Investigations management processes are enabled through implementation of the right investigation technology platform. The technology solution is crucial, because it offers the adaptability needed for the dynamic nature and geographic dispersion of the modern enterprise.

Investigation management applications are intended to manage, in one common framework, all departments, divisions, related companies and types of investigations and incidents. This investigation management platform enables investigation team members to be shared across multiple entities (companies, divisions and departments) as needed, or restricted to just one entity or set of discrete participants when appropriate. Investigations platforms offer a common and consistent approach to report incidents (e.g., hotlines), handle escalation, manage investigation processes, and analyze loss. They enable an organization to evaluate the criticality of incidents, assign investigation team members, monitor business impact, manage the investigation process, and report on loss and impact across business areas. It maintains detailed investigation history and audit trails, manages the lifecycle of investigations, links incidents to remediation procedures, and identifies trends to monitor similarities and relationships across investigations.

Organizations considering an investigation management platform should evaluate the following during the selection process:

• Organization management:Whether it is a business process, a physical asset, an information asset, a business relationship, an individual, or the entire organization, investigations apply to some structure of the organization. An investigation management system needs the ability to model the organization and map investigations to organizational structure categories — whether geographic, process, business unit, or information.
• Accessibility:Investigations generally require the involvement of multiple individuals across an organization. An investigation management system must provide secure access and a complete system of record that an individual can log into to find required tasks, evidence management, and related policies and procedures to guide investigation activities.
• Workflow:Investigations require process management through a standardized workflow. This provides the ability to prioritize, assign and track incidents from identification to resolution. Within each incident the organization should have the ability to assign a lead investigator and support staff, and notify personnel when incidents enter their case-management queues.
• Task management:An investigation management system delivers the ability to track a variety of activities at different stages of execution. Tasks are assigned and communicated based upon roles, responsibilities and incident category, providing a collective overview of each individual’s task list of outstanding work items and due dates, and prompts individuals with reminders of upcoming activities.
• Content management:An investigations platform requires a breadth of content management functionality, including content repository, version control, access management, and records and retention management. This is typically the portion of the application that will provide collection and management of evidence, as well as details about how the investigation was conducted.
• Audit trails:Every assignment, person, piece of information collected, developed, changed, distributed, archived, surveyed, notified, and read should be accompanied by an audit trail to document every who, what, where, and when. The level of audit trail needed for investigation management cannot be maintained with manual processes and ad hoc systems spread across an organization.
• Interaction with other GRC applications:When incidents or investigations occur, it is important to identify not only what went wrong, but to make changes that can prevent similar occurrences. Policy, risk, control, and compliance applications must be cross-referenced to investigations and share information.
• Enterprise loss analysis: The solution should have capability to categorize, measure, allocate, record, and report on losses across the organization. This includes analytic capabilities to model and report on loss trends — such as root-cause and trend analysis, ability to report on loss and event data to the control environment, as well as the ability to provide for loss distributions and calculations.
• Remediation management: The solution should have ability to track and manage the remediation process. Specifically, organizations must look for the ability to track and monitor the status of remediation such as recognized control gaps, audit findings, safety violations, and regulatory interactions and reporting.
• Hotline integration and reporting: An important feature is the ability of the system to integrate with the organization’s anonymous hotline/whistleblower system used to report incidents and events. The system should be able to inquire reporters (whether known or unknown) to communicate investigation status as well as ask further questions needed for the investigation.
• Security architecture: Investigations management platforms are effective only if the organization can tightly control access to sensitive information. Security is a critical element of consideration in an investigations platform — an inherent weakness in spreadsheets and homegrown databases. Organizations must select a solution with proven security architecture with features such as role-based administration of privileges, integration with directory services, secure-access incident data down to the individual field level, protection of the identity of the individuals involved, and ensuring the integrity of the organization’s confidential information.
• Reporting and dashboarding: An investigations management platform provides an easy-to-use interface for reporting and managing investigations. Specific features to consider include the ability to monitor investigation status, measure and report on impact, production of reports to track incidents by type, date, person, location, financial impact and other attributes. Dashboards provide management with real-time access to current incidents, resolution status, key metrics, and the relationship of incidents or events, to identify trends and relationships.
• Configuration flexibility: The strongest solutions support flexible configuration without code customization — configurability refers to the ability to manage structures, rules, data elements, workflow, fields, interface layout, and user-interface characteristics without customization.
• Usability: Investigation personnel should be able to use the system without being technically savvy. Organizations should select a solution that has an intuitive look-and-feel with navigation, and presentation of information that minimizes the need for user training, particularly when some investigations and participants may use the system infrequently.
• Scalability: Platforms must be able to handle multiple people accessing the systems from across a distributed enterprise that may span the globe, with many investigations occurring simultaneously and at different stages of the process.

