Mastering Governance, Risk Management and Compliance (GRC)
Master governance, risk management and compliance by understanding the fundamentals and the tools that can facilitate a structured, unified approach. r
Lead with certainty with an integrated Governance, Risk and Compliance framework, stepped out seamlessly in Drova’s GRC software.
What is GRC?
Governance, risk management and compliance (GRC) is an integrated approach that businesses use to align their policies and practices with business goals, identify and manage risks and ensure that the organisation remains compliant with relevant regulations.
GRC is a structured framework, often supported by technology. The GRC framework unifies corporate governance structures, risk management processes and compliance controls to help organisations operate efficiently, make informed decisions and achieve strategic objectives, while mitigating threats.
GRC is the strategy and structure that keeps an organisation secure and on track to achieve its targets. In the words of the Open Compliance and Ethics Group (OECG), governance, risk, and compliance is a collection of capabilities that enables an organisation to achieve “principled performance”: the ability to reliably achieve objectives, address uncertainty and act with integrity.
GRC is a relatively modern concept, with the first peer-reviewed academic paper on the topic published in 2007 in the International Journal of Disclosure and Governance.
What problem does GRC (governance, risk and compliance) solve?
While organisations have always been governed and risk and compliance managed, GRC provides a mature approach to these activities, tying them together to drive strategic business outcomes.
The goal of governance, risk and compliance is not to add burden to organisational management, but rather to support, improve and centralise related information. GRC becomes a critical part of business operations, rather than reporting that’s tacked on afterwards.
What drives cohesive GRC implementation in businesses?
Large companies, small businesses, non-profit organisations and government bodies all face issues that make robust governance, risk and compliance frameworks valuable.
If your organisation is faced with drivers like these, GRC can help to bring certainty in a rapidly evolving business landscape:
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Rapidly evolving regulations and enforcement strategies
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Increasing costs to address risks and requirements
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Exponential growth of third-party relationships
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Stakeholders demand high performance alongside increased transparency
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Significant impact on business survival and continuity if threats and opportunities are not identified.
The goal of GRC is to help remove silos from departments and programs to enable synergy, prevent counter-productive decisions and ensure that activities all drive business performance, holistically.
Governance, risk and compliance management
01
Governance
Corporate governance ensures that all of an organisation's activities align and support the organisation’s goals.
Governance begins at the level of the key decision-makers, including the board of directors and high-level executives, and filters down to every employee and operational process through policies and procedures, work instructions and other company-level guidance.
Governance documents define:
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Board composition
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Corporate disclosure
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Executive compensation
Effective governance will ensure that an organisation gathers data, makes strategic decisions and communicates with stakeholders, including investors, in a way that aligns with the corporate values and responsibilities.
A governance strategy applies data, information and evidence from audits, assurance reports, compliance monitoring and risk assessments to keep the organisation on track towards its defined objectives.
02
Risk
Risk management involves identifying potential risks and threats, from financial or legal risk to cybersecurity threats, commercial liabilities and contractual liability, management error, natural disasters or other incidents.
Using a double materiality assessment can help to identify sustainability risks that exist internally or externally. Internal audits and risk assessments can also identify gaps and areas of uncertainty.
Risk is often the remit of department heads, including IT security, finance officers and the governance board. Including risk within the GRC framework enables risk management activities to align with the organisations overarching strategy and goals.
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Compliance management
Organisational activities must align with the laws and regulations in the regions in which the company operates. Compliance management covers both mandatory compliance requirements, like operational resilience legislation for financial services, including PS21/3 in the UK and APRA’s CPS230 in Australia, and any voluntarily established company policies, for example, relating to diversity and inclusion or sustainability.
Non-profit organisations and government bodies can also face stringent compliance requirements, such as the NDIS regulations in Australia that govern provision of disability support services.
When organisations implement GRC centrally, compliance monitoring becomes end-to-end, ensuring no stone is left unturned for a regulatory officer to uncover. This puts the business in the best possible position to avoid fines, disruption to services and reputational damage. Centralising compliance management enables the activities to be used to promote business objectives, not just prevent regulatory reprimands.
What is the best way to achieve GRC maturity?
