Governance, risk-management, and compliance all sound terribly weighty. What does GRC mean in practice, and should you be doing anything differently? GRC is an acronym that first appeared on the scene in the early 2000s. Given that you probably have an idea of what each of the words in the acronym means, does bringing them together change anything? Let’s take a look!
The problem with most definitions is that they try to say a whole lot in only a few words, and the definition of GRC is among these. We can define it as a set of capabilities that helps your organization to reach its objectives, practice risk management to deal with uncertainties and to navigate dangers, and respond in accordance with a high standard of ethics.
So far, nothing sounds particularly out-of-the-way or strange. You’re probably doing a lot of different things to achieve these goals already. So why the new field? The key here is the word “integration.”
Siloed Governance, Risk Management, and Compliance
The problem with all the activities that relate to GRC in normal organizations is that they aren’t drawn together. Your business probably has them spread across several departments. Activities take place in silos. There’s a lack of unified effort. The consequences can be unpleasant.
Apart from spending more money on the kind of activities that could be bundled into GRC, the lack of cross-pollination means that risks may not be identified or people may not know what to do if a risk comes from outside the organization. That may make it hard to forecast and measure performance in a way that takes risk into account.
The bottom line of all of this is a lot of unpleasant surprises; work wasted on objectives that don’t serve your company well; the implementation of less-than-ideal business strategies; and overall business performance not being as good as it might have been.
In this model, people still get on with work in their usual departments and areas of specialization. The difference is that each person involved with GRC will have access to the information they need, will share objectives that will benefit the company, and that there are controls to manage risks and ensure ethical choices.
Well-integrated GRC improves resilience during tough times, improves productivity, and ensures clearer, more effective communication. To achieve all this without creating an unnecessarily complex jumble, you’ll need the right software to draw all the people, information, and controls together plus a dashboard that allows you to monitor progress with ease and intervene when necessary. Can you remember what a difference advances in accounting software made to your business? Now consider the benefits that can flow from something so much more all-embracing.
Doing it Better
Your business already does everything in its power to ensure good governance, intelligent risk management and compliance. But by introducing an integrated model it becomes much easier and leaves less room for errors to slip in. You also save time and with that, money. If this resonates with you, it’s time you looked further into the matter to see what it could mean for your business. It could be just what you need to optimize your business’s overall performance.