The phrase “governance, risk, and compliance” (GRC) was first introduced in the early 2000s by the Open Compliance and Ethics Group (OCEG). Since then, the concept has fundamentally changed how businesses operate.

Although GRC is not a revolutionary idea by any means, it is integral to assuring that organizations can achieve, and maintain, optimal business continuity.

GRC is a defined set of policies and procedures used by businesses to achieve their objectives, address uncertainties, and act with integrity. This is also known as achieving “principled performance.”

What Is the Purpose of GRC?

The fundamental purpose of GRC is to assure that an organization takes an integrated, strategic approach towards managing its corporate governance, enterprise risk management, and regulatory compliance requirements. As a result, GRC helps organizations improve risk management by enabling effective decision-making and enhancing performance.

How are governance, risk, and compliance each different?

Governance refers to the processes and policies set in place to assure that the overall business goals and objectives are supported by any corporate activities.

Risk refers to the identification and assessment of any potential business risks facing the organization, including financial, legal, and security risks.

Compliance refers to the adherence to any applicable regulatory guidelines or frameworks that the organization must comply with for the business to operate within its industry.

Why Is GRC important?

GRC is critical because it allows organizations to take a holistic approach to achieving its overall strategic business objectives, rather than operating all the processes and procedures in silos, which can be time-consuming.

As a result, organizations will experience three main benefits:

  • Increased efficiency, by using GRC software to decrease the amount of time spent on risk assessment, compliance management, internal audits, and other activities. GRC software also provides real-time reporting dashboards and automation capabilities so the in-house GRC professionals can focus on high-value tasks.
  • Assess and reduce risk, by making informed decisions and setting a plan to remediate the risks.
  • Strengthen ROI by leveraging GRC software to move toward a clear direction and using the platform to measure the overall performance.

Additionally, implementing GRC allows organizations to reduce costs and a duplication of efforts and to get more value from the overall information technology (IT) investments.

What Is the GRC Framework?

The governance, risk, and compliance framework is also known as the GRC Capability Model 3.0 (Red Book). According to the OCEG, its purpose is to help organizations “plan, assess, and improve their GRC capabilities to achieve principled performance.”

The capability model also allows for impactful conversations with key internal stakeholders regarding the current GRC capabilities.

What are the four components of the GRC framework?

According to the OCEG, the four components of the GRC Capability Model are learn, align, perform, and review:

  • Learn about the organizational context, culture, and key stakeholders to inform objectives, strategy, and actions.
  • Align strategy with key business objectives by using effective decision-making that addresses values, opportunities, threats and requirements.
  • Perform actions that reward desirable outcomes, prevent and remediate undesirable outcomes, and detect when something happens as soon as possible.
  • Review the design and operating effectiveness of the strategy and actions, as well as the ongoing appropriateness of objectives, to improve the organization.

What Is GRC in Cybersecurity?

From a cybersecurity perspective, GRC encompasses how organizations develop their cybersecurity program to reduce and manage cyber risk. Often this occurs by assuring that the organization’s key stakeholders are aligned with the specific cybersecurity policies and processes that must be implemented to reduce the risk of data breaches and other cyber threats to data privacy.

In addition, GRC in cybersecurity also assures that the organization adheres to any specific cybersecurity compliance frameworks (for example, healthcare organizations complying with the Health Insurance Portability and Accountability Act or achieving General Data Protection Regulation compliance).

What are the possible consequences of not following GRC?

There are several possible consequences of not following a GRC program, such as:

  • Facing monetary penalties if an organization violates a mandatory regulatory compliance program.
  • Heightened risk of cyber attacks if potential vulnerabilities are not found and mitigated.
  • Lack of visibility into potential risks (especially third-party risks) that can harm the ability to respond and remediate the risks effectively.
  • Financial costs associated with ineffective risk and compliance management.

Prevent Cybersecurity Attacks With ZenGRC

ZenGRC is an all-in-one platform that allows businesses to assess operational risk across various threats and vulnerabilities; detect, monitor, and remediate any risks found with real-time updates; and continuously monitor regulatory compliance of third-party vendors.

In addition, ZenGRC allows businesses to conduct self-audits across a wide array of industry frameworks, such as NIST and HIPAA, and keeps track of any potential compliance issues.

Schedule a demo to learn how ZenGRC can help your organization minimize the impact of cyber attacks and improve overall business processes.

The Experts Guide to Evaluating GRC Tools