I would love to hear your experiences and thoughts on what to look for in investigation management platforms, please follow the link to comment on my blog.

 

Policy management is a critical component of a governance, risk, and compliance (GRC) strategy because it describes the desired practices and behaviors of the company under specific circumstances. Too often, the organizational approach to managing corporate policies and procedures is in complete disarray and chaos. The breadth and depth of the voluminous increase in relevant laws and regulations can’t be grasped in the manner enterprise behaviors are currently directed and coordinated.

The typical organization suffers with ineffective policy structures, content, coordination, lifecycle management, accessibility, accountability, and communication. As a result, organizations have:

• Policies scattered across dozens of places: There is no single authoritative source where policies and procedures are consolidated, maintained, and managed. No single portal exists where an individual can see the policies that apply to their role, structured to support efficient access.
• Policies bound by paper: With numerous printed policy manuals, the typical organization has not fully embraced online publishing and ubiquitous access to policies and procedures.
• Policies grossly out of date: In most cases, a published policy is not reviewed and maintained on a regular basis. In fact, many organizations have policies that have not been reviewed in years for applicability, appropriateness, and effectiveness.
• Policies have no owner: The typical organization has numerous policies and procedures that lack an owner responsible for managing them and keeping them current.
• Policies lack lifecycle management: Most organizations maintain an ad hoc approach to writing, approving, and maintaining policy with no defined system for managing the workflow, tasks, versions, approval, and maintenance processes.
• Policies do not map to exceptions or incidents: Typically, an established system to document and manage exceptions to policy is missing. Further, there is a lack of a structure to map incidents, issues, and investigations to policy — the organization is unaware of where policy is breaking down.
• Policies do not map to standards, rules, or regulations: The typical organization does not have the ability to define and maintain a record of policies that address legal, regulatory, or contractual requirements. The organization does not have the ability to easily assess the impact of new or changing regulations that affect policy.
• Policies lack adherence to a consistent style guide: The organization has policy that does not conform to corporate style and templates. Policies use complex language, excessive legalese, and are often written in the passive voice, making it difficult to read.

I would love to hear your thoughts on the chaos, disarray, and hordes of policies you see scattered across organizations and corresponding GRC policy management strategies to address this issue.

 

Policies define boundaries for behavior of business processes, relationships, systems, and individuals. At the highest level, policies start with the Code of Conduct, laying forth ethics and values that extend across the enterprise. These filter down into specific policies at the enterprise level, into the business unit, department, and individual business processes. Expectations of conduct are written into policies, so individuals know what is acceptable and unacceptable.

Policy, done right, articulate corporate culture, the boundaries of individual and business behavior, and personal conduct. Consider that:

• Policies articulate the governance culture and structure: Without policies there are no written standards about acceptable and unacceptable conduct. Without good policy, culture morphs, changes, and takes unintended paths without a compass to guide its way.
• Policies articulate a culture of risk: This includes risk responsibilities, communication, appetite, tolerance levels, and risk ownership. Every organization takes risk — it is part of business. Without clearly written guidance and ownership, risk governance policy will be ineffective.
• Policies articulate a culture of compliance: Policies define what is acceptable and unacceptable. This starts with legal and regulatory requirements:  communicating how the organization will stay within legal boundaries given the various jurisdictions in which it operates. Policies establish the values, ethics, commitments, and social responsibility of the organization, when it comes to matters of discretion.

It is important to be clear: Policy does not provide corporate culture, nor does it resolve the issues of  governance, risk or compliance (GRC). An organization can have a wide array of policies that are not adhered to, and end up in very hot water. However, policies are a necessary means to clearly define, articulate, and communicate the organization’s boundaries, practices, and expectations. An organization can have a corrupt and convoluted culture with good policy in place, though it cannot have a strong and established culture without it. The right policy is necessary to define and communicate what the organization is about.

