GRC Maturity: Essential risk management processes
Last month we brought you What is GRC? Its Past, Present, Future, which shared the roots of governance, risk management and compliance (GRC), its current standing, and predictions for the future. To kick off April, we’ll share why it’s essential to mature your GRC processes to keep up with the state of integrated risk management.
North Carolina State University’s Poole College of Management just released its 2017 The State of Risk Oversight, which offers a perspective of enterprise risk management practices at medium and large organizations with the majority in finance, insurance, real estate, manufacturing, and services. Key findings from the study show how the task of risk management has gotten tougher across industries.
70 percent of those surveyed report risks are increasing in number and complexity.
Not there yet
Less than half label their firm’s risk management processes as “mature” or “robust”.
It’s a struggle
Most organizations polled struggle to integrate risk management with strategic planning.
The majority of boards want senior executives involved in risk oversight.
Many companies still use spreadsheets to manage risk and conduct compliance. Other businesses rely on a basic in-house solution to manage risk. Given these practices and the recent study findings, it leads us to conclude: the present climate for risk has made widely accepted practices obsolete, putting organizations at an even greater risk.
Enter GRC Maturity
Imagine a company that uses a GRC platform as a point solution to manage one or two compliance activities like policies and third-party assessments individually within specific departments. A sure sign of GRC maturity would be integrating these and other compliance and risk management functions enterprise-wide.
To show how this works, imagine an employee that violates company policy and takes an unencrypted laptop off-site, creating an incident. If the incident led to a data breach, it could impact the bottom line and damage the company’s reputation. With a mature integrated risk management system, the incident would have been triaged with priority given to business impact. It would have been treated as an enterprise-wide incident, not just an HR issue.
A GRC platform also provides senior execs with the detailed reporting needed to make smart business decisions. For example, a vendor is marked as high risk for failing to meet contract requirements. Since third-party reporting is shared with senior leadership, a decision could be made to switch vendors before an issue occurs.
With a GRC platform empowering the organization to manage risk from a company-wide perspective, it’s easy to envision risk management being part and parcel of strategic planning. The company with a bold agenda to grow and expand its operations can do so more confidently by understanding the inherent risks and managing them accordingly.
An essential aspect of maturing your GRC processes is understanding how mature your processes are today. Take our GRC Maturity Quiz to find out where you stand. If you need assistance interpreting the results, schedule a free consultation with one of our GRC experts.
With risks increasing in number and complexity according to the survey, the advantage goes to companies that mature their processes, integrate risk management enterprise-wide, and leverage a GRC platform’s capabilities for executive reporting and strategic planning.
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