Governance, risk and compliance (GRC): Definitions and resources

GRC, short for governance, risk and compliance, is a system that can make or break modern corporations. Organizations with effective GRC tools synchronize their risk management and regulatory compliance processes; organizations without them may struggle with board effectiveness and overall corporate performance.

Entities across industries can benefit from a well-planned GRC strategy. GRC can help you align performance activities to business goals, manage enterprise risk and meet compliance regulations, all of which are make-or-break functions for corporations today.

In this article, we’ll answer the following questions:

• What is GRC?
• Why does your organization need GRC?
• What does a strong GRC strategy look like?
• What does a weak GRC strategy look like?
• How do you implement GRC?
• How can the right tools, including AI, help your GRC strategy?

What is GRC? Governance, risk and compliance explained

GRC stands for governance, risk and compliance.

GRC definition: GRC is a system that organizations use to structure governance, risk management, and regulatory compliance. The concept is to unify an organization’s approach to risk management and regulatory compliance. Strengthening and rationalizing these processes can help improve business performance and enhance decision-making within corporate governance boards.

The OCEG coined the term GRC and formally defined it in 2007 as “the integrated collection of capabilities that enable an organization to reliably achieve objectives, address uncertainty and act with integrity.” Despite growing recession fears and trade upheavals, two-thirds of U.S. companies’ general counsel and corporate directors say they’re still prioritizing growth. As GRC transforms through AI, it will become essential in mitigating potential financial and economic crises as organizations plan for the future.

Understanding GRC’s three main components

Before diving into what makes a GRC strategy effective, we’ll define and explain each component — governance, risk and compliance — individually.

1) Governance

Governance ensures that all organizational activities (IT operations, training, etc.) align to support and advance the organization’s overall goals and objectives. Governance typically involves the organization’s key decision-makers, such as board members or high-level executives. It defines and enforces activities like:

• Board composition
• Corporate disclosure
• Executive compensation

Governance affects how executives gather data, make strategic decisions, communicate with key stakeholders and determine who joins the board. An example of poor governance in an organization might be a group of executives engaging in insider trading or a director whose business decisions and strategies consistently reflect a lack of interest in environmental, social or legal guidelines.

Effective governance uses data, information, and hard evidence to develop strategies and make decisions. Key sources include:

• Internal audits
• Assurance reports
• Compliance monitoring results
• Risk assessments
• Robust governance helps keep the organization on track and aligned with defined objectives.

2) Risk management and GRC security

Risk management involves identifying, assessing and controlling threats and risks to the organization. These threats could be financial pitfalls, legal consequences, cybersecurity threats, commercial liabilities, management errors, natural disasters, and other accidents.

Risk management processes typically rely on internal audits and risk assessments to identify critical gaps and areas of significant uncertainty. Risks can arise internally, within essential business operations and processes, or externally, out on the broader market.

Organizations often assign various risk management elements to individuals, including IT security leaders, business analysts, finance officers and the governance board. A robust GRC framework can help ensure that all risk management activities align with the organization’s ultimate goals and objectives.

3) What is GRC compliance?

GRC compliance involves aligning organizational activities with the laws and regulations that impact them. These regulations could be legal mandates, like privacy or environmental laws, or voluntarily established company policies and procedures.

For example, a compliance officer at a software company might work to ensure that their systems abide by regulations like GDPR. In contrast, an environmental inspector might search a construction site for environmental code violations and take the necessary steps to address them.‌

GRC frameworks encourage organizations to centralize compliance monitoring and stay on top of any laws or regulations that could affect their processes. Breaking compliance could result in devastating financial, legal and reputational consequences. These could include fines, time and money spent in court, and a tarnished reputation.

Why is GRC important?

GRC is important because it offers a holistic view of risk that streamlines decision-making regarding issues that aren’t always unified. From regulatory changes to stakeholder demands, boards are under pressure to manage interrelated priorities that can be difficult to align.

GRC is one of the best tools boards have to integrate GRC functions and ensure that all operations align with strategic objectives while adhering to legal and regulatory requirements. Yet, in a 2023 survey of those who either manage or oversee their organization’s risk and compliance strategy, only 53% said their programs were mature, making effective adoption of GRC tools and strategies imperative.

What are the benefits of GRC?

The benefits of GRC are far-reaching and extend beyond the GRC team. Organizations that implement sound GRC practices can foster:

1. Improved decision-making: The unified view of risks and compliance GRC provides enables leaders to make strategic decisions rooted in an accurate view of the risks the organization may face.
2. Enhanced risk management: Organizations with mature GRC programs hone their ability to identify and address potential threats early. Doing so can reduce vulnerabilities and prevent costly incidents.
3. Regulatory compliance: A structured GRC framework (see common frameworks below) helps organizations stay current with evolving laws and regulations, avoiding fines and reputational damage.
4. Operational efficiency: GRC tools benefit organizations by integrating all risk processes in a single platform, eliminating redundancies, streamlining workflows and reducing administrative overhead.
5. Stronger reputation and trust: Demonstrating a commitment to ethical practices and compliance builds trust with customers, investors and regulators.
6. Agility and resilience: GRC benefits organizations, particularly those with mature systems, by enabling them to better adapt to changes, recover from disruptions and maintain continuity.

What does a weak GRC strategy look like?

