What is GRC (Governance, Risk & Compliance?)
GRC is a discipline that brings together focus areas across corporate governance, enterprise risk management and corporate compliance. The aim of an effective GRC strategy is to ensure that right efficiencies are brought in and more effective information sharing and reporting mechanisms are enabled. Going in-depth into the key components of GRC we have the following:
- Governance addresses an overall management approach through which key executives monitor, manage and direct the entire organization. This involves a combination of hierarchical management information and management control structures that are implemented across multiple lines of business.
- Risk management refers to a set of frameworks and methodologies through which an organization identifies, analyzes and reacts appropriately to risks that might adversely affect its vision and objectives. It also helps in proactive identification and mitigation of risks that the organization faces on an everyday basis.
- Compliance involves adhering to approved and conformed set of processes and requirements. This is achieved by identifying requirements – regulatory, contractual, strategic and policy related, assessing the existing state of compliance, identifying the risks and potential costs of non-compliance against the projected expenses to achieve compliance, and prioritizing, funding and initiating any corrective actions if required.
To achieve maximum benefits, governance, risk management and compliance activities need to go hand in hand for effective operations.