In today’s era, the economics have become unstable which increases uncertainties in every business. Every organization is considerate about the potential risk environment and so it reevaluates the efficiency of its internal controls that have specifically implemented to handle risks. This particular scenario along with the increase in complexity and regulatory measures, is straining the governance of organizations. As such the goals of every management include an improvement in transparency, a boost in performance and a rise in profits.
In light of the above discussion, the main key to survival is to achieve a balance in Governance, Risk management, Compliance or GRC. Though every GRC approach is complex and varies with every organization, the chances are improved if the principles given below are adopted.
Any GRC approach that is strategic is actually like a journey, which is why all of the challenges cannot be addressed in a single go. You will have to identify the most important issues and determine the existing challenges. Make sure you prioritize everything because it would make it easier to handle things.
In order for the approach to be successful, a cross functional committee must be built whose sole responsibility should be to address GRC related issues. This would ensure that all matters are discussed and handled via a single platform, and that solutions are also formulated in a collaborative manner.
The effectiveness of GRC results from the fact that information is shared across all business lines. However, more important than this is to define each role and responsibility associated with the GRC in clear terms. Moreover, the management must also ensure that no task is being duplicated.
Keep in mind that GRC is a framework that is meant for supporting the risk and compliance system which is already in place. As such, you should not insert additional bureaucracy levels which can lead to the formation of a GRC silo or cottage industry.
Technological tools support the GRC framework, but by no means are they mandatory. As such, before you invest in a costly new technology, make sure that you have appropriately determined the GRC requirements and that your current systems can serve as a foundation and support for your business needs today and in the future.
If every functional role and responsibility is properly understood, it can aid in identifying and removing duplicate roles. This would be beneficial from a cost savings and effective resource allocations point of view, and will also not create any inconsistencies or errors.
If a common methodology and approach for identifying and assessing risks is utilized, a platform can be created which would provide a wider view of all the risks involved and would allow you to analyze information with consistency.