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What is GRC – and why is it so important?

What is GRC?

GRC – Governance, Risk and Compliance – is what aligns your business objectives with sustainability and integrity.  

Audits, policies, assessments, reporting and dedicated GRC software intertwine to meet GRC requirements.  

However, its real purpose is to protect: 

  • Your organization – from the broad scope of risks across departments and third parties 
  • Your reputation – and the collateral damages noncompliance can lead to  
  • Your employees – from harm and the fallout of disruption 
  • The future – by guiding you to make informed and sustainable decisions

Governance, risk and compliance: building future resilience

GRC is more than a checklist. It’s a commitment to fostering a culture of integrity and ethical conduct, preparing your organization for the future. 

It’s also about embracing risks as opportunities to improve, boosting trust from within and outside the business. 

At NAVEX, our 35 years of global compliance experience mean we know a few things about tailoring GRC strategies to meet unique challenges.

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The essential role of GRC 

An effective GRC program is like a dedicated safety crew in the background of your operations, assessing the many gears and cogs to make sure they’re always fit for purpose.

Is something malfunctioning? Is someone likely to get hurt? Is there a new requirement we must meet? 

Or is there simply a better way for something to be done? 

GRC identifies these issues and guides you to the best course of action. GRC software is an integral part of taking on these questions, absorbing the data in their answers and finding the best way to adapt.

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Who is GRC for?

From nimble tech startups to manufacturing powerhouses, GRC is universal. We live in a world where consumer trust and corporate accountability are public knowledge – which makes transparency and accountability essential, whatever your industry or company size.  

GRC solutions provide the assurance of integrity that all organizations should envision as part of their future success. While there will be common ground in every GRC program, an effective framework should be relevant to your unique risk landscape.  

GRC software helps you understand that landscape and adjust your framework to it.

How to build and maintain a successful GRC program

Effective GRC strategy requires confidence, the right skills and people, defined roles and responsibilities and the ability to dodge common pitfalls.  

Here’s a guide on the core elements and what it takes:

Building a future-friendly GRC framework

1
Understand your organization

Analyze your organization’s objectives across all business areas and pinpoint potential risk areas. Ensure the roles assigned to this exercise have the necessary skills and authority to  complete a deep dive.

2
Identify and assess risks

Highlight potential risks that might get in the way of your organization’s objectives, then evaluate and prioritize those risks.

3
Develop policies and procedures

Create guidelines for how your organization will handle risks, comply with regulatory requirements and store this data. You should also detail what might trigger changes to guidelines and who needs to authorize them.

4
Implement control measures

Focus on strategies for handling risks. This might involve introducing GRC software, altering processes, training employees or adding new oversight structures.

5
Monitor and review

Track your organization’s performance against GRC objectives, using regular audits and reviews. The more data accounted for, the better. Adjust your framework as you go.

6
Report and communicate

Maintain transparency with all stakeholders regarding your GRC efforts. This includes regular updates to the board, employees and (if relevant) the public.

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GRC roles and responsibilities

The success of your GRC program depends on the people driving it. Key skills for GRC roles include analytical thinking, strong communication, knowledge of industry regulations and a proactive approach to risk management.  

At the helm, the board of directors drives your organization’s values, ethics and risk appetite. Your executive management translates this vision into a concrete strategy; GRC management specialists, such as chief compliance officers and risk managers, then design, implement and manage the program, aligning it to your organization’s goals.  

Employees play an integral part in the execution of the program, embodying the success of training and policies and reporting potential risks when a program is successful. Internal audit teams assess the effectiveness of the GRC framework in action, pinpointing areas of improvement. 

Lastly, your GRC program extends beyond the organization itself. Customer, supplier and regulator perceptions and requirements will also influence its evolution. 

Remember – fostering a culture of compliance and ethics is as crucial as the skills of the designated roles managing your GRC framework.  

The behaviors and choices of your leadership team, its attitude towards employees who report issues and overall executive transparency will impact the success of your GRC initiatives.

The key ingredients in program success

A successful GRC program is about more than avoiding common pitfalls. It’s about ensuring your approach is equipped to evolve as your organization and the world does.  

Here’s what’s needed to get your program right and keep developments sustainable:

1
Customization

Avoid a generic approach. A one-size-fits-all approach might overlook your unique challenges and risks.

2
Leadership commitment

Executive buy-in can drive change and ensure your GRC initiatives take root and flourish.

3
Effective communication

Clarity drives compliance and commitment. Everyone should understand your program and its purpose from your training and resources.

4
Ensure sustainability

A GRC program is a long-term commitment. Keep sustainability in mind by adapting to regulatory changes, evolving industry practices, and maintaining a culture of compliance and ethical conduct.

5
Education

Train all employees in GRC principles. An informed workforce is the first line of defense against risk.

6
GRC software

Harnessing the power of GRC tools automates processes, provides deeper analytics and reduces the risk of human error.

Remarkable results in GRC

Shoring up a more ethical culture, improving how well your policies work and reducing the risk of bad press are just three of the many benefits of investment in GRC. 

Read more on the transformative potential of effective GRC programs in our case studies: Bumble Bee Seafoods and The Toledo Clinic.

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Empowering strategies with GRC tools and software

GRC is only as useful as it is relevant.  

An outdated GRC program is a business risk – no matter whether it’s a regulatory requirement that needs updating or a new reference to conflicts of interest in internal policies. 

