A guide to managing risk and compliance
What is GRC?
Governance, Risk and Compliance (GRC) can be defined as the capability of the business to manage uncertainty whilst acting with integrity. To operate efficiently and to facilitate effective information sharing and reporting facilities, GRC needs to be coordinated across the business.
What is involved in GRC?
GRC involves a raft of activities across the business, but can be simplified into three separate processes:
This is a management approach taken in order to control and protect the organisation. It ensures that information supplied to the executive team is accurate and supplied in a timely manner with control measure in place so that any management decisions are implemented effectively.
This is the identification, analysis and appropriate response to risks in order to mitigate any negative impact they may have. The risks might be technological, commercial, financial, data or security.
All businesses need to conform to legal and industry standards. Putting processes in place to identify legal requirements and assess the extent of business compliance will enable the business to prioritise any necessary corrective actions.
Key factors to be assessed in GRC are financial, IT and legal and enterprise. If the approach to GRC is uncoordinated it will result in contradictory results and prevent the business from providing real-time GRC executive reports. These are increasingly critical due to changes in technology, market globalisation, increased data storage requirements and more stringent regulations.
Assessing product vendors can be challenging due to their dynamic nature. It can be difficult to maintain accurate data and so it is advisable to consider enterprise wide governance, risk and compliance considered separately for vendors.
If vendors are on an integrated data framework it may be possible to develop custom built GRC data warehouse and business intelligence solutions to facilitate the analysis of data from a vast number of existing GRC applications. This is beneficial as it can provide the early identification of risk.
Hiring a GRC professional
Given the complexity of GRC, hiring a dedicated GRC professional may prove to be a cost effective solution. They can be invaluable in supporting the management team to steer the business, as can be seen below:
Risk and compliance professional
These are experienced in data security, consumer privacy and financial transparency.
Financial risk and compliance professional
These are specialists involved in implementing systems and auditing internal controls to reduce risks, identify financial vulnerabilities, streamline processes and maximise business development opportunities.
Audit risk and compliance professional
These are dedicated to ensuring compliance with regulatory requirements. They will assess data accuracy, documentation quality, managerial responsiveness and system effectiveness in order to integrate financial, legal, operation and technology risks.
Operational risk and compliance professional
Experts in identifying, assessing and mitigating operational risks and facilitating risk management activities by setting and monitoring operational risk metrics to report and review key performance indicators.
Legal risk and compliance professional
These professionals will ensure compliance with global financial laws and monitor security and financial vulnerabilities on a worldwide basis.