Definition of GRC
Most people in the corporate world have heard about GRC before. But the number of people that actually know what the acronym stands for is probably a lot smaller, even though GRC is so important in ensuring any organization’s success.
GRC stands for Governance, Risk, and Compliance and was first introduced by OCEG® in 2002. It is defined as the integrated collection of capabilities that enable an organization to reliably achieve objectives, address uncertainty, and act with integrity—what OCEG® calls Principled Performance®.
Why GRC?
For anybody not familiar with GRC, it may seem a little unnecessary to create such a broad field just to “reliably achieve objectives” – after all, as long as every one does their job, all should work out. Right?
Unfortunately, things are not that easy. More than 50 Billion Dollars is lost in the United States alone every year due to corporate misconduct. Combined with the damages caused by miscalculations and mistakes at every step of production, the world wide damages have crossed the threshold of 1 Trillion Dollar – every year. So there is more than enough reason to focus on the field that is designed to get rid of the causes of these damages.
So how does GRC help with these problems? It helps organizations to navigate the opportunities and challenges they face when working toward achieving its specific goals —things that could either help or hinder its progress. The goals vary from organization to organization, and therefore the measures used to ensure their success also vary deeply. But the core concept always stay the same: To achieve its set goals, an organization needs a clear plan or business model that not only aims to reach its goals but also ensures it meets its legal obligations and follows any necessary rules or guidelines.
Let's take a closer look at the means through which GRC can help organisations in fulfilling their purpose.
Achieving Objectives
Every organization sets out specific goals or objectives that align with its mission and vision. GRC helps ensure these objectives are met reliably and consistently by integrating various capabilities across the organization. This involves aligning strategies, resources, and operations to maximize performance while minimizing risks and ensuring compliance with applicable laws and regulations.
Addressing Uncertainty
Uncertainty is an inherent part of any business environment. It includes risks that could negatively impact the achievement of objectives as well as opportunities that could propel the organization forward. GRC provides a framework for identifying, assessing, and managing these uncertainties to balance risk and reward. By addressing uncertainty proactively, organizations can make informed decisions and remain resilient in the face of challenges.
Acting with Integrity
Integrity involves adhering to ethical standards and legal obligations. In the context of GRC, acting with integrity means that the organization conducts its operations in a way that is not only legally compliant but also ethically sound. This includes fostering a culture of transparency, accountability, and ethical behavior at all levels of the organization.
Governance, Risk and Compliance - the pillars of GRC
GRC stands for Governance, Risk, and Compliance, but it encompasses much more than just these three components. The concept of GRC was developed to represent the essential functions that must collaborate to ensure an organization operates effectively and ethically.
GRC as a whole is about creating a cohesive system where governance, risk management, and compliance are not isolated activities but interconnected elements that work together to support the overall success of the organization. This integration spans across various departments, such as:
Governance
Strategy
Risk
Compliance
Security
Audit
Finance
Legal
IT
Human Resources
GRC involves everyone from frontline employees to the executive suite and board of directors.
So, the true value of GRC lies in its ability to unify these different functions into a single, strategic framework. This framework ensures that all parts of the organization are aligned with its goals, that risks are managed proactively, and that compliance with laws and regulations is consistently maintained. By doing so, GRC helps organizations achieve what is known as “Principled Performance®”—the ability to achieve their objectives reliably while acting with integrity and managing uncertainties.
In essence, GRC is more than just a set of practices; it is a comprehensive approach that ensures all parts of an organization work together harmoniously to achieve sustainable success.
Why pursue a career in GRC?
A career in GRC offers a unique opportunity to contribute to the stability and success of an organization. GRC professionals, play a crucial role in safeguarding the organization’s reputation and ensuring that it meets its objectives while navigating risks and maintaining compliance. The interdisciplinary nature of GRC, which spans across governance, risk management, and compliance, makes it a dynamic and rewarding field. And since there is an ever increasing number of potential threats to an organizations success, the field has a growing demand for skilled professionals.
By pursuing a career in GRC, you can be at the forefront of helping organizations achieve their goals in a principled and sustainable manner, making a meaningful impact in your organisation and the lives of others.
