What is GRC (Governance, Risk & Compliance) in Cyber Security?

Cyber security is critical to safeguarding your organisation. As cyber threats evolve and become more sophisticated, modern organisations need a more proactive and extensive approach to enhancing cyber security measures.

Companies are at risk of facing debilitating losses from cyber threats, which are considered a key operational risk by the International Monetary Fund (IMF). These cyber risks create a ripple effect that affects your entire organisation and could lead to higher operational costs and challenges in securing financing. Having a long-term cyber security strategy, alongside more comprehensive cyber security policies, can effectively reduce data breach incidents and enable affected companies to recover much faster.

Governance, risk and compliance (GRC) is a strategy that enables organisations to manage cyber risks more effectively. By implementing a GRC program, you can have a more holistic approach to managing risks.

What Is GRC? What Does GRC Stand for?

You may already be familiar with each of these concepts: governance, risk management and compliance. The thing is that most businesses tend to practise each concept separately. GRC combines all three into one comprehensive system.  

Governance, risk and compliance or GRC is a strategy that enables organisations to manage governance and cyber risks while complying with security policies and regulations. Implementing a GRC strategy requires you to build frameworks centred around cyber security policies and procedures. Typically, GRC processes involve identifying, evaluating and mitigating cyber security risks. 

Having a comprehensive GRC program helps you uncover benefits, such as:

• Having better control over your security and compliance measures
• Enhancing operational efficiency
• Reducing the risk of non-compliance
• Eliminating silos that hinder organisational collaboration and communication

Aside from policies, procedures and controls, technology also plays a major role in implementing GRC frameworks. GRC software like the IBM OpenPages GRC Platform provides businesses with solutions that:

• Enhance overall regulatory compliance management
• Improve the identification, monitoring and analysis of GRC challenges and business risks

To better understand GRC and the role it plays in your organisation, it’s best to look at its components one by one.

Governance

Cyber security should be part of any organisation’s foundation. It should be an integral aspect of your culture. This is why corporate governance plays a vital role in GRC-driven cyber security strategies.

Governance is a set of frameworks or policies developed to help organisations achieve their goals. It covers different aspects of your business, including accountability, ethics and management controls. For governance to be effective, everyone in your entire organisation, from the top down, must understand the role they play in your cyber security efforts. You must also document your policies and procedures, all while ensuring that cyber security remains an integral part of all your workflows.

Additionally, corporate governance ensures that your organisation-wide activities are monitored and aligned with your strategic business goals. Through effective governance, you can create an environment that:

• Makes employees feel empowered
• Is capable of balancing your key stakeholders’ diverse interests
• Enables better control over your facilities and infrastructures
• Facilitates control and coordination of resources and employee behaviour

Another benefit of proper corporate governance is that it enables leaders, including senior management and C-level executives, to leverage data and make informed business decisions that lead to better overall outcomes. Some key components of good governance include:

• Risk management
• Strategy management
• Policies on conflict resolution
• Corporate management

In the context of cyber security, corporate governance ensures that your organisation has clearly defined guidelines and roles to protect critical assets like data.

Risk Management

Adopting new technologies and embracing digitalisation can greatly benefit organisations. However, they can also make them more vulnerable to potential business risks. These cover strategic, financial and security risks, among others. Proper risk management involves several key actions intended to help organisations quantify and prioritise potential risks. These include:

• Identifying and assessing risks
• Implementing measures to manage risk
• Continuously monitoring and evaluating your risk management practices and policies

When developing your risk management program, you must:

• Evaluate key business components such as legacy technologies and system performance
• Identify bottlenecks in your operations and technology that may adversely impact your business
• Monitor your networks and resources for potential infrastructure risk or failure

Lastly, your enterprise risk management program must comply with your organisation’s goals (legal, ethical and social, among others). Think of risk management as a system that involves your entire organisation, workflows, processes and technologies. Enterprise risk management helps you establish business objectives that align with your values, protect your business from uncertainties and promote sustainability.

Compliance

Compliance management, in the context of cyber security and GRC efforts, ensures that your organisation adheres to relevant cyber security legal and regulatory requirements and standards. This covers data privacy laws, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), and best practices, among other policies and regulations. Complying with these guidelines enables organisations to protect sensitive business and customer data.

For regulatory compliance to be effective, you must identify areas that hold the biggest risks. You should then focus your resources on said areas and develop appropriate policies to address these risks. 

Your compliance framework may require you to:

• Develop and execute security measures
• Perform internal and external audits to ensure compliance
• Follow standard best practices

Aside from complying with regulations, compliance management helps demonstrate your organisation’s capacity for building trust and integrity.

Why Is GRC Important?

In the years following the pandemic, remote work has become the new norm. This, along with increased digitalisation and rising geopolitical tensions, has upended conventional IT structures and has made systems more vulnerable to cyber threats.

By implementing an effective GRC strategy, you can:

Improve cyber security

A GRC program will require you to re-evaluate and optimise your data security protocols.

Effectively leverage data

A GRC strategy allows you to make better use of your resources and tools to make data-driven decisions more quickly.

Optimise operations

GRC promotes a more transparent and ethical approach to operations. It also encourages better collaboration and communication throughout the organisation, helping break down silos and making departments more effective at identifying and addressing risks.

Improve resilience

By being able to identify potential risks and prepare for them accordingly, your organisation will be more capable of quickly responding to any changes in the business landscape. That also helps when you’re up against cyberattacks.

Gain a competitive advantage

An organisation with mature GRC capabilities is one that will easily stand out from the crowd. These are the types of companies that inspire greater trust and confidence among their customers and stakeholders.

How Does GRC Work?

A GRC system is made up of many moving parts. These include processes, technologies and people.