Policies are the vehicle that communicates and defines culture so culture does not morph out of control. This requires policy to be adhered to at every level, exceptions to policy be governed, and violations be dealt with consistently and responsively. Because policy can establish liability, mismanagement of policy can introduce liability to the organization as a policy establishes a duty of care for the organization. Reliance upon policy violation as a duty of care can be used by regulators, prosecuting and plaintiff attorneys, and others to place culpability on an organization. It is paramount for an organization to establish policy it is willing to enforce – but also necessary to closely manage and monitor the policies that are in place.

I would love to hear your thoughts on Why Policies Matter and corresponding GRC strategies.

Investigation Lifecycle Management (ILM) enables organizations to manage the lifecycle of investigations, resulting in investigations that are handled consistently with collaboration across investigation roles and accountability into how the investigation is conducted and resolved.

Organizations benefit from consistent investigation documentation and process while maintaining data integrity and confidentiality. ILM is the process of managing and maintaining investigations throughout the organization for all categories of investigations (e.g. retaliation, abuse, fraud, privacy, theft, vandalism). The goal of the ILM approach is to document accountabilities, provide audit trails, coordinate with internal and external resources, specify monitoring activities, and provide a consistent process and investigation case review cycle.

The lifecycle is defined in five primary stages: 1 — Something Happened! Something has happened and the organization is faced with the question — should we investigate? The organization needs a clear guide to determine when an investigation should be conducted. An investigation should not be taken lightly, and should be clearly documented. Every organization requires the capability to identify, prioritize, investigate, and resolve issues. Structures (e.g., management, technology, process) should be embedded within the organization to help identify potential inappropriate activity. Drivers to conduct investigations include: employee reports or comments to management, risk indicator thresholds being exceeded, hotline reports, survey feedback results, recognition that controls have been circumvented, and others. An active monitoring process is implemented to identify when an investigation needs to be conducted, this includes:

• Hotline: The ability to provide anonymous reporting of actual or perceived misconduct and issues (e.g., anonymous web or call center reporting).
• Audits/assessments: Identifies issues to investigate through interviews, data or other testing, surveys, and assessment responses.
• Exit interviews: Interviews at employee exit may expose issues that the soon to be former employee is aware of.
• Corporate chatter: There is often some truth in rumor, what is the word on the street, around the coffee station, and in the lunch cafeteria?
• Social media: Facebook, Twitter and other social media sites are increasingly being used for venting and disclosure of malfeasance.
• Reporting to management: Written or verbal disclosures to management, direct reports or otherwise should not be overlooked or taken lightly; management needs to be held accountable to properly record what has been reported to them directly.

2 — Categorize and Assign. After the intake of a potential incident it is critical to understand what happened, who may have been involved, date of occurrence, and initiate the investigation. This involves:

• Issue filtering: There may be duplicate reports, misguided reports, and just noise that need to be consolidated or set aside. The goal is to have a quick triage process to identify what is relevant to investigate.
• Investigation categorization: The organization is to have established and predetermined categories of issues and response plans to engage appropriate resources and establish the security levels within the process. This categorization creates predetermined activity assignments and identification of information that must be gathered throughout the investigation.
• Investigation assignment: Determine what area, investigation lead, and subject matter expertise based on the categorization is the next part of the process. Here, the organization determines competence and independence (e.g., is attorney client privilege needed, should an external party be engaged). Often these business decisions can be predetermined based upon the category or suspects associated with the investigation.
• Policies and templates for response: Prepare and plan for what steps are to be taken before you have to respond. When the organization appears to be scrambling and going in different directions investigations fall apart. The organization needs clearly defined policies and process templates defined ahead of time for the various investigation categories it has defined.

3 — Investigate. After classification and assignment the organization next moves into the formal investigation process. Investigation activities can be predetermined to a certain extent and by doing so, critical instructions, considerations and guidance should all be readily available and enforced. Critical components of managing the investigation include:

• Evidence handling: Based on the classification of the investigation the organization needs the right capabilities to manage and handle the collection, preservation, and retention of evidence.
• Subject matter experts: Specific subject matter experts need to be engaged for the twists and turns an investigation may take. This may include experts in interview/interrogation, documentation, written statements/ depositions, physical and cyber forensics, as well as other areas.
• Documentation: Success of an investigation hinges on the correct documentation of how the investigation was conducted, who was involved, and what steps/actions were taken.
• Collaboration: A critical component of an investigation is the ability to collaborate between parties. This includes investigation personnel inside and outside the organization, parties involved in performing the investigation, those that reported it, as well as management responsible for overseeing the investigation. Communicating, securing and providing access to need-to-know information maintains the correct lev
  el of understanding on status, outcomes, unresolved questions, and actions regarding the matter.
• Escalation procedures: During the course of an investigation, it may be necessary to escalate issues to another team and get involvement of higher levels of management or even law enforcement and regulators. Predetermining the criteria necessary to make this decision with the advance approval of company leadership will enable the investigation to continue the course approved by the company without jeopardizing the integrity of the investigation or increasing the risk to the resources involved.

