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How GRC Can Help Your Business Stay Secure
GRC and Cybersecurity: The Essential Partnership
GRC helps you manage your business’s Governance, Risk, and Compliance (GRC) aspects. By bringing visibility and control to your software, GRC also has big implications for cybersecurity.
Let’s unpack this.
What is GRC?
The concept of GRC was introduced in a 2007 peer-reviewed paper from the Open Compliance and Ethics Group (OCEG). The goal of GRC is to provide companies with a framework for managing their technology and policies in the face of uncertainty, to help them ethically and efficiently work toward their goals.
As OCEG notes, the idea of grouping these elements is “nothing new [yet] totally revolutionary.” Governance, risk, and compliance have always been important, especially for large organizations. The digital era changed that, allowing almost anyone to start a company and do business worldwide from the palm of their hand. With global opportunities now available to SMBs, and even solopreneurs, it’s no surprise that GRC emerged as a cohesive model to streamline processes.
Simply put, GRC is comprised of three elements:
- Governance — Set procedures, actions, and policies to accomplish the organization’s objectives
- Risk — Identify and manage the organization’s risks
- Compliance — Ensure the organization meets legal and regulatory requirements
GRC helps you to take a comprehensive and proactive approach to manage your business. By integrating your governance, risk, and compliance solutions, you can reduce data silos, minimize risk, and eliminate reporting redundancies. All while reducing costs and becoming efficient. Does that sound appealing? If so, let’s dive deeper into each element!
Governance — Set procedures, actions, and policies to accomplish the organization’s objectives
To further unpack GRC, let’s start with the parallels between [public sector] governments and [private sector] organizations.
Governments are formed to write — and enforce — rules and regulations. Societies that form those governments believe (at least in theory) they’ve set up said government optimally where all the procedures, actions, and policies help guide the institution in the right direction, accomplishing the organization’s objectives.
While organizations are formed with different and varying objectives in mind, the people that create those organizations believe (at least in theory) the same as societies that form governments — they want to set procedures, actions, and policies to accomplish the organization’s objectives.
Whether you’re a for-profit or non-profit or a big or small business, governance helps set procedures, actions, and policies to accomplish the organization’s objectives.
What does this look like in practice? It varies depending on your mission, industry, and size. Still, it starts with creating a centralized information system and bringing together all relevant stakeholders to discuss how to handle contracts, conflicts, and controls. Basically, you want every internal or external decision to fall under governance controls that have been validated — and will be overseen — by the right people. In other words, when it comes to governance, you want a system where everyone is on the same page (and no one can go rogue), working to meet the organization’s objectives.
Risk — Identify and manage the organization’s deviation from expected outcomes
Risk follows naturally from governance. When presented with a decision, what’s the range of outcomes? If any result could be harmful, the decision contains risk (or a deviation from an expected outcome). So how will you account for that risk? How will you minimize it?
As you establish governance, you should simultaneously factor in risk. When you add a procedure, action, or policy, what risk is associated with it? How will you manage that risk to not adversely affect your organization’s objectives? Think of it as “killing two birds with one stone.”
One way to think about risk is to distinguish between external and internal risks. Although you can’t control a pandemic or the economy, you can account for fluctuations in both. How will your business survive if you only sell in one market and that market crashes? In some ways, managing these external risks is really just about practicing good business.
It works the same way for internal risks. How will your business fair if your data center was successfully hit with a ransomware attack and you only had one data center? How do you handle data privacy? Do you have clear and documented processes for properly vetting new employees or taking on new clients? You'll see risks everywhere once you examine every element of your business. GRC solutions help you understand and minimize them.
Compliance — Ensure the organization meets legal and regulatory requirements
The “C” in GRC stands for compliance, bringing the whole concept full circle. When governments enact rules and regulations, organizations operating in their jurisdiction must follow them. In other words, they must comply with those rules and regulations. If they don’t, they risk noncompliance, which can lead to heavy fines.
For instance, if you operate in the healthcare industry, you should know that HIPAA (Healthcare Insurance Portability and Accountability Act) fines range from $127 to $1,919.173 per violation, costs that can quickly add up in, say, a data breach. Likewise, if you do business in the EU, you should consider whether you’re willing to risk a fine of up to €20 million or 4% of annual global turnover (whichever is higher) for mishandling customer data, as per GDPR, the General Data Protection Regulation.
Regulations can be complex, mainly because they are constantly evolving. HIPAA was formed in 1996, so it’s been amended numerous times throughout the digital era. In contrast, GDPR took effect in 2018 as the world’s most stringent data and security law. It has yet to evolve but trust us, it will. You may find compliance daunting if you’re a solopreneur or run an SMB. But compliance is just following the rules. Compliance can be managed with strategic thinking and awareness of the evolution of regulatory requirements (useful software solutions also help).
GRC and cybersecurity
In the world of digital transformation, cybersecurity is an essential part of GRC. GRC and cybersecurity exist side-by-side because as you establish governance, manage risks, and comply with regulations, you will find cybersecurity measures invariably entering the discussion.
For instance, think about data privacy and data security. Though frequently conflated, they’re not the same. Data privacy allows a person to decide when, how, and to what extent their personal information is shared with others. GDPR and HIPAA are two regulations intended to ensure people have that right. That’s GRC territory.
But that right to data privacy doesn’t exist without the strength of data security. Data security is about the logistics of keeping data (like a person’s personal information) safe from unauthorized access by bad actors. A hospital that fails to update or manage its cybersecurity and exposes its patients’ records in a data breach isn’t exactly offering data privacy. To ensure that safety, you build a security team, deploy zero trust, and enact other strong cybersecurity measures. Once you do, you have the conditions to ensure data privacy.
Ultimately, commitments to GRC and cybersecurity are self-reinforcing. They make the other strong, especially if they’re part of the conversation from the beginning. As you analyze GRC solutions, you should work simultaneously on the cyber element.
At its core, GRC helps provide a blueprint for organizational success in an evolving and interconnected digital world. If well executed, there will be little significant difference between running an orderly, compliant, risk-aware business and a thriving one built on trust and security. Protecting your company and staying on track — that’s what GRC helps you do. Cybersecurity merely allows you to do it better.
Curious about how to make cybersecurity part of your GRC strategy and read more epic articles? Feel free to head over to decodingCyber!
