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Third Party Risk: Gaining Certainty in Global Relationships

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One of the greatest governance, risk management and compliance challenges before organizations is managing the web of third party business relationships.

Brick and mortar business is a thing of the past: physical buildings and conventional employees no longer define an organization. The modern organization is an interconnected mess of relationships and interactions that span traditional business boundaries. Over half of the organization’s ‘insiders’ are no longer traditional employees. Insiders now include suppliers, vendors, outsourcers, service providers, contractors, subcontractors, consultants, temporary workers, agents, brokers, dealers, intermediaries, and more. Complexity grows as these interconnected relationships, processes, and systems nest themselves in layers of subcontracting and suppliers.

In this context, organizations struggle to adequately govern risk in third party business relationships. These risks span areas such as:

  • Anti-bribery & corruption
  • Anti-money laundering
  • Code of conduct
  • Conflict minerals
  • Corporate social responsibility
  • Environmental management
  • Health & safety management
  • Human trafficking
  • Import/export compliance
  • Information security
  • Know your customer
  • Labor standards
  • Privacy and data protection
  • Quality management
  • Regulatory requirements
  • Responsible sourcing
  • Sustainability

GRC 20/20 is answering inquiry questions every week from organizations struggling with third party management challenges. We are seeing a range of hot issues such as the UK Modern Slavery Act, US Conflict Minerals, EU Conflict Minerals, EU REACH, OCC Requirements in Banking, PCI DSS, California Transparency in Supply Chains Act, HIPAA, GDPR, and more. Though third party management goes beyond regulations to also achieve corporate social responsibility and alignment of business partner values to the organization’s code of conduct. I have sat on the social accountability advisory board of a major brand guiding them on process and technology areas of child labor, forced labor, working hours, health and safety, and more for tens of thousands of facilities across their supply chain. This challenge and issue is significant for organizations and the burdens are only growing.

Third party problems are the organization’s problems that directly impact brand, reputation, compliance, strategy, and risk to the organization. Risk and compliance challenges do not stop at traditional organizational boundaries as organizations bear the responsibility of the actions or inactions of their extended third party relationships. An organization can face reputational and economic disaster by establishing or maintaining the wrong business relationships, or by allowing good business relationships to sour because of poor governance and risk management.  When questions of business practice, ethics, safety, quality, human rights, corruption, security, and the environment arise, the organization is held accountable, and it must ensure that third parties behave appropriately.

Inevitable Failure of Silos of Third Party Governance

Governing third party relationships, particularly in context of risk and compliance, is like the hydra in mythology: organizations combat each head, only to find more heads springing up to threaten them. Departments are reacting to third party management in silos and the organization fails to actively implement a coordinated strategy to third party management from an enterprise perspective.

  • The challenge: Can you attest to the governance, risk management, and compliance or third parties across your organization’s business relationships?
  • Reality: Organizations manage third parties differently across different departments and functions with manual approaches involving thousands of documents, spreadsheets, and emails. Worse, they focus their efforts at the formation of a third party relationship during the on-boarding process and fail to govern risk and compliance throughout the lifecycle of the relationship.

This fragmented approach to third party governance brings the organization to inevitable failure. Reactive, document-centric, and manual processes cost too much and fail to actively govern, manage risk, and assure compliance throughout the lifecycle of third party relationships. Silos leave the organization blind to the intricate exposure of risk and compliance that do not get aggregated and evaluated in context of the organization’s goals, objectives, and performance expectations in the relationship.

Failure in third party management happens when organizations have:

  • Growing risk and regulatory concerns with inadequate resources. Organizations are facing a barrage of growing regulatory requirements and expanding geo-political risks around the world. Many of these target third party relationships specifically, while others require compliance without specifically addressing the context of third parties. Organizations are, in turn, encumbered with inadequate resources to monitor risk and regulations impacting third party relationships and often react to similar requirements without collaborating with other departments which increases redundancy and inefficiency.
  • Interconnected third party risks that are not visible. The organization’s risk exposure across third party relationships is growing increasingly interconnected. An exposure in one area may seem minor but when factored into other exposures in the same relationship (or others) the result can be significant. Organization often lack an integrated and thorough understanding of the interconnectedness of performance, risk management, and compliance of third parties.
  • Silos of third party oversight. Allowing different departments to go about third party management without coordination, collaboration, consistent processes, information, and approach leads to inefficiency, ineffectiveness, and lack of agility. This is exacerbated when organizations fail to define responsibilities for third party oversight and the organization breeds an anarchy approach to third party management leading to the unfortunate situation of the organization having no end-to-end visibility and governance of third party relationships.
  • Document, spreadsheet, and email centric approaches. When organizations govern third party relationships in a maze of documents, spreadsheets, and emails it is easy for things to get overlooked and buried in mountains of data that is difficult to maintain, aggregate, and report on. There is no single source-of-truth on the relationship and it becomes difficult, if not impossible, to get a comprehensive, accurate, and current-state analysis of a third party. To accomplish this requires a tremendous amount of staff time and resources to consolidate information, analyze, and report on third party information. When things go wrong, audit trails are non-existent or are easily covered up and manipulated as they lack a robust audit trail of who did what, when, how, and why.
  • Scattered and non-integrated technologies. When different parts of the organization use different approaches for on-boarding and managing third parties; the organization can never see the big picture. This leads to a significant amount of redundancy and encumbers the organization when it needs to be agile.
  • Due diligence done haphazardly or only during on-boarding. Risk and compliance issues identified through an initial due diligence process are often only analyzed during the on-boarding process to validate third parties. This approach fails to recognize that additional risk and compliance exposure is incurred over the life of the third party relationship and that due diligence needs to be conducted on a continual basis.
  • Inadequate processes to monitor changing relationships. Organizations are in a constant state of flux. Governing third party relationships is cumbersome in the context of constantly changing regulations, risks, processes, relationships, employees, processes, suppliers, strategy, and more. The organization has to monitor the span of regulatory, geo-political, commodity, economic, and operational risks across the globe in context of its third party relationships. Just as much as the organization itself is changing, each of the organization’s third parties is changing introducing further risk exposure.
  • Third party performance evaluations that neglect risk and compliance. Metrics and measurements of third parties often fail to properly encompass risk and compliance indicators. Too often metrics from service level agreements (SLAs) focus on delivery of products and services by the third party but do not include monitoring of risks, particularly compliance and ethical considerations.

The bottom line: When the organization approaches third party management in scattered silos that do not collaborate with each other, there is no possibility to be intelligent about third party performance, risk management, compliance, and impact on the organization. An ad hoc approach to third party management results in poor visibility across the organization, because there is no framework or architecture for managing third party risk and compliance as an integrated framework. It is time for organizations to step back and define a cross-functional strategy to define and govern risk in third party relationships that is supported and automated with information and technology.

What are your thoughts and concerns on third party management? Please post your comments below. If you have a question on third party management best practices or solutions in the market, please submit an inquiry.

GRC 20/20 is presenting on a webinar on this specific topic later this week . . .

Third Party Risk: Gaining Certainty Amid a Web of Global Relationships

April 6 @ 10:00 am – 11:00 am CDT

[button link=”http://grc2020.com/event/third-party-risk-gaining-certainty-amid-a-web-of-global-relationships/”]REGISTER[/button]

Third Party Management Research from GRC 20/20 . . .