4 — Resolve. The process of concluding an investigation is established to organize, preserve, and direct concluding activities according to established investigation procedures:

• Final documentation: The final form of the investigation notes and documentation needs to be complete, addressing the who, what, when, where, why and how in the cause of the matter. This includes documentation of all investigation activities, involved parties, dates, time frames and other relevant information to complete the historical record of how the investigation was conducted and what was found.
• Disclosure, restitution, and discipline: The organization needs to follow through with the proper resolution activities to wrap up response. This includes what public or private disclosure, restitution to injured parties, disciplinary actions, or sanctions placed upon companies, groups or individuals have been taken. These actions are to be commensurate with the offense, company policy, and law. Handling these acts with consistency will protect the organization from claims of prejudice and favoritism.
• Loss reporting: Losses resulting from incidents and issues that have been investigated are to be documented. This includes calculating the business impact of the issue including tangible loss from: internal and external investigation cost, litigation costs, fines, penalties, judgments, impairment of assets, market cap reduction, workforce turnover, customer turnover, and business interruption. The organization should also put some numbers estimating intangible loss metrics to reputation damage and negative media.
• Incident metrics: The organization is to track metrics on each incident including incident type/category, loss, and time for the investigation. Other necessary metrics include date of incident, when it was detected, when it was reported, when and how long it was investigated, and when it was resolved. The goal is to understand the lag between incident and resolution and reduce the window of exposure and loss to the organization.
• Lessons learned: A final lessons learned should be documented for incorporating into future risk evaluations and business decision processes which provide historical information relevant to decision making for the today and the future.

5 — GRC Integration. Investigations should not operate as an island disconnected from other GRC processes. The information gathered from investigations is critical to refining and improving other GRC related processes. Organizations are to develop and integrate a GRC information and process architecture that feeds investigation metrics into:

• Policy & training: Incidents and issues are violations of policies. Violations that have been investigated are to be communicated and integrated into the policy life cycle management process to initiate policy review activities and drive continuous improvement.
• Risk models and assessments: Use of loss information and details of what occurred from the investigation provides valuable information necessary to drive risk models and identify target risk areas. This enables the organization to identify and avert future incidents and loss to the organization.
• Remediation of control weaknesses, vulnerability, and exposure: Establish actions items to prevent and or detect similar violations in the future. The critical component is the hand off and monitoring of the remediation activities and the capture of relevant action information with the investigation closure.

In the previous articles we discussed Why Investigations Matter, Varied Approaches to Investigations Scattered Across the Organization, and Establishing Investigations Oversight. In the meantime, I would love to hear your thoughts on Investigation Lifecycle Management and corresponding GRC strategies.

Sincerely,

Michael Rasmussen, J.D., CCEP, OCEG Fellow Business Ethics & Compliance Lecturer, Author, & Advisor [email protected]

 

In the previous posts we discussed Why Investigations Matter and Varied Approaches to Investigations Scattered Across the Organization, we now turn our attention to the issues of having proper oversight for investigation processes within the organization.

Organizations are developing strategies to consistently manage a growing body of GRC-related processes that have historically been scattered across the organization – the goal is to deepen transparency and collaboration across the organization. Internal investigations are a function of these processes that organizations strive to make more efficient, effective, and agile. GRC works by breaking down functional silos, connecting team members inside and outside the enterprise, and ensuring transparency and accountability for every action.

The goal is to bring the areas of governance, risk, and compliance into harmony. It enables different areas of the business to be accountable where they excel without dominating others: promoting collaboration and information-sharing to achieve a holistic view of GRC across the business. It provides collaboration as well as accountability across GRC-related processes scattered across the business to work together in harmony, delivering increased efficiency, effectiveness, and agility to the business.

A GRC approach to investigation management provides enterprise visibility across investigations processes. It enables investigation teams across the organization to work in harmony in their distributed functions. The goal of a GRC approach to investigations is to provide assurance that investigations will be handled appropriately, consistently, and in a timely manner while providing useful information to other GRC processes such as risk, policy, and audit.

