GRC means Governance, Risk management, and Compliance. Contrary to popular belief, the last concept doesn’t refer to Control. Here’s what each term means.
Governance makes sure that all departments within your organization are aligned in a way that supports your business objectives. It is holding actions accountable for all employees and following the set guidelines.
Risk management refers to any potential risks that are addressed and presented in a way that supports your organization’s objectives. When you identify risks, you can strive to avoid them or only work in low risk situations.
Compliance is ensuring that every one of the employees is operating in a way that follows both your internal governance procedures, as well as government laws and regulations.
Does your organization have a GRC solution? There are many different ways to implement or improve on your GRC policies. Here are some ways that GRC software can help your business become successful by assisting in making this process easier.
Governance
This first concept involves employs the use of rules and regulations. Governments need to get involved to manage the trade of goods, protect citizens, and maintain public safety. It helps businesses make the right decisions that fit in the best interest of their employees and customers.
These types of teams usually have leaders at the top of the chain with entry-level employees at the bottom. Every person in the chain has a list of duties they must perform. A GRC team makes sure that everyone on their team is following the rules and regulations of the company.
Risk Management
Risk management involves identifying and assessing threats to your organization’s capital and earnings. These threats or risks could stem from accidents or natural disasters, financial uncertainty, or management errors. When most people start a business, they don’t understand the consequences behind these risks, so they increase their chances of failure.
A risk manager can help you create an online of common problems that could happen to your business. One example is increasing budgeting in your accounting department, which could decrease funding to your marketing teams. It’s important for your organization to be aware of these risks so that you can reduce the chances of them happening.
Compliance
This third concept means to comply with rules and regulations. Organizations have to follow a set list of limitations that are set by the government. Every company and organization that serves the public are required to follow laws specific to their business. They may have to obtain a license to operate in a certain area. Businesses must take continuing education classes for their license to stay valid.
Legal Consequences
Without the right GRC software, your organization’s hierarchy could fall apart. Employees are more liable to break rules and company policies. If these rules and regulations aren’t followed, then employees will make risky decisions that will hurt your business overall.
If your company isn’t compliant, then you could face criminal charges, fines, and lawsuits. This could cause you to lose your license to operate. It’s imperative for every business to follow the law as well as their own company policies. Some employ GRC teams within their organization while others hire a third-party from another agency.
More Operational Complexity
Complexity increases every time an organization has to comply with rules and regulations. It can also decrease the nature of your enterprise resource planning system. Enterprise resource planning (ERP) software integrates the business process across all of your departments – human resources, finance, marketing, etc.
Some organizations have difficult processes and operations. They may have to include additional departments such as manufacturing or mining. Depending on the organization, they may even have to outsource their departments. The higher the complexity, the more obstacles your organization could face when it comes to meeting goals.
GRC are three concepts that keep your organization thriving and staying out of trouble. Each of these concepts is related to the other, and your organization needs to follow all three to maintain its success. A winning GRC software can help you make important decisions and investments across all parts of your organization.