GRC 20/20 will be releasing a detailed written Market Landscape: Third Party Management Solutions later in April that includes market definition, segmentation, sizing, forecasting, solutions in the space, drivers, trends and more.

Research Briefings on Third Party Management

Strategy Perspectives on Third Party Management

Solution Perspectives on Third Party Management

Case Studies on Third Party Management

GDPR Compliance Requires a Strategy Supported by Process, Information and Technology

IT GRC Management Solutions, The GRC Pundit BlogPublished onLeave a Comment on GDPR Compliance Requires a Strategy Supported by Process, Information and Technology

As the years go by, there is increasing focus on the protection of personal information around the world. Over time we have seen US HIPAA, US GLBA, Canada’s PIPEDA, the EU Data Protection Directive 95/46/EC, and others around the world. The latest, most comprehensive, and the one that is the front and center of concern to organizations is the EU General Data Protection Regulation 2016/679 (GDPR), which replaces the former directive.

The GDPR strengthens and unifies data protection of individuals in the EU. Where the former directive required each country to pass national legislation that was not consistent, the GDPR is a regulation and not a directive and does not require further national legislation. Full compliance for organizations starts May 25, 2018, and applies to any organization that stores, processes, or transfers the personal data of EU residents. It does not matter if the organization resides in the EU. Fines can be stiff, going above €20 million or 4% of global revenues of an organization, whichever is greater.

The regulation defines personal data as: “Personal data is any information related to an individual, whether it relates to his or her private, professional, or public life. It can be anything from a name, a photo, an email address, bank details, posts on social networking websites, medical information, or a computer’s IP address.”

To be compliant and mitigate the risk of data protection incidents, organizations should . . .

The rest of this blog post can be found as a guest blog at SureCloud:

[button link=”https://www.surecloud.com/blog/gdpr-compliance-requires-strategy-supported-process-information-and-technology”]READ MORE[/button]

Risk Management by Design

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The physicist, Fritjof Capra, made an insightful observation on living organisms and ecosystems that also rings true when applied to risk management:

“The more we study the major problems of our time, the more we come to realize that they cannot be understood in isolation. They are systemic problems, which means that they are interconnected and interdependent.”

Capra’s point is that biological ecosystems are complex and interconnected and require a holistic understanding of the intricacy in interrelationship as an integrated whole rather than a dissociated collection of parts. Change in one segment of an ecosystem has cascading effects and impacts to the entire ecosystem. This is also true in risk management. What further complicates this is the exponential effect of risk on the organization.  Business operates in a world of chaos.  Applying chaos theory to business is like the ‘butterfly effect’ in which the simple flutter of a butterfly’s wings creates tiny changes in the atmosphere that could ultimately impact the development and path of a hurricane. A small event cascades, develops, and influences what ends up being a significant issue. Dissociated data, systems, and processes leaves the organization with fragments of truth that fail to see the big picture of performance, risk, and compliance across the enterprise and how it supports the organization’s strategy and objectives. The organization needs to have holistic visibility and situational awareness into risk relationships across the enterprise. Complexity of business and intricacy and interconnectedness of risk data requires that the organization implement a risk management strategy.

Different Approaches Organizations Take in Managing Risk

The primary directive of a mature risk management program is to deliver effectiveness, efficiency, and agility to the business in managing the breadth of risks in context of organizational performance, objectives, and strategy. This requires a strategy that connects the enterprise, business units, processes, transactions, and information to enable transparency, discipline, and control of the ecosystem of risks across the extended enterprise.

GRC 20/20 has identified three approaches organizations take to manage risk:

  • Anarchy – ad hoc department silos. This is when the organization has different departments doing different yet similar things with little to no collaboration between them. Distributed and siloed risk management initiatives never see the big picture and fail to put risk management in the context of organization strategy, objectives, and performance. The organization is not thinking big picture about how risk management processes can be designed to meet a range of needs. An ad hoc approach to risk management results in poor visibility into the organization’s relationships, as there is no framework for bringing the big picture together; there is no possibility to be intelligent about risk and performance. The organization fails to see the web of risk interconnectedness and its impact on performance and strategy leading to greater exposure than any silo understood on its own.
  • Monarchy – one size fits all. If the anarchy approach does not work then the natural reaction is the complete opposite: centralize everything and get everyone to work from one perspective. However, this has its issues as well. Organizations run the risk of having one department be in charge of risk management that does not fully understand the breadth and scope of risks and risk management needs. The needs of one area may shadow the needs of others. From a technology point of view, it may force many parts of the organization into managing risk with the lowest common denominator and watering down risk management. Further, there is no one-stop shop for everything risk management as there are a variety of pieces to risk management that need to work together.
  • Federated – an integrated and collaborative approach. The federated approach is where most organizations will find the greatest balance in collaborative risk management, governance, and oversight. It allows for some department/business function autonomy where needed but focuses on a common governance model and architecture that the various groups in risk management participate in. A federated approach increases the ability to connect, understand, analyze, and monitor interrelationships and underlying patterns of performance, risk, and compliance across risk relationships as it allows different business functions to be focused on their areas while reporting into a common governance framework and architecture. Different functions participate in risk management with a focus on coordination and collaboration through a common core architecture that integrates and plays well with other systems.

Risk Management Strategic Plan

Designing a federated risk management program starts with defining the risk management strategy. The strategy connects key business functions with a common risk governance framework and policy.  The strategic plan is the foundation that enables risk transparency, discipline, and control of the ecosystem of risk across the enterprise.

The core elements of the risk management strategic plan include:

  • Risk management team. The first piece of the strategic plan is building the cross-organization risk management team (e.g., committee, group). This team needs to work with risk owners to ensure a collaborative and efficient oversight process is in place. The goal of this group is to take the varying parts of the organization that have a vested stake in risk management and get them collaborating and working together on a regular basis. Various roles often involved on the risk management team are: enterprise/operational risk management, compliance, ethics, legal, finance, information technology, security, audit, quality, health & safety, environmental, and business operations. One of the first items to determine is who chairs and leads the risk management team.
  • Risk management charter. With the initial collaboration and interaction of the risk management team in place, the next step in the strategic plan is to formalize this with a risk management charter. The charter defines the key elements of the risk management strategy and gives it executive and board authorization. The charter will contain the mission and vision statement of risk management, the members of the risk management team, and define the overall goals, objectives, resources, and expectations of enterprise risk management. The key goal of the charter is to establish alignment of risk management to business objectives, performance, and strategy. The charter also should detail board oversight responsibilities and reporting on risk management.
  • Risk management policy. The next critical item to establish in the risk management strategic plan is the writing and approval of the risk management policy (and supporting policies and procedures). This sets the initial risk management structure in place by defining categories of risk, associated responsibilities, approvals, assessments, evaluation, audits, and reporting. The policy should require that an inventory of all risks be maintained with appropriate categorizations, approvals, and identification of risks.

This post is an excerpt from GRC 20/20’s latest Strategy Perspective research: Risk Management by Design: A Blueprint for Federated Enterprise Risk Management

  • Have a question about Risk Management Solutions and Strategy? GRC 20/20 offers complimentary inquiry to organizations looking to improve their policy management strategy and identify the right solutions they should be evaluating. Ask us your question . . .
  • Risk Management by Design Workshop. Engage GRC 20/20 to facilitate and teach the Risk Management by Design Workshop in your organization.
  • Looking for Risk Management Solutions? GRC 20/20 has mapped the players in the market and understands their differentiation, strengths, weaknesses, and which ones best fit specific needs. This is supported by GRC 20/20’s RFP support project that includes access to an RFP template with over 500 requirements for risk management solutions.

