards.
Three factors make up the scope of governance risk and compliance framework:
- Governance: assumes an oversight role and how businesses manage and minimize their risks.
- Risk Management: enables a company to assess all of its business and regulatory risks and controls and keep track of all of its mitigation efforts systematically.
- Compliance: ensures that a company’s procedures and internal controls are adequate to meet the requirements of government agencies, regulators, industry standards, or internal rules.
The Importance of an Integrated Government Risk and Compliance Framework
Even though reporting requirements overlap, many firms find themselves handling their governance, risk, and compliance operations in silos. The decision to deploy software solutions to facilitate these activities was tactical, without considering a broader set of requirements. This list of requirements results in corporations ending up with hundreds of such systems to handle specific governance, risk, and compliance efforts, each functioning in its silo.
Today, the majority of businesses find themselves in this predicament. Due to redundant and conflicting processes and paperwork, they soon discover that various systems produce confusion as multiple risks and compliance activities become more entangled from regulatory and organizational perspectives.
You can readily handle the difficulties mentioned above by implementing an integrated GRC process and a single framework to manage the organization’s diverse governance, risk, and compliance initiatives. A strategy like this can:
- Provide a clear, unambiguous method and a single point of reference for the organization, significantly impacting its effectiveness.
- In numerous endeavors, eliminate all duplicate work.
- Eliminate duplicative software, hardware, training, and implementation expenses as numerous governance, risk, and compliance projects can be managed with one single solution.
Ultimately, companies must first put out a GRC solution framework to identify what makes a GRC solution.
The Capabilities of the GRC Solution
A Governance Risk and Compliance framework identifies a full set of GRC capabilities and serves as a baseline for determining whether a solution is a GRC solution or a point solution. The capabilities of a GRC solution includes:
Due to rising shareholder movement and regulatory scrutiny, corporate boards and management teams are more engaged than ever before on governance-related issues.
With that, the definition and communication of corporate control, key policies, enterprise risk management, regulatory and compliance management and oversight, and evaluating business performance through balanced scorecards, risk scorecards, and operational dashboards are all part of a company’s governance process.
A governance process incorporates these factors into a unified strategy to drive corporate governance. Governance comprises the following:
- Board Compliance Capabilities
- Business Performance Reporting
- Enterprise Risk Management and Assessment
- Policy Management, Documentation, and Communication
Due to recent legislative mandates and increasingly activist shareholders, many businesses have grown more aware of identifying and managing risk areas in their operations, whether financial, operational, IT, brand, or reputation-related risk.
Executives and boards of directors want visibility into exposure and status to successfully manage the organization’s long-term plans. These risks no longer get regarded as the sole responsibility of specialists.
Ultimately, businesses are attempting to systematically identify, quantify, prioritize, and respond to all forms of business risks and manage any exposure that arises as a result. With a defined procedure to identify, measure, and manage risk, a risk management process provides a strategic orientation for firms of all sizes in all countries. Risk management comprises the following:
- Risk Analysis and Prioritization
- Risk Analytics and Trend Analysis
- Risk Assessment
- Root Cause Analysis of Issues and Mitigation
Companies scramble to meet deadlines to comply with regulations. Thus, an initiative to comply with that regulation usually begins as a project. Because achieving the deadline becomes the most important goal, these initiatives consume a lot of money.
On the other hand, compliance is not a one-time occurrence; businesses recognize that you must make it into a repeatable process to maintain compliance with regulation at a lower cost than the first deadline.
When a company is dealing with many regulations simultaneously, it is vital to have a streamlined procedure to ensure that each of these projects complies. Otherwise, costs will spiral out of control, and the risk of non-compliance will increase. Organizations can make compliance repeatable through the compliance process, allowing them to maintain it at a lesser cost regularly. Compliance comprises the following:
- Assessments and Audits
- Flexible Controls Hierarchy
- Issue Tracking and Remediation
The most tightly regulated industries, such as financial services, energy, and healthcare, require the most integrated GRC solution. Still, any business, large or small, public or private, can benefit from a GRC solution.
Everything in the organization is aligned around the right objectives, actions, and controls to achieve organizational success when GRC gets done correctly. The risk is no longer feared, avoided, or reduced in today’s world. Risk management becomes a tool for enhancing performance and generating strategic value.
For risk approach, installation, design, solution setup, infrastructure, go live, and business as usual support, the iTech team has substantial Governance Risk Compliance expertise. The consultants at iTech are well-versed in the design, implementation, and maintenance of OpenPages with Watson.
Leave it to iTech to secure your Governance and Compliance framework.