2024 Trends in Governance, Risk Management & Compliance (GRC)
In 2024, the Governance, Risk Management, and Compliance (GRC) landscape is evolving rapidly. Organizations are increasingly facing complexity and chaos driven by several factors, such as changing regulations, external risks and uncertainty, as well as dynamic and evolving business operations, processes, and technology. These drivers push companies to adopt innovative GRC strategies to stay agile, resilient, compliant, and competitive.
The key GRC trends in 2024 that GRC 20/20 Research has identified and are monitoring include:
- GRC 6.0 – Business Integrated GRC. This trend marks a paradigm shift where GRC becomes seamlessly integrated into the core business processes. It aligns closely with the organization’s strategy, performance, and objectives. It is pushing GRC accountability and control into business processes and the business instead of additional layers of compliance band-aids disconnected from the business.
- Risk Management = No Surprises (or Minimal). Mature risk management processes in 2024 aim to minimize surprises. Organizations increasingly use predictive analytics and other advanced tools to anticipate potential risks and mitigate them proactively. It is about forecasting risk and uncertainty on the horizon, going through scenarios, and preparing the organization for the best path forward..
- GRC Orchestration. In 2024, GRC management will be increasingly collaborative and a cross-functional responsibility. This trend emphasizes visibility and consistency in GRC processes across all departments and functions. For instance, a multinational corporation might use common processes automated by technology across different geographic locations, ensuring uniformity and reducing risk exposure. Some solutions allow for GRC centralization while allowing some autonomy with consistency within business areas.
- Addressing Geopolitical Risk. Geopolitical risk has become a primary focus area. Organizations need clear insights into the evolving geopolitical landscape to understand how it might impact their objectives. For example, a global supply chain company might monitor international trade policies, economic and inflation uncertainties, commodity availability, conflicts, and more to anticipate and prepare for disruptions.
- Risk Agility. This trend involves organizations being agile in their risk management strategies. They continuously scan the horizon for potential risks, review scenarios, and chart the best path forward. An organization may use scenario planning to prepare for various economic conditions, ensuring it adapts quickly to changing circumstances.
- Business, Strategic & Operational Resilience. The ability to quickly recover from risk events is crucial in 2024. Companies focus on building resilience in every aspect of their operations. This includes resilience of the organization’s strategy, financial resilience, and, more specifically, its operational resilience to contain and recover from risk events.
- ESG and Integrity. With rising global concern over environmental, social, and governance (ESG) issues, organizations are working to manage the complexities of ESG commitments. This includes accurate reporting to ensure organizational integrity within the business and across the extended enterprise of third-party relationships.
- Trust Assurance & Data GRC. Businesses increasingly focus on integrity throughout their operations, processes, transactions, data/information, and relationships. Trust is critical for investors/stakeholders, employees, customers, and business partners in today’s business. This is particularly true in dealing with the complex uncertainty and compliance requirements across information, data, transactions, and interactions.
- The Extended Enterprise. In 2024, managing risks and maintaining ethical environments across extended business relationships is crucial. Companies must ensure that their partners, suppliers, and distributors adhere to the same ethical and compliance standards, and that risk is management in these relationships. This is particularly true in addressing ESG across the extended enterprise.
- A.I. GRC/ A.I. Governance. The governance of AI use within organizations is a growing concern. Companies are focused on ensuring AI is used ethically and effectively to reduce uncertainty. Organizations across industries need to implement oversight of AI to review and approve AI algorithms used in the organization.
- Cognitive GRC. Utilizing AI to enhance GRC processes is becoming more prevalent. Cognitive GRC uses AI to increase efficiency, effectiveness, resilience, and agility in GRC activities.
- Accountability. There is a global focus on enhancing accountability in risk and compliance, particularly at the board, executive, and senior management levels. This means greater transparency and responsibility for GRC decisions and actions. The growing array of accountability regimes (e.g., U.K., Ireland, Australia, Hong Kong, Singapore, South Africa) is expanding, as well as legal accountability in the USA for key business and GRC executives.
- GRC and Cultural Contexts. Organizations operating in diverse cultural and geographical contexts face unique compliance, ethics, and ESG challenges across these business areas. Navigating these differences requires a nuanced approach, understanding, and respecting local values and regulations.
- GRC Engagement. The human element in GRC is critical. Ensuring employees at all levels are engaged with policies and controls and trained to identify and report issues is essential for effective GRC. Regular training and clear communication channels are key strategies in this area. This is the most important firewall in the organization, the human firewall.
- Business Champion.: When GRC is implemented effectively, it fosters champions at all organizational levels. These champions advocate for and reinforce GRC principles, helping to embed a culture of ethics, risk management, and integrity.
In summary, the GRC landscape in 2024 is characterized by a dynamic interplay of integration, innovation, and responsiveness. The trends outlined above reflect a holistic and forward-thinking approach to governance, risk management, and compliance. Organizations are increasingly weaving GRC into the fabric of their business operations, aligning it with strategic objectives and cultivating a culture of resilience and integrity.
The shift towards Business-Integrated GRC, the emphasis on predictive risk management, and the orchestration of GRC across departments highlight a proactive and integrated approach. Addressing geopolitical risks, ensuring risk agility, and maintaining business resilience are now fundamental to organizational sustainability and success. Moreover, the focus on ESG, trust assurance, and accountability underscores the growing importance of ethical practices and transparency.
Technological advancements in AI and cognitive GRC tools are transforming how organizations manage compliance and risks, bringing efficiency and agility to the forefront. The extended enterprise concept emphasizes the need for ethical and compliant practices beyond an organization’s immediate boundaries.
Finally, the human element remains central to effective GRC. Engaging employees, fostering a culture of compliance, and creating GRC champions at all levels are crucial for embedding these practices deeply within an organization.
As we navigate through 2024, these trends in GRC are not just about managing risks or complying with regulations; they are about creating sustainable, resilient, and ethical organizations capable of achieving their objectives while thriving in an ever-changing global landscape.