Governance, Risk Management, and Compliance (GRC) Practice
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A Governance, Risk Management, and Compliance (GRC) Practice is a management practice that integrates the processes and capabilities necessary to ensure that an organization effectively manages governance, mitigates risks, and maintains compliance with relevant regulations and standards.
- Context:
- It can (typically) involve the development and enforcement of governance frameworks to ensure accountability, fairness, and transparency within the organization.
- It can (often) include the implementation of risk management strategies to identify, assess, and mitigate potential risks that could impact the organization's objectives.
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- It can range from regulatory compliance activities ensuring adherence to laws and regulations, to internal policies and procedures designed to maintain ethical conduct.
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- It can involve coordinating efforts across various departments such as internal audit, legal, finance, and IT to ensure that governance, risk, and compliance activities are aligned.
- It can leverage technology solutions such as GRC software platforms to automate and streamline governance, risk, and compliance processes.
- It can adapt to evolving regulations and emerging risks, requiring organizations to update their GRC practices regularly.
- It can focus on fostering a culture of compliance and ethical behavior throughout the organization, supported by training and awareness programs.
- It can be supported by a GRC-Supporting Systems (possible based on a GRC platform).
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- Example(s):
- a Domain-Specific GRC Practices, such as:
- A Financial Institution GRC Practice to manage risks related to regulatory changes.
- A Healthcare Institution GRC Practice to monitor compliance with patient privacy laws.
- A Multinational GRC Practice to ensure local laws and regulations compliance.
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- a Domain-Specific GRC Practices, such as:
- Counter-Example(s):
- Isolated Risk Management Practices, which may focus only on specific types of risks without integrating them into a broader GRC framework.
- Reactive Compliance Programs, which only address regulatory requirements after violations have occurred, rather than proactively managing compliance.
- Ad hoc Governance Approaches, which lack formal structures and processes, leading to inconsistent decision-making and accountability.
- See: Regulatory Compliance, Governance, Risk Management.
References
2024
- (Wikipedia, 2024) ⇒ https://en.wikipedia.org/wiki/Governance,_risk_management,_and_compliance Retrieved:2024-8-25.
- Governance, risk management and compliance (GRC) is the term covering an organization's approach across these three practices: governance, risk management, and compliance. The first scholarly research on GRC was published in 2007 where GRC was formally defined as "the integrated collection of capabilities that enable an organization to reliably achieve objectives, address uncertainty and act with integrity." The research referred to common "keep the company on track" activities conducted in departments such as internal audit, compliance, risk, legal, finance, IT, HR as well as the lines of business, executive suite and the board itself.