What is governance, risk and compliance (GRC), and why do businesses need GRC software? According to Nicolas Racz, Edgar Weippl and Andreas Seufert, authors of the research paper, “Frame of Reference for Research of Integrated Governance, Risk & Compliance,” GRC is defined as “an integrated, holistic approach to organization-wide governance, risk and compliance ensuring that an organization acts ethically correct and in accordance with its risk appetite, internal policies and external regulations through the alignment of strategy, processes, technology and people, thereby improving efficiency and effectiveness.”
Their definition is an accurate agglomeration of GRC. We can simplify the definition by saying that the main purpose of GRC software is to use automation as much as practicable to document board activities associated with corporate governance, risk management and regulatory compliance.
How GRC Software Supports Good Governance and Compliance
GRC software assists boards in various ways in the areas of auditing, policy management, compliance management and risk management.
Auditors bear the responsibility to oversee financial matters and disclosures. They plan and perform the annual audit to ensure that financial statements don’t include material misstatements, whether they’re caused by mistakes or fraud. GRC software electronically files and organizes financial reports, so they’re easy to locate and retrieve as needed. In addition, GRC helps auditors manage workflows and schedule audit-related tasks and reporting.
Boards are responsible for creating and overseeing company policies. This isn’t a one-and-done activity. Policy management requires organizing and archiving documents so that boards can review them in relation to mandates, business objectives, risks and controls. Policies also need to be available to employees and business partners as necessary. GRC software makes accessing policy documents easy and efficient.
GRC software automates compliance management functions such as workflow, controls and associated risks, surveys, self-assessments, reporting, testing and remediation. This includes financial reporting to regulatory authorities and compliance with industry regulations.
Risk management professionals rely on GRC software to provide them with documents that provide a consolidated view of risks. Documents may include follow-up on incidents, credit risk analysis, market risk analysis and other risk reports.
Integration Is an Important Component of GRC Software
In one way or another, all decisions that boards make have a direct or an indirect impact on governance, compliance or risk. For this reason, it’s important for boards to set up electronic systems that integrate GRC software with other electronic business tools.
For example, GRC software may integrate with tools such as performance management software, secure messaging applications, accounting software, board evaluations, managing multiple entities, agendas and minutes, board evaluations and D&O questionnaires. All of these processes require strong security within the application and other processes with which they integrate.
How a Board Portal Can Serve as a GRC Software Solution
The volatility of the marketplace demands a high level of commitment to GRC. Boards are facing strong scrutiny by regulatory bodies, shareholders and other stakeholders. These issues require board directors to demonstrate leadership in developing a strong culture of GRC throughout their corporations. They can only accomplish this by abiding by governance principles, commanding strong oversight over compliance matters and developing acceptable risk profiles. It’s a tall order that boards face — one that requires a board portal that provides them with access to information and supporting documents on all aspects of GRC in real time.
Manual Processes Fail to Match the Pace and Complexity of Corporate Needs
Many of today’s start-up companies are taking advantage of digitization right from the beginning, which often allows them to gain traction against corporate staples in the industry. Entrepreneurs present fierce competition for existing industries that are undergoing digital transformation.
GRC software adapts more readily and automatically to rapidly evolving market and governance changes, especially with regard to new risk management issues, such as:
- Cyber threats
- Economic fluctuations
- Operational factors
- Environmental factors
- Geopolitical factors
Siloed processes and strategies are becoming antiquated by today’s standards. Board portals are GRC software solutions that report department by department, using automation to combine the results to form the scope to adequately address GRC. Evaluating risk and compliance across departments helps boards to measure and set targets more accurately, which supports good governance.
Diligent’s Governance Cloud Empowers GRC Digitally
Automation removes much of the human error that’s inherent with manual applications and processes. Board portals and fully integrated board software tools are the logical answer for all GRC-related activities, such as:
- Organizing and storing board materials
- Securing communications
- Conducting board evaluations
- Submitting compliance documents
- Recording board agendas and minutes
- Strategic planning and analysis
Governance Cloud by Diligent is more than a board portal. It’s a suite of GRC software solutions that are fully integrated within a platform that has the highest level of security possible. Fully integrated solutions promote stronger enterprise governance management throughout corporations and remove GRC gaps.
Governance Cloud empowers board directors to confidently meet the demands of the boardroom and the marketplace, despite the quantity and complexity of regulatory concerns. GRC solutions are especially important in light of the fact that boards are facing greater expectations for accountability than ever before.
Diligent Boards and the related products in Governance Cloud work together to seamlessly integrate compliance data from all relevant departments into a single framework. The structure of Governance Cloud helps board directors to assess and manage risks comprehensively while avoiding issues of wasting resources and duplicating efforts.
Board directors can manage documents and reports from a central dashboard that has analysis capability. Governance Cloud is a GRC software solution that simplifies auditing processes. The integrated suite of software solutions that comprise Governance Cloud fully integrates risk and compliance responsibilities while making governance transparent and actionable.
Board directors accept the responsibility to navigate their companies through the uncertain, rolling waves of legislation, regulations and risks. Scrutiny over GRC is likely to increase as technology continues to increase the complexity of the global business world.
A lackluster commitment to GRC carries challenging consequences for corporations. The resulting penalty may cost them financially, create instability and damage their reputations. To fulfill their fiduciary and other responsibilities to the best of their abilities, boards will need to rely on accurate, real-time information, such as Diligent’s Governance Cloud.