A GRC approach to investigation allows the organization to achieve:

• Agility: Business changes rapidly and requires investigation processes that are quick to react to incidents as they arise. Scattered investigation efforts slow down the business and handicap today’s dynamic business.
• Consistency: Varying investigation teams in the organization need to work together in an integrated methodology and understand how their roles fit into the big picture. When silos are allowed to go their own way the organization loses visibility.
• Efficiency: Leveraging common processes, technology, and information minimizes redundancy and wasted resources. Manual and document-centric processes are inefficient and burden the business.
• Transparency: 360-degree visibility across key incident and loss indicators monitor the organization’s health and avert or mitigate disaster. Without full transparency across issues the organization is taken off guard.
• Accountability: Increasing governance demands require a system of accountability where the status of issues is apparent, and individuals are accountable for resolution. A lack of accountability and ownership of specific issues is a warning sign for regulators or 3rd parties to dig deeper.

GRC in investigation governance is made possible by three key functional capabilities:

• An organized Internal Investigation Committee to govern the oversight and guidance of investigations and ensure investigations are managed consistently across the enterprise.
• An individual assigned to the role of Internal Investigation Manager to assure accountability across the investigation lifecycle to the standards and processes defined by the Investigation Management Committee.
• A well designed Investigation Lifecycle process that delivers efficiency, effectiveness, and agility to the business.

The Internal Investigation Committee (IIC) provides the structure and connective tissue to coordinate and drive consistency across distributed investigation teams and is comprised of team members that represent the best interest and expertise of the different parts of the organization. This committee is comprised of individuals from legal, compliance, audit, fraud, physical security, IT security, quality, health and safety, and other relevant areas of the business with investigative responsibilities.

The IIC carries out its investigation governance responsibilities by leveraging commonly developed and agreed-upon investigation policies, procedures, processes, and technologies that form the Investigation Lifecycle management. The role of the Internal Investigation Manager is to be the champion that sees that the lifecycle is followed.

In the next post we will look at the Investigations Lifecycle in more detail.  In the meantime, I would love to hear your thoughts on Establishing Investigations Oversight and corresponding organizations strategies.

 

In the previous newsletter/post we discussed Why Investigations Matter, we now turn our attention to the issues of having Varied Approaches to Investigations Scattered Across the Organization.

The problem is that organizations do not have a standardized methodology to consistently address investigations across the enterprise. Today’s typical organization struggles with manual, scattered, and ad hoc investigation processes.

Unfortunately, many organizations implementing GRC strategies have seen investigations as a disconnected component and not core to GRC. Organizations often lack consistency, collaboration, and accountability when it comes to managing investigations. They have multiple investigation processes that do not work introducing redundancy and inefficiency.

When investigations are scattered across the organization the organization lacks 360-degree transparency into the negative events impacting the business. No one can see the breadth and depth of issues the organization has. As a result, investigations:

• Suffer from complete lack of universal insight: There is no single authoritative source where investigations are consolidated, maintained, monitored and managed consistently.
• Bound by disparate methodologies: With redundant investigation processes, the organization has not fully embraced a common methodology to consistently manage investigations while allowing for unique subject matter experts to be involved in areas of their specialty.
• Lack enterprise accountability: There is no enterprise assurance into the consistency of investigations and resolution of issues with limited structures of accountability into understanding who took what action, what is being done to prevent future issues, who is responsible for the impact and loss, is there a trend of similar incidents and issues historically, and is the issue documented correctly.
• Deficient lifecycle management: Organizations maintain an ad hoc approach to managing investigations with varied approaches that introduce redundancy and inefficiencies when there is no common system for managing workflow, tasks, documentation, approval, accountability, and escalation processes.
• Fail to integrate with policy systems: Investigations are violations of policy, when the organization has no integration into policy systems and lifecycle management it is handicapped to improve policies to prevent future violations.
• Disengaged from risk management: Investigation processes that are external to risk management processes are unable to provide necessary historical loss information to adequately identify, measure, and manage risk.
• Encumbered by improper technology: Processes are burdened by technology such as spreadsheets and homegrown databases used to document and manage investigations. This approach lacks sufficient audit trails that identify who did what, took what action, and entered notes – providing assurance that they were not modified at a later time to structure a different story or get someone out of trouble.