GRC 20/20’s Risk Management Research includes . . .

Register for the upcoming Research Briefing presentation:

Access the on-demand Research Briefing presentation:

Strategy Perspectives (written best practice research papers):

Solution Perspectives (written evaluations of solutions in the market):

Case Studies (written evaluations of specific strategies and implementations within organizations):

Monitoring and Managing Risk Effectively

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Challenge to Boards, Executives, and Risk Management Professionals

Organizations take risks all the time but fail to monitor and manage risk effectively. Further, risk management is too often seen as a compliance exercies and not truly integrated with decision making and objectives of the organization. A cavalier approach to risk-taking is a result of a poorly defined risk culture. It results in disaster, providing case studies for future generations on how poor risk management leads to the demise of corporations — even those with strong brands.

Gone are the years of simplicity in business operations. Exponential growth and change in risks, regulations, globalization, distributed operations, projects, strategy, processes, competitive velocity, technology, and business data encumbers organizations of all sizes. Keeping this complexity and change in sync is a significant challenge for boards, executives, as well as risk management professionals throughout the business. Particularly when risk management is approached from a compliance or audit anlge and not as an integrated displine of decision making that has a symbiotic relationship on performance. Organizations need to understand how to monitor risk-taking, whether they are taking the right risks, and whether risk is managed effectively.

The modern organization is:

  • Distributed. Even the smallest of organizations can have distributed operations complicated by a web of global supplier, agent, business partner, and client relationships. The traditional brick and mortar business with physical buildings and conventional employees have been replaced with an interconnected mesh of relationships and interactions which define the modern organization.  Complexity grows as these interconnected relationships, processes, and systems nest themselves in intricacy.
  • Dynamic. Organizations are in a constant state of flux as distributed business operations and relationships grow and change. At the same time, the organization is trying to remain competitive with shifting business strategies, technologies, and processes while also keeping pace with change to risk environments around the world. The multiplicity of risk environments that organizations have to monitor span regulatory, geo-political, market, credit, and operational risks. Managing risk and business change on numerous fronts has buried many organizations.
  • Disrupted. The explosion of data in organizations has brought on the era of “Big Data” and with that “Big Risk Data.” Organizations are attempting to manage high volumes of structured and unstructured data across multiple systems, processes, and relationships to see the big picture of performance, risk, and compliance. The velocity, variety, veracity, and volume of risk data is overwhelming – disrupting the organization and slowing it down at a time when it needs to be agile and fast.

Understand the Interrelationship of Risk and Its Impact

Risk management is often misunderstood, misapplied, and misinterpreted as a result of scattered and uncoordinated approaches. Risk is pervasive; there are a variety of departments that manage risk with varying approaches, models, needs, and views on what risk is and how it should be measured and managed. These challenges come at department and process levels, and build as organizations develop operational and enterprise risk management strategies.

For some organizations, risk management is only an expanded view of routine financial controls with the result nothing more than a deeper look into internal controls with some heat maps thrown in, and does not truly provide an enterprise view of risk. Despite this, organizations remain keenly interested in how to improve risk management.

Risk management silos — where distributed business units and processes maintain their own data, spreadsheets, analytics, modeling, frameworks, and assumptions — pose a major challenge. Documents and spreadsheets are not equipped to capture the complex interrelationships that span global operations, business relationships, lines of business, and processes. Individual business areas focus on their view of risk and not the aggregate picture, unable to recognize substantial and preventable losses. When an organization approaches risk in scattered silos that do not collaborate, there is no opportunity to be intelligent about risk as it intersects, compounds, and interrelates to create a larger risk exposure than each silo is independently aware of. A siloed approach fails to deliver insight and context and renders it nearly impossible to make a connection between risk management and decision making, business strategy, objectives, and performance.

It can be bewildering to make sense of risk management and its varying factions across enterprise, operational, project, legal/regulatory, third-party, strategic, insurance, and hazard risks. This makes enterprise and operational risk management a challenge when risk management strategy forces everyone into one flat view of risk to conform and have significant issues in risk normalization and aggregation as they roll-up risk into enterprise risk reporting.

Providing 360° Contextual Awareness of Risk

Managing risk effectively requires multiple inputs and methods of modeling and analyzing risk. This requires information gathering — risk intelligence — so the organization has a full perspective and can make better business decisions. This is an important part of developing a risk analysis framework. Mature risk management is built on a risk management process, information, and technology architecture that can show the relationship between objectives, risks, controls, loss, and events.

In light of this, organizations should consider:

  • Does the organization understand the risk exposure to each individual process/project and how it interrelates with other risks and aggregates in an enterprise perspective or risk?
  • How does the organization know it is taking and managing risk effectively to achieve optimal operational performance and meet strategic objectives?
  • Can the organization accurately gauge the impact risk has on strategy, performance, project, process, department, division, and enterprise levels?
  • Does the organization have the information it needs to quickly respond to and avoid risk exposure, and also to seize risk-based opportunities?
  • Does the organization monitor key risk indicators across critical projects and processes?
  • Is the organization optimally measuring and modeling risk?

Gathering multiple perspectives on risk is critical for producing effective relational diagrams, decision trees, heat maps, and scenarios. This risk intelligence comes from:

  • The external perspective. Monitoring the external environment for geopolitical, environmental, competitive, economic, regulatory, and other risk intelligence sources.
  • The internal perspective. Evaluating the internal environment of objectives, projects, risks, controls, audits, loss, performance and risk indicators, and other internal data points.

The bottom line: Organizations are best served to take a federated approach to risk management that allows different projects, processes, and departments to have their view of risk that can roll into enterprise and operational risk management and reporting that supports business objectives and is integrated with decision making. This is done through a common risk management strategy, process, information, and technology architecture to support overall risk management activities from the process level up through an enterprise view. Organizations need to clearly understand the breadth and depth of their risk management strategy and process requirements and select the right information and technology architecture that is agile and flexible to meet the range of risk management needs today and into tomorrow.

This post is an excerpt from GRC 20/20’s latest Strategy Perspective research: Risk Management by Design: A Blueprint for Federated Enterprise Risk Management

  • Have a question about Risk Management Solutions and Strategy? GRC 20/20 offers complimentary inquiry to organizations looking to improve their policy management strategy and identify the right solutions they should be evaluating. Ask us your question . . .
  • Risk Management by Design Workshop. Engage GRC 20/20 to facilitate and teach the Risk Management by Design Workshop in your organization.
  • Looking for Risk Management Solutions? GRC 20/20 has mapped the players in the market and understands their differentiation, strengths, weaknesses, and which ones best fit specific needs. This is supported by GRC 20/20’s RFP support project that includes access to an RFP template with over 500 requirements for risk management solutions.

GRC 20/20’s Risk Management Research includes . . .

