In the ever-shifting terrain of the business world, where unpredictability, risk, and disruption are the only constants, organizations are pushed to find stability and success in achieving their objectives. It’s a high-stakes game of chess where unseen forces can influence every move. Governance, Risk Management, and Compliance (GRC), done properly, is an integrated capability that guides organizations to reliably achieve objectives, navigate the volatility of uncertainty, and act with integrity.
The Open Compliance and Ethics Group (OCEG) has crafted a definition of GRC that succinctly encapsulates this mission: “GRC is a capability to reliably achieve objectives [governance], address uncertainty [risk management], and act with integrity [compliance].” This definition resonates with ISO 31000’s description of risk management: “Risk is the effect of uncertainty on objectives.”
However, in the past, too often, GRC has been more CRG, or just CR, or just C. Organizations focus on compliance and not what true GRC, as it has been defined for the past 22 years, aims for: a better-run business.
This backdrop sets the stage for what we know as “GRC 6.0: Business Integrated & Aligned GRC”—the enablement of an organization’s capability to absorb shock and drive performance. This approach isn’t just about meeting compliance requirements but embedding the essence of GRC into the very fabric of business processes, thus enabling an organization to dance in rhythm with the dynamic beat of the market.
Business Integrated GRC draws its lineage from GRC 4.0 Agile GRC—characterized by its adaptable low-code/no-code GRC solutions—and the analytical prowess of GRC 5.0 Cognitive GRC, which extends Agile GRC with artificial intelligence. With the dawn of the 6th generation, we are witnessing an era where GRC is no longer an add-on but a core aspect of business strategy and execution.
Consider the analogy of a symphony orchestra I have used before, where each section—strings, brass, woodwinds, and percussion—plays a vital role in a harmonious performance. Strategy, objectives, and performance management form the conductor, orchestrating the overall vision, aligning risks with organizational goals, and monitoring performance while ensuring each plays their part to act with integrity/compliance. This is coordinated across departments but also involves a GRC architecture (GRC 3.) that can have a central platform but integrates and allows best of breed point GRC solutions to provide their deeper value.
The woodwinds—an organization’s subtle yet crucial tones—are akin to Business Process Modeling & Enterprise Architecture, which are critical for understanding the business and, in that context, how the business operates. These are essential components of GRC that enable greater risk agility and resilience. Here, we define and construct the processes, ensuring they are robust yet flexible enough to incorporate risk and controls elegantly.
Business Management Platforms are the strings section, the foundation that allows complex compositions to be executed seamlessly, ensuring that GRC is woven into the notes composing the business’s daily operations, activities, transactions, and relationships. GRC should be baked into business processes and activities.
And what about the percussion—the heartbeat of the orchestra? This represents our Top-Down and Bottom-Up Risk Alignment, ensuring that every beat resonates from the boardroom to the front lines, each thump echoing the organization’s risk profile. This brings rhythm to the organization, like ancient war galleys beating the drum to keep the rowers of the boat synchronized and moving forward.
The automation of business controls enhances this into and within business processes, introducing the precise tempo, like a metronome, maintaining the cadence of compliance and integrated controls without missing a beat.
Risk quantification, aggregation, and visualization in the context of the organization’s objectives become the meticulous tuner of the orchestra, ensuring each note played aligns with the key. It offers an objective measure of the impact of risk on performance and objectives.
This enables the organization to achieve greater levels of risk agility and resilience. It’s the organization’s ability to improvise when a surprise solo breaks in or when the composition changes mid-performance. It’s the agility to keep playing, to adjust and adapt, ensuring the music doesn’t stop, and the resilience to recover and bring it all back together.
Finally, engaging the right brain, not just the left brain, not GRC, and particularly risk management means engaging the creative maestro within, calling forth innovation in risk thinking, and weaving the artistic with the analytic to master the performance in the grand theatre of business objectives, strategy, and performance.
As we delve deeper into the 6th generation of GRC, we are not just integrating GRC into the business; we are making it the very essence of how business is conducted, ensuring that with every twist and turn, with every rise and fall, the organization not only survives but thrives, playing its symphony of success amidst the cacophony of the market.
