“Governance, Risk Management, and Compliance (GRC) are three pillars that work together for the purpose of assuring that an organization meets its objectives. … Governance is the combination of processes established and executed by the board of directors that are reflected in the organization’s structure and how it is managed and led toward achieving goals. Risk management is predicting and managing risks that could hinder the organization to achieve its objectives. Compliance with the company’s policies and procedures, laws and regulations, strong and efficient governance is considered key to an organization’s success.”
GRC is a discipline that aims to synchronize information and activity across governance, risk management and compliance in order to operate more efficiently, enable effective information sharing, more effectively report activities and avoid wasteful overlaps. Although interpreted differently in various organizations, GRC typically encompasses activities such as corporate governance, enterprise risk management (ERM) and corporate compliance with applicable laws and regulations.
Organizations reach a size where coordinated control over GRC activities is required to operate effectively. Each of these three disciplines creates information of value to the other two, and all three impact the same technologies, people, processes and information.
Substantial duplication of tasks evolves when governance, risk management and compliance are managed independently. Overlapping and duplicated GRC activities negatively impact both operational costs and GRC metrics. For example, each internal service might be audited and assessed by multiple groups on an annual basis, creating enormous cost and disconnected results. A disconnected GRC approach will also prevent an organization from providing real-time GRC executive reports. Like a badly planned transport system, every individual route will operate, but the network will lack the qualities that allow them to work together effectively.
If not integrated, if tackled in a traditional “silo” approach, most organizations must sustain unmanageable numbers of GRC-related requirements due to changes in technology, increasing data storage, market globalization and increased regulation.