Governance, risk and compliance (GRC) aims to address an organization's strategy for integrating these three components in an effective way. GRC aligns corporate governance, enterprise risk management (ERM), and compliance activities to help organizations achieve their goals. Any organization, from small-to-medium business (SMB) to large enterprises can implement GRC.
A GRC strategy provides organizations with a set of practices across the three fields:
In this article, you will learn:
A well-designed and structured GRC strategy enables organizations to effectively manage risk and meet compliance requirements, while aligning IT with business objectives. This has many benefits, such as simplifying the decision-making process, maximizing IT investments, and reducing the gap between IT departments, experts and stakeholders.
Many organizations start from an existing GRC framework, rather than building their GRC implementation from scratch. A GRC framework provides basic elements that organizations can configure and adapt to their specific circumstances. This makes it possible to organize and manage IT initiatives while ensuring compliance, managing risk, and supporting the organization's short- and long-term goals.
GRC is most effective when implemented across an entire organization. In some types of companies, there is a need for an umbrella entity that facilitates coordination on GRC topics across the organization, but this is not always needed.
The OCEG, a non-profit organization that invented the GRC concept, provides a GRC Capability Model (known as the Red Book) that integrates management considerations, risk, auditing practices, compliance, ethics and culture, and information technology, using an integrated approach.
The model uses four components:
These components describe an iterative process of continuous improvement. Each part of the model is broken down into elements, each of which provides a series of practices, activities, and controls, which may be either (a) proactive, (b) detective, or (c) responsive.
If your organization already has solid policies and procedures, investing in a GRC solution can significantly improve performance, decision making, and risk awareness. It can help execute the GRC model in a standardized way across the organization.
GRC software can help an organization implement a GRC program by:
With the increasing number of regulations, particularly for financial services companies, GRC tools have become essential for creating and processing reports required by government agencies. Most products provide a dashboard that allows you to quickly see which parts of your organization follow certain standards or rules.
Many risk and IT managers use simple spreadsheets to perform GRC analyses, such as tracking risk and compliance with security policies. However, this is not sufficiently scalable or reliable.
A better way is to use an automated GRC assessment tool that collects information from existing IT security tools (firewall configuration logs, vulnerability scans, customer databases, and so on). Compliance auditors or consultants can use these tools to identify gaps, and address them to improve compliance and reduce risk.
Before evaluating GRC automation tools, answer a few questions to help you understand their capabilities and how they align with organizational needs.
How are existing security systems integrated with the GRC tool?
Some tools have connectors that allow you to download scans and reports directly from security tools, while others might require you to import the data using XML, CSV files, or SQL queries.
Is there a common framework to identify threats across departments?
If multiple departments are conducting competitive, compliance or security risk assessments, there may be common causes or issues that can help multiple departments address a risk. This can save time and improve the effectiveness of the GRC process. Check if the GRC tool provides a common framework for identifying and addressing risks across the enterprise.
How flexible is the reporting functionality?
Each company requires specific reports, both for internal use and for submission to external auditors. Check what are the built-in reporting tools and how deeply you can customize them to generate reports you can submit to stakeholders and auditors.
How many ready-made templates are provided?
Some GRC products use forms and requirements from common standards and regulations, and build them into the product as a template. Check if templates are available for the specific compliance standards your organization is subject to.
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