The organization suffers with ineffective investigation structures, content, coordination, lifecycle management, accessibility, accountability, and communication when this critical GRC process is trapped in silos. There is no 360-degree transparency into the status and impact of all investigations across the enterprise.

How can an organization manage and model risk and compliance without a clear understanding of where issues and events have been in the past? The issues of the past are a critical source of risk intelligence, providing a necessary indicator of where the organization’s future risks lie. Corporate governance, strategic decision-making, and the protection of stakeholder value require an organization to understand where its issues and losses have been.

When the organization is under a microscope, having a detailed document trail of investigations – how they were managed, who was involved, who was implicated, and what actions were taken – provide grounds for defending the organization. Organizations require collaboration and accountability across investigation teams for their ongoing involvement in investigations, the investigation process, evidence management, monitoring incidents, corrective actions, and loss reporting.

Investigations have many names, in parts of the organization they may be called issues, loss, matters, events, cases, and incidents.  I now turn our attention to a series of posts/newsletters on the topic of effectively managing corporate investigations.

Investigations, done right, minimize or control loss, uncover systemic issues, identify risk areas, and provide information that drive continuous improvement initiatives. As a result, investigations are a critical cornerstone to governance, risk management, and compliance (GRC) efforts in the ability to find and resolve issues to reduce exposure and contain loss to the organization.

GRC activities require that an organization have a solid approach to manage investigations and feed information into other GRC related processes. Consider that. . .

• Investigations are a GOVERNANCE activity: Most organizations do not connect investigations with how they maintain corporate culture and policy boundaries by holding parties accountable to policies and procedures. Without a consistent investigation process culture morphs and takes unintended paths.
• Investigations influence RISK models: Investigations inform risk management processes where the most significant risks have materialized in the past and drive evaluation and remediation priorities. Loss information gathered from investigations is a critical element of risk modeling.
• Investigations are a critical component of COMPLIANCE: Investigations enforce compliance through identification of areas that need improvement and increased monitoring. This includes policy and procedure revision, improved communications, changes to training programs, and enhancements to monitoring activities. Further, investigations are considered a fundamental element of a corporate compliance program (e.g., USSC Organizational Sentencing Guidelines).

Through a consistent investigation process the organization identifies damages, involved parties, evidence of policy violations, impacts, remedies, and maintains boundaries for acceptable behavior of business processes, relationships, systems, and individuals.

The right investigation process is necessary to define and communicate that the organization is serious about its policies, culture, and control and to facilitate enhancements that prevent reoccurrence of similar issues.

Stay tuned – more will be coming on the critical topic of effectively managing investigations.  In the meantime, I would love to hear your thoughts on Investigation Management and corresponding organizations strategies.  Please feel free to comment below . . .

 

This question was recently posted to the Corporate Integrity LinkedIN Group. The specifics are as follows:

We are looking for a list of all regulations that we need to comply with. I know that OCEG is putting together a database of this information for members, but I am wondering if there are other sources that people are aware of? It seems as though I’ve seen this built into some GRC software and I’d expect law firms and the “big 4” to have something. Have any of you encountered a list and if so can it be shared?

My response was:

There are some good sources for specific areas. The Unified Compliance Framework has a good listing of IT and Privacy related regulations.

I have been working on compiling some lists for clients – and a good list crossing a lot of areas easily grows into the 1,000s.

 

No matter if you use the term or not – GRC (Governance, Risk Management, & Compliance) is a reality.  We are in 2011 and it has been ten years now since I first started using the term GRC in research and interactions with organizations.

The truth of the matter is – GRC as an acronym is approximately 10 years old, but GRC as part of business is as old as business itself.  Organizations are governed and approach compliance and risk management in some form.  The question before them:

• Are they doing it in a way that makes sense?
• Are they doing it to achieve business agility, effectiveness, and efficiency?

Whether you use the acronym GRC or not does not matter to me – the truth is you are doing GRC in some form or fashion. As we enter 2011 it is time for me to put on the pundit hat and give you my gripes from 2010 and directions for GRC in 2011.

2010 Gripes

It is best to get gripes out of the way first – that way I can get them off my chest and not be weighed down as I discuss directions.  Interestingly, my gripes are mainly focused on technology vendors – I am sure I can find a burr or two under my saddle in other areas, but today I am focused on venting my frustration with GRC technology vendors:

• Ignorance. Yes, vendors often frustrate me – some are great others need a lot of help.  What frustrates me is when vendors ignorantly communicate GRC as being about technology – technology is the enabler for GRC to achieve agility, efficiency, and effectiveness. GRC itself is broader than technology and should align with process and strategy.