Access to the data on what you need to improve, and having the flexibility to make those changes quickly, are where powerful GRC software truly gives an edge in visibility. 

The world’s most trusted organizations use a dedicated GRC platform to oversee and manage all elements of their GRC program in one unified place. No system silos in sight.

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GRC tools for risk management and beyond

On the bottom line, GRC software helps you transform complexity into clarity in your business operations. 

Imagine a unified system linking employees, third parties and business processes seamlessly. Through this lens, you can find strengths, uncover areas of improvement and ensure your objectives are always aligned with your strategy. 

Embracing risk management software

Anticipating potential risks before they happen sounds like a fictional superpower – but for your organization, it could be reality. 

To proactively spot, assess and tackle risks before they escalate into harm, integrated risk management software helps embed a proactive approach driven by your unique risk profile and analytics.  

By identifying risks early, risk software can help you turn potential threats into opportunities for improvement and growth.

What will the future of GRC look like?

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Cultural transformation and a mature GRC landscape

In our vision of the future, GRC isn’t just about checks and balances. It’s about transforming corporate culture to build a better, more sustainable future. 

We see GRC entering an era of embedded integrity and ethics in everyday operations. Meshed with the cultural fabric of every successful organization, it will promote responsibility, accountability and trust.  

Compliance obligated by regulations will meet a commitment to good governance for what good it brings – not what corporate disasters it avoids.

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A collaboration of people, processes and tools

People, processes and tools: each component will be essential to GRC.  

People will be empowered with knowledge and training; processes will be more streamlined as AI and machine learning add layered intelligence and perception; GRC tools will be faster, smarter and better integrated.  

It’s not just about adopting new GRC software or the latest update – the future is about efforts to collaborate in a way that lets every strength shine.

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GRC and the AI frontier

The GRC of the future will be more predictive, intelligent and in tune with complex issues. The rising influence of AI and machine learning is already transforming the GRC landscape; advanced predictive analytics is the next frontier. 

Machine learning algorithms will enhance the ability to analyze complex data sets, highlighting patterns and insights a human analysis might miss. This isn’t about replacing human decision-making but augmenting it, using AI to filter through the noise and quickly bring critical issues to light.

Frequently asked GRC questions

What activities does GRC consist of?

GRC comprises strategies, methods and tools to manage a company’s overall governance, risk and compliance. Some GRC activities include managing company policies, setting up control measures, identifying risks, ensuring processes and procedures are compliant and compiling reporting across all GRC-related activities.

How are governance, risk and compliance different?

Governance, risk and compliance, though interconnected, are separate from one another. Governance is all about making decisions and putting them into action – it’s how an organization is steered. Risk, on the other hand, is about spotting, assessing and dealing with potential threats to the organization’s survival or success. Lastly, compliance is about making sure the organization meets all laws, standards and regulations it needs to follow.

What's the difference between GRC and ERM?

Enterprise Risk Management (ERM) is a part of GRC that zeroes in on risk. ERM’s job is to identify, assess, manage and control the various types of risk within an organization – think of ERM as a subset of GRC with the specific purpose of dealing with risk management.

What's the difference between IT Risk Management and GRC?

IT Risk Management is another subset of GRC focused on tackling technology-related risks, such as cybersecurity threats or system glitches. On the other hand, GRC isn’t limited to tech concerns – it also covers broader areas like corporate governance and compliance with regulations. While IT Risk Management is all about technology risk, GRC covers this area of risk plus a whole lot more.

Is GRC considered cybersecurity?

While GRC is an essential part of a strong cybersecurity strategy, it is separate. GRC in cybersecurity involves setting appropriate rules (governance), identifying and managing online threats (risk) and ensuring an organization is compliant with relevant cyber laws and regulations (compliance).  

So, while cybersecurity focuses on protecting data and systems from cyber threats, GRC ensures that the strategies and practices used to achieve this are effective, compliant and aligned with the organization’s goals. 

GRC in Cybersecurity 

GRC plays a critical role in cybersecurity. It ensures appropriate governance is in place, cybersecurity risks are properly managed and your organization acts in compliance with relevant laws. So, while GRC is not synonymous with cybersecurity, it’s a key component of a comprehensive cybersecurity strategy.

Is GRC part of ESG?

While GRC and ESG (Environmental, Social and Governance) complement each other and share some common ground – especially around governance – they have different focus areas. 

GRC focuses on protecting the organization and ensuring it operates within the boundaries of acceptability and the law. 

ESG has a different angle. Alongside governance, ESG also addresses environmental and social responsibility, which can range from an organization’s carbon footprint and waste management to the wellbeing of employees, diversity initiatives and community engagement. 

While ESG doesn’t focus on risk and compliance in the GRC sense, these elements are still relevant within the areas it focuses on. For example, environmental and social responsibilities can pose risk factors if not managed properly. There are also often elements of compliance in meeting environmental and social regulations.

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Ignite your GRC transformation

Tapping into the engine of GRC means you’re not only managing risks. You’re also seizing opportunities and fortifying trust from within. Whether safeguarding reputation, fostering a safe environment for employees, or making informed and sustainable decisions, GRC is your guiding compass for a sustainable future. 

With NAVEX One GRC software, you can unlock the power of informed and resilient GRC strategies across your organization and beyond.  

Get in touch to chart your course to a culture of integrity and future success. 

Your GRC transformation awaits!