Implementing an effective governance, risk, and compliance (GRC) program has become indispensable for streamlining business operations, automating workflows, and guiding data-driven decision-making across modern enterprises.
By taking a holistic approach to integrating the oversight of these interconnected domains with cloud-based GRC tools and real-time dashboards, companies can build more resilient, ethical, and continuously compliant businesses.
Launching a new GRC initiative from scratch can be daunting without properly engaging key internal audit stakeholders or assessing risk management vulnerabilities. In this blog post, we’ll explore the fundamentals of enterprise GRC solutions to help pave the way for developing an automated, holistic GRC platform that breaks down silos to advance corporate governance, risk management, and compliance goals.
What is GRC?
GRC encompasses three interconnected domains that enable organizations to take a structured approach to managing enterprise risks while optimizing and automating governance, risk management, and compliance processes:
Refers to the policies, processes, and cross-functional oversight activities focused on advancing overall business goals, corporate responsibility, accountability, transparency, and data privacy through an effective GRC system. This includes GRC software tools for visualizing performance metrics, monitoring risk exposures, and streamlining audit management workflows.
It involves identifying, assessing, and mitigating vulnerabilities through predictive risk management programs like third-party risk management, cyber risk management, and business continuity management. Quantitative risk assessment enables data-driven decision-making and prioritized risk mitigation based on potential impacts.
Requires processes for adhering to various internal policies and external regulatory compliance requirements relevant to an organization’s industry, locations, and stakeholders. GRC software centralizes compliance data for transparency while automating policy attestations to reduce duplication across siloed teams.
Why is GRC Important?
Implementing a robust GRC strategy delivers immense value by enabling data-driven decision-making within a unified risk management framework, ensuring responsible and ethical operations, and strengthening cybersecurity defenses.
Data-Driven Decision Making
By centralizing governance, risk, and compliance data flows into integrated dashboards and leveraging GRC software tools for continuous process automation, organizations gain holistic visibility to make quicker, insight-led decisions aligned to overarching business goals and risk appetite.
A mature GRC program facilitates cultivating an ethical organizational culture anchored by formal policy management, transparency, personal accountability, and collective responsibility for risk-aware decision-making across operations. This builds trust amongst all stakeholders.
Integrating governance, risk management, and compliance is crucial for implementing robust cybersecurity defenses and complying with evolving data privacy regulations. A GRC IT strategy systematizes information security policies, controls testing, third-party risk monitoring, incident response protocols, and compliance attestations to safeguard sensitive data, protect user privacy, uphold uptime, and avoid regulatory fines.
Use Cases for GRC
While foundational governance, risk management, and compliance components may be consistent across programs, GRC approaches can be tailored to address industry-specific and organization-specific needs.
A core benefit of GRC software solutions is enhanced efficiency by connecting previously disjointed data, processes, and responsibilities into a single source of truth. Integrated risk assessments, control testing, compliance management, vendor due diligence, audit preparations, and reporting workflows save time and money organization-wide.
Informing Risk-Based Decisions
Centralized data within GRC platforms empowers leadership to make more informed decisions around resource allocation, investment strategies, new market expansion, and more based on holistic visibility into performance benchmarks, risk exposures, and compliance obligations.
For companies recovering from impactful risk events, compliance violations, or reputational damages, implementing robust GRC practices facilitates issue remediation, control improvements, and ongoing monitoring to rebuild stakeholder trust and avoid repeat issues.
Unified analytics, custom GRC metrics setting, and process automation enable objective tracking toward good governance, risk management, and compliance goals. This supports operational performance tied to critical strategic Key Performance Indicators (KPIs).
The use cases highlight efficiency optimization, data-enabled decision-making, resilience reinforcement, and performance enablement as key GRC solution benefits that ultimately improve ROI across the organization.
What are The Challenges of GRC Implementation?
Launching a successful GRC program presents a variety of obstacles:
- Lack of executive buy-in and budget allocation
- Siloed teams and information gaps
- Unclear ownership for risk and compliance tasks
- Immature risk identification and assessment capabilities
- Difficulty quantifying risk impacts
- Inefficient, manual reporting processes
How to Implement an Effective GRC Strategy
Follow these best practices for GRC implementation:
- Secure leadership endorsement and commitment to the initiative. Outline how it aligns with strategic goals.
