What Is GRC? Understanding Governance, Risk, and Compliance

Why should companies take my article seriously? An important driver of GRC is corporate governance. Investors are increasingly interested in how companies are managed and what kind of risks they are exposed to.

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Moreover, employees, customers, and other stakeholders expect organizations to be transparent about their organization and have robust mechanisms to prevent misconduct.

Taking integrity seriously, how to implement GRC in your organization?

Governance, risk, and compliance, often called GRC, is a blanket term that describes the strategies and technologies used to manage an organization's compliance with regulatory mandates and corporate governance standards.

To better understand GRC, it's best to look into each individual component:

Governance

The framework of rules, processes, and practices by which an organization is directed and managed. In essence, this comprises how an organization attempts to meet its goals and business objectives.

Risk or risk management

The potential for loss or damage to an organiza-tion's reputation, finances, employees, customers, or other stakeholders. In particular, the main focus of risk in GRC is risk management, i.e. identifying and subsequently minimizing risks encountered by the organization.

Compliance

The state of conforming to laws, regulations, and standards required by relevant bodies or government agencies. This can vary depending on the industry or sector and ensures that organizations meet a minimum standard of operations.