Register for the upcoming Research Briefing presentation:

Access the on-demand Research Briefing presentation:

Strategy Perspectives (written best practice research papers):

Solution Perspectives (written evaluations of solutions in the market):

Case Studies (written evaluations of specific strategies and implementations within organizations):

Benefits of a Policy & Training Management Strategy and Architecture

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The organization requires a policy and training management architecture that is context-driven and adaptable to a dynamic and changing environment. Compared to the ad hoc method in use in most organizations today, a policy and training management architecture enables better performance, less expense, and more flexibility.  Core technology capabilities to consider a policy management program are the ability to:

  • Provide a consistent policy management framework for the entire enterprise instead of each department implementing its own policy management system.
  • Manage the policy lifecycle throughout creation, communication, assessment, monitoring, tracking, maintenance, revision, archiving, and record keeping.
  • Train individuals on what is required of them through links to learning systems, modules, quizzing, and attestation.
  • Provide easy access to policy and communicate policy in the language of the reader, as well as to the differently abled.
  • Gather and track edits and comments to policies as they are developed or revised.
  • Map policies to obligations (e.g., regulatory or contractual requirements), risks, controls, and investigations so there is a holistic view of policies as they relate to other areas of GRC.
  • Provide a robust system of record to track who accessed a policy as well as dates of attestation, certification, and read-and-understood acknowledgments.
  • Provide a user-friendly portal for policies in the environment with workflow, content management, and integration requirements necessary for policy management.
  • Provide a calendar view to see the policies being communicated to various areas of the business, and ensure policy communications do not burden the business with too many tasks in any given month.
  • Provide links to hotlines for reporting policy violations.
  • Publish access to additional resources such as helplines and FAQs.
  • Enable cross-referencing and linking of related and supporting policies and procedures so users can quickly navigate to what they need to understand.
  • Create categories of metadata to store within policies and display documents by category so policies are easily catalogued and accessed.
  • Restrict access and rights to policy documents so (a) readers cannot change them, and (b) sensitive documents are not accessible to those who do not need to see them.
  • Keep a record of all the versions and histories of each policy so the organization can refer to them when there is an incident or issue they must defend themselves against or provide evidence for.
  • Maintain accountable workflows to allow certain people to approve policy documents and move tasks to others with full audit trails.
  • Deliver comprehensive reporting with an extensive depth and breadth of reports.

GRC 20/20’s Final Perspective . . .

Effective policy and training management is about delivering value, integration, and alignment of strategy, process, information, and technology throughout the organization in the context of GRC. Organizations need to deliver an exceptional end-user experience: getting employees involved by providing intuitive interfaces into policies and training that are interactive, engaging, and social. Policy and training solutions need to instruct, inform, and be easy to use at all levels. It engages employees in policies and training without leaving them overwhelmed and confused. It is an integration of policy and training information, processes, and systems to engage employees and agents at all levels of the organization.

  • Getting questions answered. Employees need to be able to ask questions and get them answered. This means that policy and training management processes and architecture should provide contextually relevant information as well as pathways to get questions answered.
  • Provide two-way communication. Employees not only need to be able to ask questions and get them answered, they also come up with ideas and ways to improve policies and training. Perhaps it is an idea on a new initiative related to corporate values, to report a new risk, or make a control more efficient.
  • Sharing information. Getting employees engaged is about sharing information, like the ability to like a training initiative and share it with others in the organization. This allows the organization to see what works and keeps employees engaged. It allows a way for employees to share information they find relevant and interesting. It provides feedback into what does not work.
  • Connecting the dots through collaboration. Often elements of policies and training are done in ways that are not ultimately effective. A common problem is individuals often modify responses based on what they think people want to hear. This cognitive and behavioral bias has an impact on the accuracy of the results.  Policy and training processes and architecture should bypass stakeholder interests by using technology to engage individuals in an environment in which to express true opinion, without fear of consequences. Social and collaborative technologies provide a way for individuals in a workshop to anonymously enter thoughts and opinions to captures unbiased information that builds toward stronger discussions and deeper analysis.

In the end, effective policy and training management is about delivering policy and training that minimizes the perception of getting in the way of business and instead becoming a part of business and the culture of the organization. There is an element to policies that will always be inhibitive, but the right approach overcomes this by delivering engaging user experiences that align with the needs of employees, integrates with organization architecture and systems, and delivers relevant content when needed wherever it is needed.

This post is an excerpt from GRC 20/20’s latest Strategy Perspective research: Policy Management by Design: a Blueprint for Enterprise Policy & Training Management

  • Have a question about Policy & Training Management Solutions and Strategy? GRC 20/20 offers complimentary inquiry to organizations looking to improve their policy management strategy and identify the right solutions they should be evaluating. Ask us your question . . .
  • Policy Management by Design Workshop. Engage GRC 20/20 to facilitate and teach the Policy Management by Design Workshop in your organization.
  • Looking for Policy Management Solutions? GRC 20/20 has mapped the players in the market and understands their differentiation, strengths, weaknesses, and which ones best fit specific needs. This is supported by GRC 20/20’s RFP support project that includes access to an RFP template with over 400 requirements for policy management solutions.

GRC 20/20’s Policy & Training Management Research includes . . .

Register for the upcoming Research Briefing presentation:

Access the on-demand Research Briefing presentation:

Strategy Perspectives (written best practice research papers):

Solution Perspectives (written evaluations of solutions in the market):

Case Studies (written evaluations of specific strategies and implementations within organizations):

Policy Management Information & Technology Architecture

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Policy & Training Management Information Architecture

The policy and training management information architecture supports the process architecture and overall policy and training management strategy. With processes defined and structured in the process architecture, the organization can now get into the specifics of the information architecture needed to support policy and training processes.

The policy and training management information architecture involves the structural design, labeling, use, flow, processing, and reporting of policy and training management information to support policy and training management processes. Categories of policy and training management information that organizations often collect and process include:

  • Master data records. This includes data on individuals and their role and history of interaction and communication with policies and training.
  • Compliance requirements. Listing of compliance/regulatory requirements that are mapped to policies.
  • Policy and training libraries. The indexing and versions of policies and training.
  • SLAs, KPIs, and KRIs. Documentation and monitoring of service level agreements, key performance indicators, and key risk indicators for the policy and training program.
  • Exceptions/exemptions. Documentation of exceptions and exemptions that have been requested, granted, and/or denied.
  • Forms. The design and layout of information needed for specific policies and related processes.
  • Incidents & issues. Record of policy violations and details.

Policy and training management fails when information is scattered, redundant, non-reliable, and managed as a system of parts that do not integrate and work as a collective whole.  Successful policy and training management information architecture will be able to integrate information across the organization. Successful policy and training management requires a robust and adaptable information architecture.  Policies and training come together into a unified employee experience where policies are displayed along with training. Training is more than just playing a video but is interactive, showing employees are behind their desk engaged in the activity and not off to get a coffee. Relevant resources are easily accessible and provided in the same interface without hopping between disconnected systems.

Policy & Training Management Technology Architecture

The policy and training management technology architecture enables and operationalizes the information and process architecture to support the overall policy and training management strategy. The goal of the technology architecture is to operationalize the process and information architecture. The right policy and training management architecture enables the organization to effectively manage policy and training performance across the organization and facilitate the ability to document, communicate, report, and monitor the range of communications, training, documents, tasks, responsibilities, and action plans.