Key stakeholders

These include people at top leadership levels, such as your board of directors and executives, different departments (IT, legal and HR) and all your employees. The proper implementation of a GRC system requires coordination between all departments that handle data and practice GRC compliance.

GRC frameworks

GRC frameworks have several types, depending on what you want to focus on. For example, there’s the COSO for internal controls and COBIT for IT governance. Each one serves as a model, helping you manage governance and compliance risks within your organisation. Adopting a particular GRC framework also entails specific approaches you must adhere to so you can effectively mitigate risks and ensure compliance.

GRC software

Using the right GRC software can help your organisation develop and execute tailored policies and controls. The solution you choose will largely depend on what your organisation needs in the context of cyber security, governance, risk and compliance.

GRC certifications

GRC professionals hold certifications focused on GRC compliance, including the following:

• OCEG GRC Professional (GRCP)
• ISACA Certified Information Systems Auditor (CISA)
• ISACA Certified Information Security Manager (CISM)

Their knowledge and expertise on risk, compliance and governance can help organisations properly implement a GRC strategy.

Integrating GRC into your organisational culture

Your organisational culture and whether or not it supports changes brought about by a GRC strategy determines the effectiveness of the said strategy. Frameworks serve as models to help with GRC implementation, but your culture influences how decisions are made and how risks are managed.

What Are Common GRC Tools?

GRC tools are software solutions that include GRC software applications as well as solutions for user management and auditing. They help organisations facilitate regulatory compliance and evaluate risk. These tools also:

• Enable businesses to establish internal controls
• Implement organisational policies
• Promote data-driven decision-making
• Ensure the effectiveness of corporate governance

When choosing the right GRC software for your organisation, keep these points in mind:

Business needs

What gaps or cyber security challenges are you up against? Start by identifying your requirements. Then, determine how GRC tools can help you tackle these issues.

Users

The best tools are the ones that your organisation enjoys using. This means looking for a solution that’s easy to use and doesn’t come with a steep learning curve. You also have to factor in who the actual users are. Will it be only one team or will your entire organisation require access to the tool?

The role of the GRC tools

Will you be replacing old tools? What about your current tech stack? Consider these questions when looking for a GRC tool. See if it integrates seamlessly with your current stack or if it’s capable of replacing multiple tools.

Compatibility with your organisation

Even if you go for the best and most popular GRC tool around, there’s no guarantee that it’ll be the best one for your organisation’s specific needs. Before picking a tool, assess your current workflows and see how the tool will fit into your current capabilities.

Remember to compare other GRC solutions on the market and consider your budget. Sure, going for a more cost-effective option will save you money, but that doesn’t mean that it’s the best tool for your organisation. The same thing applies to more expensive options. When weighing in costs, also think about the level of support that a solutions provider offers.

One of the most important things to consider when picking GRC solutions is that you need to get everyone involved—not just your IT or cyber security department. That’s because all of your employees handle different types of data to varying extents.

How to Implement a GRC Strategy

Different business challenges drive the implementation of a GRC strategy. For example, your company may need more robust data privacy and protection measures or you might be looking for new ways to comply with regulatory requirements.

When implementing a GRC strategy, you must first define your goals, particularly what your organisation wants to accomplish by implementing the GRC model. You then need to assess the workflows and technologies you’re using. Determine if these are still capable of meeting your guidance, risk and compliance needs.

Getting buy-in from your senior management also makes it easier for your organisation to adopt a GRC strategy. Top executives play a major role in setting policies related to GRC. It’s also crucial for them to understand how this strategy can help them make data-driven business decisions. You’ll then need to look for the right GRC solutions for your business. From there, you need to test the GRC framework and define clear roles and responsibilities for the entire organisation.

What Are the Challenges of GRC Implementation?

Implementing a GRC framework won’t always be smooth sailing. Challenges like the following can hamper implementation:

• Change management. You must have a change management program in place so that your organisation can continue to make decisions based on GRC insights.
• Communication. Effective GRC implementation relies heavily on seamless communication. You must set guidelines to facilitate proper communication so that information can be shared across departments more effectively.
• Lack of a complete GRC framework. The evolving business landscape, along with changing requirements and regulations, can pose a serious threat to organisations looking to implement a GRC strategy. You must be able to properly integrate your GRC framework to avoid ineffective implementation.

What Is the GRC Capability Model?

The GRC Capability Model was developed by the Open Compliance and Ethics Group (OCEG). It has guidelines that help companies effectively implement a GRC program. It’s divided into four parts, each of which focuses on helping you build a GRC implementation strategy focused on cyber security.

Learn

This stage involves setting goals and assessing your company’s values and culture. Doing so allows you to identify strategies that will help your organisation achieve its objectives.

Align

The design phase requires you to evaluate how different GRC components align with your GRC strategy, procedures and objectives.

Perform

At this stage, you’ll be implementing your GRC strategy and cyber security controls. You’ll need to coordinate with different departments to ensure that your cyber security measures are being practised.

Review

This stage entails re-evaluating how your GRC strategy is working, whether or not it’s effective and if it still aligns with your business goals.

Effective GRC Implementation

With proper GRC implementation, your organisation can drive operational efficiency by eliminating process or data silos and predicting cyber risk events. It also helps you streamline risk assessment management to address and reduce risks proactively. In essence, implementing a GRC strategy positions you to make better, data-driven decisions in a risk-laden landscape.

About the author

ProtectCyber is a leading Australian cyber security firm dedicated to safeguarding businesses and individuals from digital threats. Our expert team, with decades of combined experience in the field, provides insights and practical advice on staying secure in an increasingly connected world. Learn more about our mission and team on our
About Us page.