What is Governance Risk and Compliance (GRC)?

Navigating today’s business world to meet business objectives, maintain performance, and improve resiliency is a complex task. A variety of roles, business units, and departments need to work together to achieve these objectives—often a difficult process due to silos that organizational structures tend to create. To solve this challenge, many businesses are implementing what is known as a governance, risk, and compliance framework, or GRC.

Although GRC has become synonymous with solutions that enable governance, risk, and compliance activities, there’s more than that to the GRC’s scope. Here’s a look at what is governance, risk, and compliance (GRC) and why you need it.

What is governance, risk, and compliance—GRC definition 

The original definition of governance, risk, and compliance, introduced by the nonprofit OCEG,  was “the integrated collection of capabilities that enable an organization to reliably achieve objectives, address uncertainty, and act with integrity.”

Formerly known as the Open Compliance and Ethics Group, OCEG was formed following the “dot-com bust” with the mission to “improve corporate compliance and ethics.” The group came up with the GRC concept, which integrates governance, risk, compliance, assurance, performance management, and ethics.

The concept has since evolved, and many organizations think of GRC primarily in terms of the three components that comprise the acronym: governance, risk, and compliance. In its simplest form, GRC is a cross-functional management discipline that guides your organization’s strategy, infrastructure design, policy framework, and activities related to governing, managing risk, and maintaining compliance. GRC encompasses departments that range from IT and human resources to legal and internal auditing.

Governance, risk, and compliance are tightly linked and have some overlap, but each GRC pillar serves its own, specific purpose:

• Governance refers to the framework—rules, policies, processes, and procedures—that guides and directs how you operate your organization, including processes such as accountability, security, and transparency. Corporate governance, in turn, guides how you control information, which then informs your IT and data governance frameworks.
• Risk management refers to the continuous process of identifying, evaluating, analyzing, and minimizing the adverse effects (or risks) that your organization faces. Risk incorporates a number of categories ranging from financial to cybersecurity.
• Compliance encompasses the activities related to maintaining regulatory and government compliance. Compliance has broad implications but from an information technology perspective, the focus is on compliance with data privacy regulations such as European Union’s General Data Privacy Regulation (GDPR) and the Health Insurance Portability and Accountability Act (HIPAA).

The benefits of a GRC strategy

The business landscape is rapidly changing. The supply chain is more interconnected, the cybersecurity threats more sophisticated, and the regulations more complicated. These are just some of the factors that require you to constantly react to changes and adapt to new realities. This is where your governance, risk, and compliance strategy comes in to help you prioritize your needs and actions.

Some of the GRC benefits include:

• Eliminating corporate silos and redundancies through a unified, integrated approach
• Improving operational efficiencies and optimizing IT investments
• Reducing the costs of noncompliance, cybersecurity incidents, and other adverse events
• Making better decisions related to your business
• Strengthening business components such as ethics, integrity, transparency, and assurance

The role of GRC in data security

As one of the top risks that organizations across all sectors face today, cybersecurity has evolved from being an IT function to impact everything your organization does. Your GRC framework plays an important role in your ability to protect your business by maintaining the security and privacy of your data and other critical IT resources.

A secure data governance framework, informed by your overall GRC model, helps you manage and use data assets in a way that minimizes the risk to your business. The data governance framework serves to ensure the accuracy, confidentiality, integrity, and availability of your data—which enables you to maintain your business resiliency and meet your business objectives.

Strengthen your GRC capabilities

Maintaining governance, risk, and compliance activities related to your data resources is a time-consuming, expensive process. Take advantage of technology, such as identity governance and access management solutions, to modernize, automate, and optimize your GRC functions.

An identity security leader, SailPoint delivers technology solutions that streamline and simplify end-to-end GRC and help you stay ahead of risks. Learn more about SailPoint Identity Security.