There can and should be a central core technology platform for policy and training management that connects the fabric of the policy and training management processes, information, and other technologies together across the organization. Many organizations see policy and training management initiatives fail when they purchase technology before understanding their process and information architecture and requirements. Organizations have the following technology architecture choices before them:

  • Documents, spreadsheets, and email. Manual spreadsheet and document-centric processes are prone to failure as they bury the organization in mountains of data that is difficult to maintain, aggregate, and report on, consuming valuable resources. The organization ends up spending more time in data management and reconciling as opposed to active policy communication and training.
  • Department specific point solutions. Implementation of a number of point solutions that are deployed and purpose built for department or specific risk and regulatory policy needs. The challenge here is that the organization ends up maintaining a wide array of solutions that do very similar things but for different purposes.  This introduces a lot of redundancy in information gathering and communications that taxes the organization and its employees.
  • Enterprise GRC platforms. Many of the leading enterprise GRC platforms have policy and training management modules.  However, these solutions often have a predominant focus on policy and do not always have complete capabilities in training.
  • Enterprise policy and training management platform. This can be an enterprise implementation of point solution dedicated to policy and training management or an enterprise GRC platform that has the breadth of capabilities needed for policy and training management.  This is a complete solution that addresses the range of policy management as well as training and communication needs with the broadest array of built-in (versus build-out) features to support the breadth of policy and training management processes.

The right policy and training technology architecture choice for an organization often involves integration into ERP/HRMS systems and other GRC and business solutions to facilitate the integration, correlation, and communication of information, analytics, and reporting. Organizations suffer when they take a myopic view of policy and training management technology that fails to connect all the dots and provide context to analytics, performance, objectives, and strategy in the real-time business operates in.

A well-conceived technology architecture for policy and training management can enable a common policy and training framework across multiple entities, or just one entity or department as appropriate. Business requires a policy management platform that is context-driven and adaptable to a dynamic and changing environment. Compared to the ad hoc method in use in most organizations today, an architecture approach to policy management enables better performance, less expense, and more flexibility.  Some of the core capabilities organizations should consider in a policy and training management platform are:

  • Integration. Policy and training management is not a single isolated competency or technology within a company.  Policy and training management often requires information from human resources, vendor management systems and other sources to automatically maintain a single record. These applications must integrate with other systems. It needs to integrate well with other technologies and competencies that already exist in the organization – ERP and GRC.  So the ability to pull and push data through integration is critical.
  • Content, workflow, and task management. Content should be able to be tagged so it can be properly routed to the right subject matter expert to establish workflow and tasks for review and analysis.  Standardized formats for measuring business impact, risk, and compliance.
  • 360° contextual awareness. The organization should have a complete view of what is happening with policies and training metrics and processes. Contextual awareness requires that policy and training management have a central nervous system to capture signals as changing risks and regulations, analysis, and holistic awareness in the context of changing and evolving business environment.
  • Organization management. Policies and training apply to something within the organization, whether it is a business process, a physical asset, an information asset, a business relationship, or the entire organization. The system must model the organization and map policies to where they apply.
  • Accessibility. Policies and related training are only of value if they are accessible. A policy management system must provide a complete system of record any individual can log into and find policies that apply to their role, along with required tasks, attestations, and training they must complete. The system should be available in the official languages recognized by the organization. It should also support the communication needs of the differently abled (e.g., vision impaired, etc.).
  • Training management. Training management includes support for classroom, offsite or vendor training, e-learning programs, recorded presentations, simple document delivery and attestation, registration, and attendance completions. The challenge for companies is integrating learning management systems with policy management systems. This can be done by adopting a policy management solution that provides training management. In this model, the courses, scheduling, attestations, and automatic assignment of policies and training based upon the organization matrix are integrated with workflow, task management, and monitoring. Mature policy management systems automatically reschedule training if a policy is updated and assign additional training if a person is promoted or changes roles. This greatly simplifies administration and maximizes accountability and measurability.
  • Notifications. The most effective means of providing accountability in policy management is through notifications. Notifications are delivered when policy authors receive a new work assignment, when a due date draws near, or when a task is overdue and an escalation notice must be sent to management. If a person, or perhaps a whole business unit, needs to read and attest to a revised policy, reminders and escalation are required. Policy management systems provide configuration capabilities to customize messages, provide links to tasks, consolidate notifications, and help enforce goals, plans, and accountability. Notifications must be able to integrate with the organization’s e-mail system to deliver messages and drive accountability.
  • Audit trail. If it’s not documented, it’s not done. An audit trail should record each who, what, where, and when for every document, assignment, person, and piece of content collected, developed, changed, distributed, archived, surveyed, trained, notified, and read. This ensures that when an incident occurs, an audit takes place, or a regulatory exam or investigation happens, you are prepared with accurate and timely evidence. The level of audit trail required for policy management cannot be maintained with manual processes and ad hoc systems spread across an organization.
  • Intuitive interface design. Policy & training management is using leading concepts in interface design to make user experience of applications simpler, easy to navigate, aesthetically appealing, and minimizing complexity.
  • Socialization and collaboration. Collaboration and socialization is used to conduct risk workshops, understand compliance in the context of business, and get individuals involved in policy and training at all levels of the organization.
  • Gamification. Gamification is used, where appropriate, through interactive content and incentives to drive the culture of GRC into decision-making. Getting employees involved through video, comedy, and games to educate on risk, policy, and compliance. It could be an interactive adventure where employees choose their path when presented with different ethical options in the context of business. Games, puzzles, and illustrations help answer questions, develop skills, and communicate a point. Employees can engage policies and training to gain points, accomplish levels, earn badges, and recognition of skills achieved. Perhaps an employee has gone through all the health and safety training, has read and attested to policies and has taken a quiz to validate understanding. As a result they get a health and safety badge on their corporate profile/avatar. Recognition can be given when people complete assessments, discover and report issues, educate others and champion policies in different ways. This is all linked back to GRC technology to track and promote this activity as well as broader corporate HR and collaboration technologies.
  • Mobility. A lot of employees do not have computers, and some that did are now being issued tablets. Policy and training engagement includes delivery of policies and training on mobile devices. This works particularly well in manufacturing and retail environments where a tablet could be deployed as the policy and training kiosk for employees. Effective policy and training is embracing mobile technology on tablets and other devices to engage employees in their preferred languages and bring policies to all levels of business operations.

This post is an excerpt from GRC 20/20’s latest Strategy Perspective research: Policy Management by Design: a Blueprint for Enterprise Policy & Training Management

Have a question about Policy & Training Management Solutions and Strategy? GRC 20/20 offers complimentary inquiry to organizations looking to improve their policy management strategy and identify the right solutions they should be evaluating. Ask us your question . . .

Engage GRC 20/20 to facilitate and teach the Policy Management by Design Workshop in your organization.

Looking for Policy Management Solutions? GRC 20/20 has mapped the players in the market and understands their differentiation, strengths, weaknesses, and which ones best fit specific needs. This is supported by GRC 20/20’s RFP support project that includes access to an RFP template with over 400 requirements for policy management solutions.

