Enterprise governance, risk, and compliance (EGRC) is a strategy for governing an organization’s overall governance, enterprise risk management, and regulatory compliance.
Governance, risk, and compliance (GRC) is both a more strategic and, in some respects, more tactical approach to integrating IT with company goals. Consider it a method for aligning IT with corporate objectives while also managing risk and meeting compliance standards. Well-planned GRC initiatives have several advantages, including better decision-making, more effective IT investment decisions, eliminating silos, reduced departmental and corporate fragmentation, etc.
What is governance, risk, and compliance (GRC)?
GRC is a more general term that refers to the unified risk management across business units, departments, and functions. It encompasses enterprise risk management, compliance, third-party risk management, internal audit, and more. GRC leaders are now seeing the value of sharing data and intelligence to achieve better results and build a robust, more resilient organization, even though each discipline has its own priorities and often its own approach.
What is enterprise governance risk and compliance (EGRC)?
EGRC is an acronym for enterprise governance risk and compliance. EGRC refers to how an organization manages risk and compliance by implementing rules, processes, regulatory controls, risk assessment, risk monitoring, and internal control systems that employees must follow across the company.
The distinction between GRC and EGRC is subtle. The ‘e’ in EGRC stands for ‘enterprise,’ implying that enterprise governance risk and compliance methods may be divided or business-stream specific, while strategies can span the company. Enterprise governance risk and compliance strategies enable executive management to create policies and institute procedures to reduce risks and consequences by employing the appropriate control mechanisms.
The difference between GRC and EGRC
GRC and eGRC allow businesses to tackle risk methodically and data-driven. A risk management approach monitored by secure governance processes enhances internal and external standards compliance. EGRC refers to an enterprise-wide strategy. In theory, enterprises should implement all high-quality enterprise governance risk and compliance techniques across the company’s operations.
Unstructured GRC methods may result in data inconsistency and a lack of valuable data. An organization’s GRC strategy remains fractured and lacks insight into risks if it does not have a structured, pan-organizational risk management framework.
A more comprehensive approach enables enterprise governance risk and compliance data to be more trusted and less prone to reporting errors and non-compliance. Effective decisions are aided by adequate information and a more farsighted risk vision. An organization’s capacity to report and deal with risk improves.
The key to achieving this is establishing a robust, standardized enterprise governance risk and compliance framework that can be applied across the enterprise. A comprehensive and integrated approach ensures that all aspects are addressed, tactics are effective, and GRC reporting is reliable based on accurate data.
Making your approach enterprise-wide and embedding GRC throughout the company takes it to the next level as EGRC, enabling you to see the results of your efforts.
The correlation between governance, risk, and compliance
Organizations often tackled enterprise governance risk and compliance as separate activities in the past. Frequently, new laws, litigation, data breaches, and audit findings prompted the creation of new processes or systems with little regard for how those influenced the rest of the organization. As a result of this fractured approach, organizations are often faced with inefficiencies, redundancies, and inaccuracies.
A fractured GRC approach not only complicates the strategy unnecessarily but also produces conflicting actions towards enterprise governance risk and compliance. The traditional fractured approach also cripples organizations’ ability to assess risks and their possible impacts resulting in a lack of visibility on the risk landscape.
Each of the three disciplines (governance, risk, and compliance) creates valuable information for the other disciplines. All three impact the same technologies, people, procedures, information systems, and organization in the end.
Siloed teams are clueless about how their actions and approaches influence the company’s risk posture and success
There is much repetition when the three processes of GRC are handled independently. Multiple teams spend hours collecting the same information, only to spend additional time untangling sources to analyze data.
Worse yet, blind processes and a lack of transparency leave the organization ignorant of insights and relationships between risks, damaging the whole system by allowing gaps and duplicate controls to go unnoticed. Siloed teams are clueless about how their actions and approaches influence the company’s risk posture and success.
It’s extra work to manage GRC in separate silos – and the return on that investment is minimal. It’s almost impossible to identify problems and disparities if there isn’t a comprehensive view of all GRC-related activities. Suppose a potential hazard can go unnoticed and unaddressed. In that case, the organization may not recognize its full impact until it’s too late.
What is the difference between GRC and IRM?
Gartner coined the term Integrated Risk Management (IRM) in 2017. According to the research company, GRC solutions became outdated since they only focus on compliance-based requirements rather than valuable insights linked to company goals and IRM goes well beyond traditional, compliance-driven GRC technology solutions to deliver practical knowledge congruent with company goals rather than simply regulatory demands.
According to ISO 31000:2015, IRM allows for the simplification, automation, and integration of critical, operational, and IT risk management procedures and data. The capacity to provide a vertically integrated perspective of risk starting with an organization’s strategy through its business operations is essential to IRM’s success.