• Generic messages. Ignorant vendors have a generic message.  I am tired of seeing vendors come into buyer situations telling them they have the best and most adaptable solution out there – it slices, it dices, it does your laundry.  Good night – GRC is about solving problems, generic answers do not cut it.  Most sales people from vendors completely miss the boat; they cannot put themselves in the shoes of the buyer.  I remember one situation in which a buyer was addressing a Corporate Integrity Agreement (CIA) – several vendors that came into the deal never even read the CIA, which was publicly available and referenced in the RFP.

• Blowing Up Deals. My biggest issue is the fact that the primary GRC vendors are focused on large enterprise deals.  They are pressured to close the big deal – often looking for 7 figures. Vendors come into a situation and are trying to fix organizational political issues/silos that the organization is not ready to address.  I have seen more GRC opportunities trashed or postponed because vendors insist on making the deal bigger than what the organization is ready for today.

2011 Directions

2011 will be an interesting year for GRC strategies, processes, and technology.  I pull out my crystal ball and give you the following predictions:

• Standardized GRC process and definitions. Much of the problem about GRC is a lack of standardized guidance.  As my friend Norman Marks has commented, you can go to a conference and hear a dozen or more definitions of GRC.  This is changing as the OCEG GRC Capability Model has grown in popularity and adoption.  Dell is one company to be among the first to seek process certification for their anti-corruption processes against the GRC Capability Model.

• GRC professional certification. OCEG also is poised to roll out the GRC Professional Certification in the next month.  This is an encouraging process to get more individuals trained and supporting a common GRC framework.  The last two GRC Process, Strategy, and Technology Bootcamps delivered the early version of the test and enabled attendees to be among the first to get the certification.

• Year of corporate compliance. A lot of attention has been given to SOX, audit, and IT risk and compliance.  2011 is the year that the most significant growth will be in the corporate compliance department.  This is a department that has been burdened by manual and ad hoc processes for years and is now becoming aware of how technology, particularly integrated with content, can streamline operations.  Issues such as the UK Bribery Act and other regulatory/enforcement actions continue to drive this role as well as compliance evolving into a champion of values and ethics and not just the corporate cop.

• Performance and ERM. Back to a gripe that I forgot above – ERM.  I continue to be frustrated with many ERM programs that are nothing more than an expanded view of financial controls (an evolution of SOX initiatives).  I see growing interest in ERM being driven by the board down and one focused and integrated into strategy and performance.  BTW – many vendor offerings are inadequate for true ERM as they simply are a replacement for spreadsheets and have very basic models for representing risk.

• Risk & compliance in the extended enterprise. Extended business relationships — those involving the supply chain, value chain, vendors, service providers, outsourcers, and contractors — require the same vigilance in mitigating risks and staying in compliance, as do internal enterprise activities.  Third-party risk management and compliance obligations have steadily increased over the past decade, coming either directly from statutes and regulations or indirectly.  Whether imposed by statute or from a business partner, managing such risk across the constellation of business relationships requires an approach that is effective, repeatable, and defensible.

• Risk & regulatory intelligence. A sound GRC strategy is not just built on technology but also content.  More and more solutions are differentiating themselves by offering packaged content of policies, procedures, risk libraries, assessments and controls.  Leading solutions also integrate with knowledge/content services to keep the organization apprised of relevant risk and compliance developments around the world that impact their business.

• Effective policy management. I am seeing increased interest in developing consistent policies and procedures within organizations and manage them within a well-defined life cycle.  Policies and procedures are a cornerstone of a solid GRC strategy that in the past has often been neglected.  Organizations are finding increased exposure to liability for ineffective policies that are out of date, confusing, and not understood.

• Fixing problems. There are some organizations executing large enterprise-wide GRC strategies that focus on collaboration across GRC roles.  However, this represents only 10 to 20% of GRC deals.  Most GRC deals are focused on fixing specific problems that bear down on the organization.  Organizations want to leverage processes and technologies for other areas – but immediately they want to solve the problem before them.  This will continue over the next several years as organizations remain reactive and only a few focus on strategic proactive GRC initiatives.

• Expansion and consolidation. The market for GRC technology will continue to expand as more vendors enter the market which will be complemented by further consolidation as larger vendors continue supplementing their GRC offerings through acquisition of smaller vendors.  We will also see smaller vendors pull together to broaden their offerings and compete against the larger vendors.