GRC 20/20’s Policy & Training Management Research includes:

Register for the upcoming Research Briefing presentation:

Access the on-demand Research Briefing presentation:

Strategy Perspectives (written best practice research papers):

Solution Perspectives (written evaluations of solutions in the market):

Case Studies (written evaluations of specific strategies and implementations within organizations):

Compliance Automation: The Role of Technology in Today’s Dynamic Organization

Compliance Management Solutions, The GRC Pundit BlogPublished onUpdated onLeave a Comment on Compliance Automation: The Role of Technology in Today’s Dynamic Organization

Compliance is not easy. Organizations across industries have global clients, partners, and business operations. Adding to the complexity of global business, today’s organization is dynamic and constantly changing. The modern organization changes by the minute. The dynamic and global nature of business is particularly challenging to compliance management. As organizations expand operations and business relationships (e.g., vendors, supply chain, consultants and staffing) their risk profile grows exponentially. To stay competitive, organizations need systems to monitor internal risk (e.g., strategy, processes and internal controls) and external risk (e.g., legal, regulatory, competitive, economic, political and geographic environments). What may seem insignificant in one area can have profound impact on others.

Compliance activities managed in silos often lead to the inevitable failure of a compliance program. Reactive, document-centric, siloed information and processes fail to manage compliance, leaving stakeholders blind to the intricate relationships of compliance across the business. Management is not thinking about how compliance processes can provide greater insight. This ad hoc approach results in poor visibility across the organization and its control environment. 

A non-integrated approach to compliance management results in these phenomena, each one feeding off the last:

  • Redundant and inefficient . . .

The rest of this blog post can be found as a guest blog at SureCloud:

[button link=”https://www.surecloud.com/blog/compliance-automation-role-technology-today’s-dy-namic-organization-0″]READ MORE[/button]

GRC 20/20’s Effective Policy Management Process Lifecycle

Policy & Training Management Solutions, The GRC Pundit BlogPublished onUpdated onLeave a Comment on GRC 20/20’s Effective Policy Management Process Lifecycle

The policy and training management strategy and policy is supported and made operational through the policy and training management architecture.  The organization requires complete situational and holistic awareness of policies and related training across operations, processes, employees, and third party relationships to see the big picture of policy and training performance and risk. Distributed, dynamic, and disrupted business requires the organization to take a strategic approach to policy and training management architecture. The architecture defines how organizational processes, information, and technology is structured to make policy and training management effective, efficient, and agile across the organization.

There are three areas of the policy and training management architecture:

  • Policy and training management process lifecycle architecture
  • Policy and training management information architecture
  • Policy and training management technology architecture

It is critical that these architecture areas be initially defined in this order.  It is the process architecture that determines the types of policy and training structures and information needed, gathered, used, and reported.  It is the information architecture combined with process architecture that defines the organizations requirements for the technology architecture.  Too many organizations put the cart before the horse and start with selecting technology for policy and training management first, which then dictates what their process and information architecture will be.  This forces the organization to conform to a technology for policy and training management instead of finding the technology that best fits their process and information needs.

Policy & Training Management Process Architecture

Policy and training management architecture starts with the process architecture.  Processes are used to manage and monitor the ever-changing business, third party relationship, risk, and regulatory environments in context of policy and training programs.

The policy and training management process architecture is the structural design of processes, including their components of inputs, processing, and outputs. This architecture inventories and describes policy and training management processes, each process’s components and interactions, and how processes work together as well as with other enterprise and GRC processes.

The core elements of the process architecture are understood as the organization’s policy management lifecycle. This represents the actual operation and process of the MetaPolicy in action to develop, manage, and maintain policies throughout their effective use. Failure to manage policy lifecycles results in policies that are out-of-date, ineffective, and not aligned to business needs. It also opens the door to liability when an organization is held accountable for a policy that is not appropriate or properly enforced.

The stages evaluated in the Effective Policy Management are:

  • Determine Need for New Policies or Updates. Policy should be created only when necessary, such as to establish the values and ethics of the organization, meet regulatory obligations, and manage potential risk or liability. Without some requirement for or exposure of the organization, there is no need for a policy. Too many policies burden the organization and cannot be complied with. Too few policies introduce significant risk and legal exposure. Organizations need a defined change management process to monitor changes that impact policy across the following areas:
    • Corporate environment. Policies change in response to new strategies, objectives, mergers, and acquisitions. Changes in corporate commitments, contracts, values, ethics, risk appetite, and social responsibility statements also drive policy.
    • Risk environment. Ongoing risk intelligence processes are required to monitor geopolitical, environmental, economic, strategic, relationship, and operational risk.
    • Regulatory environment. New laws, changing regulations, litigation, and court rulings (case law) impact organizations and drive policy changes. Organizations need regulatory change management processes in place to monitor the changing legal and regulatory environment in jurisdictions where business is conducted.
  • Policy development and approval. When an organization identifies a change in the corporate, risk, or regulatory environments and determines a new policy is needed, or an existing policy must be updated, it enters the policy development phase. In this stage, policies are drafted, reviewed, and approved. While the Policy Owner is responsible for managing development and works with the policy author and stakeholders, the policy manager champions this process to make sure the policy conforms to corporate style and template requirements and has referential integrity with the other policies in the Policy Portfolio. The policy steering committee, other governing committee, or a designated executive approve policy changes once they go through the development workflow and review process. The policy development steps include:
    • Policy ownership. Every policy in the organization should be assigned to an individual or business role that owns the policy. The owner ensures that the policy remains accurate, is appropriately communicated, and continues to serve the purpose for which it was established. Even if the policy is applied across the entire organization, such as with a code of conduct, the owner must oversee its implementation and monitoring.
    • Policy writing. Once an owner is established, the next step is to write the policy. All policies across the organization should be written in a consistent style, format, and language while following a defined style guide. Policies must be clear and easily understood. They must articulate who the policy applies to, standards, rules, regulations or laws it intends to address, and what, if any, larger program it is associated with.
    • Policy review and approval. Once the initial draft of the policy is written, the owner sends the draft policy to identified stakeholders for review and approval before publication. This phase is iterative, as the stakeholders may send the policy back with changes before it is approved. Leading practice includes reviews by the organization’s policy management office, legal department, and ethics and compliance committee (for policies mandated by law or regulation).
  • Policy publication and awareness. In this stage, individuals become aware of the new or changed policy by clear articulation of individual responsibility to comply with the policy. This includes:
    • Policy publication. After approval, the policy must be published. This is most effectively done with a centralized policy management and communication platform. Unfortunately, many organizations have scattered systems for publishing policies and procedures. This complicates policy management, as multiple publication methods means more policies will become outdated and scattered across the organization. A best practice is to have a single policy system that allows any individual within the environment to login, see all of the policies that apply to a specific role in the organization, and receive automated notification of a changed or new policy.
    • Policy communication and training. Written policy is necessary, but not good enough on its own. Organizations must actively ensure individuals are aware of and understand the policy and what is required of them — appropriate communication and training should be used to facilitate understanding, such as video, LMS courses, surveys, and testing. It is important that training and other resources are linked to policies and are easily accessible. It is also important to preserve records of each individual’s training completion for critical policies so that they are easily accessible by oversight personnel.
    • Policy attestation. It is necessary for individuals to attest to that they have read, understood, and will adhere to critical policies. Policies such as a code of conduct require specific attestation on a regular basis (e.g., annually). Attestations should be dated and time stamped, preserved with the version of the policy, and easily accessible by oversight personnel.
  • Policy adherence and compliance. In this stage, policies are regularly monitored to ensure compliance and that exceptions are documented and managed. This phase involves:
    • Implement procedures and controls. The MetaPolicy states who is responsible for implementing the appropriate procedures and controls to ensure effective implementation, usually the Policy Owner. The procedures and controls should be written using approved templates and embedded within the business operations and processes.
    • Monitor, test, and assess. Carefully monitor, test, and assess activities to ensure that the policy, procedures, and controls are being enforced, are operating as intended, and the business runs efficiently and smoothly while in compliance. Findings of noncompliance and violations provide metrics for policy review and improvement. Enforcement policy is critical, to define levels of infractions and associated actions.
    • Manage exception requests. While policies must be complied with, there are justifiable business situations in which the organization accepts noncompliance. These exceptions must be documented and managed. An exception may be appropriate for a given time period or until a certain event occurs.
  • Policy metrics and maintenance. Policies should not change frequently, but they should go through periodic review. A best practice is to follow an annual review cycle to make sure policies are still appropriate and do not bring unnecessary exposure or liability upon the organization. Unneeded policies should be retired. The major activities of this stage include:
    • Review, update, or retirement. Every policy should have a regular review cycle (ideally annually). During this review, the Policy Owner and stakeholders assess changes to the internal business and external regulatory and business environments, look at incidents of policy noncompliance and approved exceptions, and consider the continued need for the policy. After this analysis the Policy Owner requests the policy approver(s) to reauthorize the policy as-is for another management cycle, to retire it, or to send it back into the Development and Update stage to revise the policy.
    • Policy archives. Every policy and its associated versions must be archived for reference at a later time. The retention period for superseded versions and retired policies should be managed in accordance with the organization’s document and records-retention policies. When an organization becomes aware of an incident, or a regulator has a question, it is necessary to have a full view of the accountability history of a policy: the owner, who read it, who was trained, and who attested and on what version of the policy at a particular date. This level of detail is necessary to defend the organization in a situation involving a rogue employee, where the organization itself is not culpable.