- Define policies, procedures, controls, and responsibilities across interdisciplinary teams. Break down siloes through collaboration.
- Continuously identify, evaluate, and document risks through top-down and bottom-up business engagement.
- Assess the likelihood and potential impact associated with each risk to guide prioritization.
- Develop response plans, controls, and mitigation tactics for priority risks.
- Track and report on all GRC components to measure program effectiveness and identify potential gaps.
Compliance frameworks for GRC
When building a GRC program, you must select a core compliance framework. A compliance framework, also known as a compliance program, is a structured set of guidelines and best practices that details a company’s processes for meeting regulatory requirements. In addition to meeting regulatory compliance requirements, an organization uses its compliance frameworks to enhance security, improve business processes, and realize other business objectives, such as selling cloud products and services to government agencies.
As there are a number of compliance frameworks that a company’s information security team can adopt to meet regulatory requirements, we’ve pulled together some common frameworks you will want to be familiar with before setting up your GRC program.
TIP: Never take an ad-hoc approach to building a GRC program, as it can create unnecessary, additional work when you do move into a required framework.
Many of these frameworks have been developed over time and include built-in risk assessment capabilities, which means they will provide a solid foundation for building a GRC program and maturing it over time:
- System and Organization Controls (SOC): If your business provides services to other companies — data storage or payroll management — you must assure your customers that your organization won’t expose them to undue security or compliance risks. The two most common ways to provide that assurance are to pass a SOC 1 or SOC 2 audit, which provides a framework (and testing processes) for financial controls. These frameworks have become ‘table stakes’ for any service organization, and potential customers will expect your compliance.
- Payment Card Industry (PCI): The cybersecurity compliance standard protects debit and credit cardholder data from unauthorized access via data breaches, ransomware, and other security breaches. The standard encompasses all IT and operational controls organizations must implement to protect credit card data and includes multiple frameworks. The PCI DSS (Data Security Standard) is a core framework required if you process, transmit, or store credit card data.
- Health Insurance Portability and Accountability Act (HIPAA): this framework mandates cybersecurity standards for businesses in healthcare-related industries that handle information related to protected health information (PHI). So, if you’re in the healthcare industry, you must comply with HIPAA.
- FedRAMP & CMMC: These frameworks apply to organizations that conduct business with the US Federal Government. FedRAMP dictates a standardized approach for security assessment, authorization, and continuous monitoring of cloud products and services that Cloud Service Providers (CSPs) offer. So, if your business has a specific product or environment in which you are processing federal data, you’ll need certification to obtain an Authorization To Operate (ATO). CMMC requires a similar certification for companies doing business with the US Department of Defense.
- General Data Protection Regulation (GDPR) & California Consumer Privacy Act (CCPA): Over the last several years, there has been a growing demand for greater oversight on how companies collect, use, share, and delete customer data. GDPR requires that if your business collects the personal data of European Union (EU) citizens – regardless of where your business is located – you have controls in place to protect your customers. CCPA is very similar. However, it is state-specific and focused on anyone processing data of California residents.
- Sarbanes-Oxley (SOX) & Control Objectives for Information and Related Technology (COBIT): SOX was created to provide greater accuracy and transparency of corporate disclosures in financial statements and to safeguard investors from fraudulent accounting practices through effective risk management. It is a requirement for any publicly traded organization within the US. While it’s focused on financial reporting, a component is related to cybersecurity programs and how those IT processing activities feed into your financial reporting. COBIT is a governance framework often used in conjunction with SOX as it helps you establish an IT governance program that will aid you in complying with the SOX framework.
These are just a few of the most common frameworks to consider when building your GRC program. If you’d like to see a more comprehensive list of compliance frameworks – and when it’s appropriate to use them – we’ve created this Compliance Framework Content Registry.
Why ZenGRC is the right GRC tool for you
ZenGRC centralizes and connects governance, risk, and compliance data to provide unparalleled visibility through integrated dashboards. Risk intelligence informs strategic decisions, while automated assessments and controls drive operational efficiency. To learn more, request a demo today.