Governance, Risk and Compliance (GRC) is defined as “an integrated, holistic approach to organisation-wide governance, risk and compliance ensuring that an organisation acts ethically correct and in accordance with its risk appetite, internal policies and external regulations through the alignment of strategy, processes, technology and people, thereby improving efficiency and effectiveness” (*)(1).
Alternatively, GRC it can also be defined as a structured method of aligning IT with business goals while managing risk and complying with all government and industry regulations. This methodology includes tools and processes to unify an organization’s governance and risk management with its technology innovation and adoption initiatives.
Companies use GRC to reliably realize organizational goals, eliminate uncertainty and meet compliance requirements.
What does GRC mean?
GRC stands for governance, (risk) management and compliance. Most companies know these terms, but practiced them separately in the past. GRC combines governance, risk management and compliance in a coordinated model. This helps your company reduce waste, increase efficiency, reduce risk of non-compliance and share information more effectively.
The breadth and depth of a GRC program varies with each organization. Regardless of its simplicity or complexity, there are opportunities to transform or scale this program for the adoption of cloud services, emerging technologies, and other future innovations.
The following are the meanings of each of the letters that make up a GRC:
Governance is the set of policies, rules or frameworks that a company uses to achieve its business goals. It defines the responsibilities of key stakeholders, such as the board of directors and senior management. For example, good corporate governance helps staff to include the company’s social responsibility policy in their plans.
Good governance includes:
- Ethics and accountability.
- Transparent information sharing.
- Conflict resolution policies.
- Resource management.
Companies face different types of risks, such as financial, legal, strategic and security risks. Proper risk management helps companies identify these risks and find ways to correct any risks they encounter. Companies use an enterprise risk management program to anticipate potential problems and minimize losses. For example, you can use risk assessment to find security holes in your computer system and apply a remediation.
Compliance is the act of complying with standards, laws and regulations. It applies to legal and regulatory requirements established by industry bodies and internal corporate policies. In GRC, compliance involves the implementation of procedures to ensure that company activities comply with the respective regulations. For example, healthcare organizations must comply with standards such as HIPAA, which protect patient privacy.
Benefits of GRC
- Drives strategic focus and ensure management support.
- Align security and IT investments to business requirements and strategy.
- Align IT and Cybersecurity risk management to enterprise risk management and risk appetite.
- Fosters continuous improvement as a core principle.
- Identifies business risks and compliance obligations.
- Provides validated data to drive informed decisions.
- Prioritise security areas by business risks.
- Lower costs by reducing the probability of and damage caused by incidents.
- Present the facts when it comes to the confidentiality, integrity and availability of information assets.
- Provides customers and stakeholders with confidence in how you manage risk.
- Protect the company, assets and stakeholder value.
(1) Concept by Nicolas Racz, Edgar Weippl and Andreas Seufert in their recent research paper “Frame of Reference for Research of Integrated Governance, Risk & Compliance (GRC)”.
More details on GRC
For more details, explore the great article What is Governance, Risk and Compliance (GRC), published on the AWS page.