This post is an excerpt from GRC 20/20’s latest Strategy Perspective research: Policy Management by Design: a Blueprint for Enterprise Policy & Training Management

Have a question about Policy & Training Management Solutions and Strategy? GRC 20/20 offers complimentary inquiry to organizations looking to improve their policy management strategy and identify the right solutions they should be evaluating. Ask us your question . . .

Engage GRC 20/20 to facilitate and teach the Policy Management by Design Workshop in your organization.

Looking for Policy Management Solutions? GRC 20/20 has mapped the players in the market and understands their differentiation, strengths, weaknesses, and which ones best fit specific needs. This is supported by GRC 20/20’s RFP support project that includes access to an RFP template with over 400 requirements for policy management solutions.

GRC 20/20’s Policy & Training Management Research includes:

Register for the upcoming Research Briefing presentation:

Access the on-demand Research Briefing presentation:

Strategy Perspectives (written best practice research papers):

Solution Perspectives (written evaluations of solutions in the market):

Case Studies (written evaluations of specific strategies and implementations within organizations):

Uncontrolled Spreadsheets, Documents, and Emails, Oh My!

The GRC Pundit BlogPublished onUpdated onLeave a Comment on Uncontrolled Spreadsheets, Documents, and Emails, Oh My!

Business is complex. Exponential change in regulations, globalization, distributed operations, processes, competitive velocity, business relationships, and legal matters encumbers organizations of all sizes across industries. Like battling the multi-headed Hydra in Greek mythology, redundant, manual, and document-centric internal control management approaches are ineffective. As the Hydra grows more heads of regulation, legal matters, operational risks, and complexity, scattered silos of documents become overwhelmed and exhausted and start losing the battle. This approach increases inefficiencies and the risk that serious matters go unnoticed. Redundant and inefficient processes lead to overwhelming complexity that slows the business, when the business environment requires greater agility.

Use of end user computing applications (EUC) such as spreadsheets, emails, and other document types has revolutionized how technology creates value for organizations. However, this brings a significant challenge to govern and control information and technology in a distributed and dynamic environment. Organizations are facing increased pressures from regulators and auditors to ensure that they have adequate controls over EUC applications, particularly spreadsheets used in accounting and finance processes. This specifically has caught the attention of the Public Company Accounting Oversight Board (PCAOB) and external auditors. This scrutiny is leading to new SOX failings for companies that previously had no such failings. Enhanced audits are exposing the role of spreadsheets in context of Internal Control over Financial Reporting (ICFR) and the fact that spreadsheets are often open to manual manipulation.

The reasons spreadsheets fail without controls are . . .

The rest of this blog post can be found as a guest blog at ClusterSeven:

[button link=”http://clusterseven.com/uncontrolled-spreadsheets-documents-emails-oh/”]READ MORE[/button]

GRC 20/20 is also presenting a webinar on this topic, The Spreadsheet and SOX: the Never Ending Battle:

[button link=”http://grc2020.com/event/the-spreadsheet-and-sox-the-never-ending-battle/”]REGISTER[/button]

More detail can also be found in GRC 20/20’s latest Strategy Perspective, Gaining Control Over End User Computing: Increased Pressure to Control Spreadsheets and Documents:

[button link=”http://grc2020.com/product/gaining-control-over-end-user-computing-increased-pressure-to-control-spreadsheets-and-documents/”]ACCESS RESEARCH[/button]

 

 

Developing a Policy Management Strategy

Policy & Training Management Solutions, The GRC Pundit BlogPublished onUpdated onLeave a Comment on Developing a Policy Management Strategy

Organizations need a coordinated cross-department strategy for managing policies and training programs across the enterprise.  The goal is to develop a common framework and approach so that policies and training are understood and managed as an integrated whole rather than a dissociated collection of parts.

Policies and training programs that are managed as dissociated documents, data, systems, and processes leave the organization with fragments of truth that fail to see the big picture of policy and training across the enterprise and how it supports the organization’s governance, risk management, and compliance (GRC) responsibilities. The organization needs to have holistic visibility and situational awareness into policy and training across the enterprise. Complexity of business and intricacy and interconnectedness of policies and obligations requires that the organization implement a policy and training management strategy.

Contrasting Policy & Training Management Approaches

The primary directive of a mature policy and training management program is to deliver effectiveness, efficiency, and agility to the business in managing the breadth of GRC.  This requires a strategy that connects the enterprise, business units, processes, transactions, and information to enable transparency, discipline, and control of the ecosystem of policies and training needs across the extended enterprise.

Organizations have three policy & training management strategies to choose from:

  1. Anarchy – ad hoc department silos. This is when you have different departments doing different yet similar things with little to no collaboration between them. Distributed and siloed policy and training initiatives never see the big picture and fail to put policy and training in the context of the rest of the organization. The result: complexity, redundancy, and failure. The organization is not thinking big picture about how policy and training management processes can be designed to meet a range of needs. An ad hoc approach to policy and training management results in poor visibility into the organization’s obligations and values, as there is no framework for managing policies and training consistently. When the organization approaches policies and training in scattered silos that do not collaborate with each other, there is no possibility to be intelligent and align policies and training initiatives to achieve efficiency, effectiveness, and agility.
  2. Monarchy – one size fits all. If the anarchy approach does not work then the natural reaction is the complete opposite: centralize everything and get everyone to work from one platform and framework. However, this has its issues as well. Organizations run the risk of having one department be in charge of policy and training management that does not fully understand the breadth and scope of the needs across departments. The needs of one area may shadow the needs of others. From a technology point of view, it may force many parts of the organization into managing policies and training programs to the lowest common denominator.
  3. Federated – an integrated and collaborative approach. The federated approach is where most organizations will find the greatest balance between common policy and training management. It allows for some level of department/business function autonomy where needed but focuses on a common governance model and architecture that the various groups in policy and training management participate in. A federated approach increases the ability to connect, understand, analyze, and monitor interrelationships and underlying patterns of GRC as it allows different business functions to be focused on their areas while reporting into a common governance framework and architecture. Different functions participate in policy and training management with a focus on coordination and collaboration through a common core architecture that integrates and plays well with other systems.

