Introduction :The acronym “GRC” stands for governance, risk management, and compliance. GRC is the term covering an organization’s approach across these three practices:
GRC is a discipline that aims to synchronize information and activity across governance, 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 and corporate compliance with applicable laws and regulations.
GRC framework and Components: The GRC framework is all of managing a company’s overall governance, enterprise risk management, and compliance through regulations. Consider it a structured approach to aligning your business objectives with IT while effectively meeting compliance demands and managing risks
The components of a GRC security framework can be divided into three major categories:
- Risk; and
Governance management covers the way that organizations are, well, governed—starting at the top. The governance components include:
- Corporate Management: How are the relationships within the organization structured? Corporate management in a GRC system framework examines these relationships and how they work to create optimum efficiency and smoothness of communication.
- Strategy Management: Who is responsible for what in the organization? What are the goals of the organization? Examining strategies to ensure that roles and responsibilities are aligned with the organization’s goals helps ensure everyone knows what to do and why they need to do it.
- Policy Management: Is there a set, consistent process/policy/procedure for everything that people need to do on a daily basis? Policy management helps create consistency across the organization so that everyone can produce consistent results.
The three components of risk management are:
- Identifying Risks. What are all of the risks that organization faces on a daily basis? What kind of accidents or attacks might affect operations? Identifying risks requires having a thorough inventory of assets and processes as well as some information about threat that may target business.
- Assessing Risks: Once you know what risks organization faces, it’s necessary to rank them by likelihood and impact. This way, you can address the risks with the biggest impacts that are the most likely to happen—helping you create the biggest ROI with the smallest cybersecurity expenditure.
- Managing Risks: After classifying risks by likelihood and impact, it’s necessary to take steps to mitigate your biggest risks. This may involve taking numerous measures—such as adding new network security tools, creating cybersecurity awareness programs, and establishing new security protocols/procedures to address specific threats.
One of the major goals of compliance management is to avoid the censure and penalties that arise from non-compliance.Key components of a compliance management process include:
1) Internal and External Audits. Organizations may have to run internal audits to pre-check for potential compliance issues. Additionally, they may need to use external auditors to provide objective reports on compliance issues in the organization.
- Compliance Research. There should be extensive research done to determine which compliance standards apply to a given organization. External auditors often can provide information based on a business’ industry, though legal counsel and/or local authorities may need to be consulted about local, state, and federal regulations that may apply.
- Security Procedures and Controls. Many compliance standards have strict requirements regarding security procedures and controls that organizations need to use. So, identifying and implementing these controls is a major component of any compliance initiative.
- Compliance Reporting.: Being able to create documentation proving that measures were taken to meet compliance standards can be a crucial, but easy-to-miss, point. Many regulatory compliance standards have strict documentation and reporting rules to follow—and may enforce penalties for failing to provide the right documentation, even if the actual guidelines are being followed. So, being able to accurately track and report compliance measures is crucial for any GRC framework.
GRC need to be embedded with business process because of the following major benefits :
- Higher quality information—Integrating GRC information allows management to make more intelligent decisions more rapidly.
- Process optimization—Non-value-added activities are eliminated and value-added activities are streamlined to reduce lag time and undesirable variation.
- Better capital allocation—Identification of areas of redundancy and inefficiency allows financial and human capital to be allocated more effectively.
- Improved effectiveness—The net effect of all the activities above means GRC activities are directed to the appropriate people and departments.
- Protected reputation—When risks are managed more effectively, company reputation is enhanced.
- Reduced costs—Lower costs contribute to the overall ROI gains represented by effective GRC activities.
Conclusion: Integration of GRC in a company might be a one-time investment, but maintaining it is a continuous process. A company’s GRC strategy must continuously evolve along with the business in order to mitigate the risks and threats associated with its different line of businesses. Thus, rather than looking at integrated GRC as an exercise mandatory for complying with regulations, it should be looked at as a factor important for the survival and growth of the business.