Governance, Risk Management, and Compliance (GRC)
Governance, risk management, and compliance (GRC) is a term that describes the way in which a company manages the parts of its business. This management system is based on 3 significant factors. Any business can be considered in terms of these points.
The reason why GRC was introduced is that representatives of different departments of a company showed unwillingness to share information and cooperate with each other. It is known that this kind of a mindset leads to the worker’s decline in productivity, demotivates them and undermines the performance of the company.
Governance, risk management, and compliance have been essential components of company management for over 15 years. The term “GRC” arose in about 2007.
The GRC system allows companies to make the business processes more efficient, reduce the severity of possible losses and expenses for maintaining business processes.
GRC includes 3 main components:
- Governance (corporate governance) is characterized by the management approach, it defines objectives, coordinates and controls actions taken to maintain the operations of a business;
- Risk (enterprise risk management) is the process of determining the reasons why the teams miss deadlines, why they fail to achieve objectives; it assesses business risks and manages them;
- Compliance (corporate compliance) refers to processes that a company is involved in to make sure that the business activity complies with regulations—the laws, rules, and other regulations—both at the planning phase and at the implementation phase.
There are quite a lot of organizations in the market now that provide business owners with consulting services to use the GRC concept. Many GRC software tools are presented as well. The most popular and common are the IBM OpenPage GRC Platform and others.
Pros of GRC
The business owners that implemented GRC claim that the traditional approach to management is more expensive as more restrictions and government regulations are being introduced. The relatively new system gives an opportunity to integrate significant functions into the business activity. They may be connected with finances, IT, etc.
The implementation of GRC is considered to be a highly labor-intensive process. However, the use of GRC is not just an indicator of business maturity, but also an effective tool that allows companies to operate efficiently.