• Mid-market focus. Mu
  ch of the GRC focus has been on the Global 1000 – attention is now moving to encompass the mid-market companies into.  These companies, as I started this discussion, have GRC strategies whether they call it or not – but are looking to improve their business efficiency, effectiveness, and agility for GRC.  This starts with solving immediate pressing problems and expanding to other areas with consistent processes and technology.

• David and Goliath. The small vendor tends to be more agile, ready to adapt to customer needs, and quick to implement bleeding edge technologies.  While the Goliath’s have entered their challenge and have pulled in smaller vendors to bolster their offering – it is the smaller vendors that tend to have the most intriguing cutting edge offerings that continue to expand how GRC can be managed within an organization.

• Prices come down. Regarding vendors, it is time for prices to come down.  Many GRC technology opportunities are shut down because the primary vendors are looking for very large deals.  I might not be very popular with this – but prices have to come down for GRC technology to achieve broader adoption.  This will be done as a variety of new and existing vendors are poised to offer very feature rich solutions at lower price points – particularly to compete against the large IT companies in the space.

These are my collective thoughts – I could write volumes on this and more.  In 2010 I had personal interactions (e.g., engagements, interviews) with over 100 different organizations implementing GRC strategies to address various problems across industries.  This does not count the scores of interactions with vendors and professional service firms.  Those subscribing to my newsletter and blog have grown to over 7,000.  The Corporate Integrity LinkedIN Group has grown to over 2,300.   It has been a good year – and I expect it to be an even greater year in 2011!

Happy New Year!  May 2011 bring your organization commitment to sound values, ethics, and practices in light of Principled Performance supported by a sound GRC strategy, process, and technology architecture! Please feel free to comment and share your thoughts and experiences on the GRC market . . .

The core elements of a regulatory intelligence process can be delivered in a GRC software platform. The solution will allow the compliance and legal functions to profile regulations, link regulatory content aggregators, and have new developments or alerts pushed into the application and disseminated to the appropriate subject-matter expert for review and analysis.

Technology tailored to this process empowers legal and compliance personnel to manage and monitor regulatory change on a continuous basis. A flexible regulatory intelligence process-management system allows the organization to standardize and automate its regulatory requirements and monitor regulatory change. It also offers the ability to manage the collection, analysis, and action on information that flows within and across business units in an organization. Core capabilities in a GRC technology platform for regulatory intelligence include:

• Content integration: At a basic level, the system should allow for simple manual entry of new changes and updates so they can be routed to the correct individual. In an advanced implementation, the software will be integrated with feeds from legal and regulatory content aggregators and pushed to the correct individual or group automatically. Additionally, organizations need the ability to search for laws, statutes, regulations, case rulings, analysis, news, and related information that could indicate regulatory risks that need to be monitored proactively.

• Workflow and task management: The primary goal of regulatory intelligence is to provide accountability. This requires that regulatory change information is routed to the right person to take action. That individual should be notified that there is something to evaluate and given a deadline based on an initial criticality ranking. The subject-matter expert must be able to re-route the task if it was improperly assigned or forward it to others for review for additional opinions. Individuals and group contributors must have visibility into their assignments and time frames.

• Document management: The system should be able to catalog and version regulations, policies and other related information. It should maintain a full history of how the organization addressed the area in the past, with the ability to draft new policies and assessments for approval before implementation.

• Ease of use: Legal and regulatory experts are not typically technical experts. The platform managing regulatory intelligence has to be easy to use and should support and enforce the business process. Tasks and relevant information presented to the user should be relevant to their specific role and assignments.

• Audit trail: It is critical that the regulatory intelligence system have a full audit trail to see who was assigned what, what they did, what was noted and if notes were updated, and be able to track what was changed. This enables the organization to provide full accountability and insight into who, how and when regulations were reviewed, measure the impact on the organization, and record what actions were recommended or taken.

• Extensive reporting capabilities: The system must provide full reporting and dashboarding capabilities to see how many regulations are changed, who is assigned what tasks, which items are overdue, what the most significant regulatory changes impacting the organization are, and more.

• Flexibility and configuration: No two organizations are identical in their processes, applicable regulations, structure, and responsibilities. The information collected may vary from organization to organization as well as the process, workflow, and tasks. The system must be fully configurable and flexible to model the specific organization’s regulatory intelligence process.