The first step towards GRC maturity and all of the benefits that it brings to an organisation is to centralise the three elements, governance, risk and compliance. A digital GRC tool that holds and connects key documents, registers, event and incident reporting and everything that GRC entails can be the first step to realising the benefits of a unified governance, risk and compliance management framework.
Benefits of implementing GRC
An effective GRC strategy will help your company’s internal workings feel more organised, cohesive and efficient. Other benefits include:
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Improved decision making: Leaders have a unified, central view of risks and compliance requirements an organisation may face
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Operational efficiency: Integrating all risk processes into a single platform eliminates redundancies, streamlines workflows and reduces administrative overhead.
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Agility and resilience: As GRC maturity progresses, organisations are increasingly able to respond and adapt to change and disruption, establishing true operational resilience.
Enhanced risk management: A central, structured GRC framework enables boards and leaders to identify risk early. When threats and vulnerabilities are seen early, costs associated with risk exposure drop.
Who is responsible for GRC in an organisation?
A GRC team can be a group of dedicated employees, or a group of stakeholders from across departments. The GRC team typically includes:
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Chief Risk Officer (CRO): ensures the risk approach aligns with organisational goals, sets the vision and selects the framework
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Chief Compliance Officer (CCO): focuses on compliance, regulatory changes and internal policies.
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Internal auditors: Evaluates effectiveness of internal controls, risk management practices and compliance procedures
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GRC analyst/specialist: Supports data collection, risk assessments and reporting, often managing the GRC software platform.
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Legal counsel: Advises on legal risks, regulatory requirement and compliance consequences.
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IT security officer: Focuses on cybersecurity risks, executes data protection policies to meet compliance standards. Supports the whole organisation to adhere to cybersecurity principles.
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Business unit leaders: align department-level practices with enterprise risk and compliance objectives and strategic targets.
What are the steps to implement GRC?
Most organisations already have governance, risk and compliance measures in place. Implementing GRC means centralising these into a single, interconnected framework. Here’s where to begin:
1. Identify and assess current GRC practices and define business objectives
Use this step to find and bring together all of your governance, risk and compliance initiatives and activities. Identify any gaps and define clear goals for implementation that align with the broader business strategy.
2. Select a framework
The right framework will depend on your industry, organisational size and complexity. Whether you adopt an ISO framework like ISO 3100 or ISO 27001, the OECG GRC capability model or another framework that suits your organisation, tailoring a model to suit your precise business requirements is key.
3. Develop policies, procedures and controls
Collate, review, update or establish policies and procedures that align with your GRC framework. These policies can be used to design the internal controls which help to mitigate identified risks and ensure compliance.
4. Implement suitable tools and software
Centralising documentation, automating reporting, compliance tracking, risk assessments and incident management streamlines GRC, taking the burden away from individuals.
5. Communicate and train stakeholders
When employees and stakeholders understand their role and the importance of the GRC framework in organisational health, the company culture grows to support effective risk management and awareness.
6. Evaluate and iterate
Your organisation’s GRC framework is a living system that continues to evolve with growth and other changes to the business. Regular audits, assessments and monitoring enable the policies, controls and processes to be refined so they are continuously effective.
Ready to begin? Drova's GRC software enables organisations to streamline, centralise and manage governance, risk and compliance, seamlessly.
Our integrated GRC technology provides effective oversight of your company, integrated reporting and analytics, integrity and ethical requirements, integrated information, risk and control activities, and standardised practices for internal processes like hiring, training and investments.
It’s designed with regulatory frameworks and diverse industries in mind. Tested and proven for financial services globally, healthcare, technology, large organisations and small businesses, Drova’s GRC platform can scale to meet changing requirements.
GRC FAQ
What are the four modules of GRC?
Risk management, compliance management, policy management and audit management are the four modules of GRC which form the foundation of an effective governance strategy. These modules enable businesses to optimise processes, remain compliant and minimise risks.
What are the daily tasks of GRC?
Daily tasks of GRC often include risk assessments, maintaining documentation, conducting audits, analysing for security gaps and reporting. GRC analysts collaborate with IT teams, legal counsel and business unit leaders to remediate vulnerabilities and strengthen compliance programs.