What is GRC?
GRC stands for “governance, risk management, and compliance.” As a concept, it refers to how a company acts to achieve its goals, manage uncertainty and follow the rules. GRC policies and procedures are often interrelated.
- Governance refers to the way executives, management and board of directors manage a company and direct it towards achieving its goals.
- Risk management refers to the way a company anticipates, forecasts, evaluates and creates safeguards to protect itself against the impacts of financial risks. These can take shape in procedures, policies, and even software.
- Compliance refers to a company’s ability to follow the letter of the law, regulatory guidance, rules and standards. It can also refer to internal policies and procedures that employees need to follow.
What is EGRC?
EGRC is similar to GRC. EGRC stands for Enterprise Governance, Risk Management and Compliance. EGRC refers to how an enterprise addresses governance, manages risk and compliance by creating policies, procedures, regulatory controls, risk assessment, risk monitoring and internal controls that employees must adhere to company-wide.
Why are GRC and EGRC important?
GRC and EGRC help organizations manage risk across an enterprise and prepare safeguards those against risks.
By having the correct mechanisms in place to identify, manage, measure, and anticipate risks, executive management can prepare policies and institute procedures to minimize risks and their impacts.
GRC and EGRC result in streamlined processes and standardized workflows.
In the process of creating the policies and procedures to minimize risks, enterprises develop workflows. This way, when a company encounters the backlash of a risk, there is already a solution and course of action set out for employees to follow.
GRC and EGRC buffers a company against regulatory scrutiny and errors.
So that companies can comply with regulatory rules and reduce the risk of material errors, they are forced to institute the proper checks and balances around data. These prevent errors from making their way into regulatory reports, affecting decisions, and negatively impacting the organization.
GRC and EGRC ensure that controls and systems are in place so data is consistent across the enterprise.
GRC policies can take on different shapes. When it comes to the treatment of financial data in a complex enterprise setting, the necessary software must be put into place to prevent errors from making their way through the chain of data into reports.
How to improve EGRC:
- Plan for the future using real-time performance data, forecasts, and models.
- Create business scenarios based on economic or environmental changes.
- Standardize procedures company-wide.
- Address what-if scenarios.
- Anticipate business risks based on qualitative data, financial and non-financial information.
- Place controls on data.
- Develop internal controls and standardized workflow.
- Monitor business metrics.
- Equip your people with the processes and technology to maintain compliance and manage risks.