A federated model for policy and training management provides a central coordination of the policy management lifecycle to ensure consistency in policies across the organization while there is ownership and management of non-enterprise-wide policies in distributed areas across the organization that align with the central governance. The Federated model is the ideal for large global organizations.  It allows for policy and training management to be centrally coordinated, but allows for distributed management and oversight of the policies to address divisional, legal entity, business unit, and regional needs. These entities must adhere to all mandated enterprise-wide policies and will often design their own procedures in a way that makes the policy fit their operations and supports their compliance with the policy. They may create their own policies and procedures relating to their specific operations, which may be imposed based on federal, state, or local laws. These policies and procedures must be written so that they do not conflict with the overall mission and values of the organization. A federated model often has layers of policy governance in which a policy steering committee is established centrally to define the policy process and templates, while “entity” policy committees oversee the governance of policies within their respective areas.

Policy & Training Management Strategic Plan

Designing a federated policy and training management program starts with defining the strategy.  The strategy connects key business functions with a common policy and training governance framework.  The strategic plan is the foundation that enables policy and training transparency, discipline, and control across the ecosystem of the enterprise.

The core elements of the policy and training strategic plan include:

  • Policy & training governance team. Effective policy management and communication requires policy governance and oversight. The first piece of the strategic plan is building the cross-organization policy and training governance team (e.g., committee, group). This team needs to work with policy owners to ensure a collaborative and efficient oversight process is in place. The goal of this group is to take the varying parts of the organization that have vested in policy and training management and get them collaborating and working together on a regular basis.  Various roles involved in the policy and training governance team are: compliance, ethics, legal, human resources, finance, information technology, security, audit, quality, health & safety, and business operations. One of the first items to determine is who chairs and leads the policy and training governance team. This committee provides the structure and connective tissue to coordinate and drive consistent policy management. Its team members represent the best interests and expertise of the different parts of the organization. They leverage the knowledge, charter and authority of the committee to benefit their business areas and the whole organization. A large distributed organization may have layers of policy and training committees for different geographies or business units. If a layered approach is in place, the organization still needs a central policy and training governance committee that the rest roll-up to, to enforce consistency and structure.
  • Policy and training management charter.  With the initial collaboration and interaction of the policy and training management team in place, the next step in the strategic plan is to formalize this with a policy and training management charter.  The charter defines the key elements of the policy and training management strategy and gives it executive and board authorization. The charter will contain the mission and vision statement of policy and training management, the members of the policy and training governance team, and define the overall goals, objectives, resources, and expectations of enterprise policy and training management.  The key goal of the charter is to establish alignment of policy and training management to business objectives, performance, and strategy. The charter also should detail board oversight responsibilities and reporting on policy and training management. The charter should specifically address:
    • An organized policy & training management committee to govern the oversight and guidance of policies, and ensure policy collaboration across the enterprise.
    • An individual assigned to the role of policy & training manager to assure accountability to the standards, style, and process defined by the policy management committee. The policy manager does not write policy, but is the champion of the policy management process; for ensuring the creation and revision of policies conforms to the policy management lifecycle defined by the organization.
    • The authorization and allocation of resources for program management architecture, policy review cycles, executive “tone from the top” on policy governance, extending policy governance to mergers and acquisitions, compliance monitoring and assurance activities, and management reporting and dashboards.
  • Policy management policy (e.g., MetaPolicy, Policy on Policies).  The next critical item to establish in the policy and training management strategic plan is the writing and approval of the organization’s MetaPolicy (or policies on writing policies).  This sets the policy management structure in place.  The policy should require that an inventory of all policies be maintained with appropriate detail and approvals. The MetaPolicy is the foundation on which to build an effective policy and training management program. It defines the critical elements of the organization’s policy management program. The major components of an effective MetaPolicy are:
    • Roles and responsibilities. Key organizational roles, responsibilities, and accountabilities for policy governance and lifecycle and specifically the scope of governance and influence of the meta-policy itself.
    • Scope of MetaPolicy. Scope of what is and is not under remit/scope of the MetaPolicy (e.g., internal facing policies, client facing policies, policies of subsidiaries, and joint ventures).
    • Definition of terms. Definitions of specifically— for a given organization—what a policy is as well as a procedure, standard, and guideline in addition to other applicable governance documents and resources.
    • Format and structure guidance. Common structure and content of a policy with specific reference to what topics are required (e.g., purpose, scope, accountability, and policy statement) and what is optional (definitions of key terms/acronyms/abbreviations, authoritative sources/obligations, and cross-references to other documents) to establish a policy.
    • Policy writing and layout. Writing style for policies and other documents as well as the layout of policy documents.  Also included by reference are policy template(s), which are absolutely critical for driving consistency across policies.
    • Central repository and indexing of policies. Requirements for central repository as the system of record for policies and related governance documents. This repository must be accessible to all of the organization’s employees and contingent workers.
    • Policy approval. Policy governance rules for approving policy creation/update/retirement, general requirements for exception approval, and definition of maintenance and review cycles with appropriate accountability of roles and responsibilities for policy development and maintenance.
    • Policy assurance and compliance monitoring. Assurance methodologies to ensure that compliance with the MetaPolicy is in place, that exceptions to the MetaPolicy are documented and managed appropriately, and violations are identified and remediated.
    • Style guide. Policy writing that is wordy and confusing damages the corporate image and costs time and money. Every organization should have a policy style guide in place to provide clear and consistent policy. This establishes the language, grammar, and format guidance to writing policies.  It expresses how to use active over passive voice, avoid complicated language and “legalese”, how to write for impact and clarity, use common terms, how to approach gender in writing, and even internationalization considerations.
    • Templates. These are standard templates that the organization can utilize to write policies and supporting documents/resources that are already in the standard format and structure conforming to the MetaPolicy.
    • Exception/exemption request. Provides a standard template for documenting an exception/exemption request to a policy or procedure and how to seek approval for the request.

This post is an excerpt from GRC 20/20’s latest Strategy Perspective research: Policy Management by Design: a Blueprint for Enterprise Policy & Training Management

Have a question about Policy & Training Management Solutions and Strategy? GRC 20/20 offers complimentary inquiry to organizations looking to improve their policy management strategy and identify the right solutions they should be evaluating. Ask us your question . . .

Engage GRC 20/20 to facilitate and teach the Policy Management by Design Workshop in your organization.

Looking for Policy Management Solutions? GRC 20/20 has mapped the players in the market and understands their differentiation, strengths, weaknesses, and which ones best fit specific needs. This is supported by GRC 20/20’s RFP support project that includes access to an RFP template with over 400 requirements for policy management solutions.

GRC 20/20’s Policy & Training Management Research includes:

Register for the upcoming Research Briefing presentation:

Access the on-demand Research Briefing presentation:

Strategy Perspectives (written best practice research papers):

Solution Perspectives (written evaluations of solutions in the market):

Case Studies (written evaluations of specific strategies and implementations within organizations):