Governance risk and compliance is the integration of capabilities which makes an organization capable of achieving objectives reliably, addressing uncertainties and act with integrity. This includes the work done by various departments such as compliance, internal audit, compliance, legal, finance, risk, HR, IT etc.
What you didn’t know about governance and compliance risk
It is important to keep in mind that businesses have been managing risk and compliance from a long time- considering that compliance methods have always existed. However, keeping in mind the new challenges firms face due to rise in technology, the role of governance and compliance has changed exponentially. Additionally, most organizations did not approach the compliance activities in an effective manner, thereby leaving room for penalties and fines. Nor were their efforts aligned with the broader objectives of the organizations. Therefore, the picture of compliance was very grim until the advent of technological reforms and awareness among organizations.
Importance of GRC
In a progressive organization, governance and compliance risk is not seen as an optional endeavor but as a mandatory activity. It is viewed as an integrated collection of all the efforts necessary to support compliance in an organization. Government and compliance risk work as a fuel to the organization, which not only supports its performance but also improves it.
Challenges in front of GRC
Organizations need to address the challenging business climate. Some of the biggest challenges that organizations face when it comes to governance and risk compliance are stakeholders demanding high levels of transparency, regulations and enforcement keep changing and is often quite unpredictable, the costs of addressing risks can be out of control, the impact on the organization when the threats go unidentified.
Benefits of GRC
When governance and compliance is done right, it offers a plethora of benefits to the organizations such as reduction in costs, reduction in duplication of activities, greater ability to gather information quickly, greater ability to implement processes in an effective manner, tackling threats at the right time etc. A good governance and compliance risk plan is the one that ensures that right actions are put in place to address uncertainty and threats.
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