Unfortunately, a suboptimal approach to GRC can cause many issues. A weak strategy is typically founded on a host of disjointed activities and poor processes, including:

• Unclear objectives
• Lack of effective oversight
• Lack of access to crucial information
• Organizational and functional silos
• High costs
• High rates of duplication
• Wasted resources, data and information
• Unnecessary complexity

The downsides of a poorly planned GRC strategy

When organizations haphazardly create departments and arbitrary programs instead of implementing GRC best practices, they can expect to face drawbacks like:

• Lack of visibility into key threats and risks to the organization
• Higher costs
• Difficulty measuring risk-adjusted performance
• Reduced ability or total inability to manage third-party risks

When GRC activities are siloed and relegated to specialized departments and programs, substandard strategies are more likely to be chosen, activities are duplicated, and day-to-day business operations are slowed considerably.

It’s also helpful to note that doing GRC “wrong” is common. As organizations expand, keeping track of all the people and processes involved becomes more challenging. As the business grows, the severity and frequency of governance, risk and compliance issues also increase.

It’s natural to want to silo GRC activities and relegate them to a specialized department instead of building a strategy to incorporate them throughout your organization seamlessly. However, for your plan to be more scalable, sustainable and cost-effective, focusing on the latter approach is more likely to give you the results you’re looking for.

As the business grows, the severity and frequency of governance, risk and compliance issues also grow. It’s important to implement scalable GRC frameworks and processes that can flex to meet the organization’s needs so growth doesn’t come at the cost of regulatory compliance and ethical standards.

Organizations should perform risk assessments when considering wider business aims and objectives. Risk assessments identify potential issues throughout the business operation. Some of the more serious risks include:

• Financial risks
• Cybersecurity threats
• Commercial liabilities

These risks can impact teams differently throughout the organization. Teams most affected by the issues above include:

• Business analysts
• Finance officers
• IT security executives
• The governance board

A GRC framework ensures these different teams work towards the same objectives.

Why does your organization need governance, risk and compliance?

Organizations face a rapidly changing and increasingly complex business climate. Whether you’re part of a large corporation, government agency, small business or nonprofit, you’ll face numerous challenges, including:

• Constant changes to regulations and enforcement that severely impact business operations
• Stakeholder demand for strong performance outcomes, consistent growth and transparent processes
• Growing costs of addressing compliance requirements and managing risk
• Increase in third-party relationships and associated governance challenges
• Potential legal and financial consequences resulting from a lack of effective oversight and overlooking critical threats

‌A disorganized approach to GRC can slow down an organization and cost more, all while achieving less, missing requisite compliance requirements and misidentifying threats to your revenue or reputation.

Too often, organizations believe that buying a single GRC platform or forming a specialized department will help resolve all of their GRC-related concerns. However, a robust GRC strategy is more than a specific tool or set of roles. A practical implementation involves:

• Defining the right objectives for your organization
• Ensuring smooth communication and that the right information always reaches the right people at the right time
• Establishing and enforcing the right set of actions and controls to address risk and compliance needs

GRC breakdowns aren’t a thing of the past. Recently, regulators uncovered that employees at one of the largest banks in the U.S. attempted to meet sales targets by opening millions of unauthorized accounts and credit cards for customers. Opening accounts without consent was unethical and exposed the bank to significant legal and regulatory action.

While employees may have opened the accounts, the bank created an aggressive culture where short-term profits reigned over ethical conduct. Corporations today are under scrutiny from regulators, shareholders, and the public to uphold ethical values. This intensifies the need for GRC practices prioritizing long-term performance and detecting risks before they escalate.

Advantages of well-planned GRC management and strategy

Focusing on the above can help you prioritize your needs and select the right array of tools and processes that support your goals without slowing down or overcomplicating day-to-day operations.

Organizations that can implement a cohesive, integrated set of processes and technologies can expect the following:

• Reduced costs
• Reduced duplication of business activities
• Faster, easier access to information
• Higher quality and accuracy of information and communications
• Greater ability to consistently repeat key processes

The standard components of a strong GRC strategy include, but are not limited to:

• Effective oversight
• Integrated reporting and analytics
• Organization-wide ethics and integrity requirements
• Integrated information, risk and control activities
• Unified vocabulary across departments and disciplines
• Standardized practices for core processes like hiring, training, investments, evaluation, etc.‌

Many organizations approach GRC management by constructing overly complex and specialized programs in risk management, performance management, compliance, internal auditing and corporate social responsibility. The danger in this is creating too many disconnected silos that slow down communication, limit access to critical information and duplicate activities due to a lack of transparency and knowledge across the organization.

The best GRC strategy may be invisible. The goal is for your selected tools, technologies, and processes to become “baked into” the fabric of your organization so that any GRC standards and practices become a natural part of doing business.

What are some popular GRC frameworks, and why are they used?

A governance, risk and compliance framework is a structured approach to implementing GRC processes. A practical framework offers a systematic way to identify, assess, prioritize, and mitigate risks, ensuring that business operations follow a consistent set of ethical and security standards and comply with laws and regulations.

While a GRC framework can stand on its own, organizations can also integrate it with other risk management standards to broaden their risk management strategy, including:

COSO framework

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework is a reputable ERM framework that businesses across industries use to create a more holistic view of risk. Integrating COSO principles into a GRC model helps corporations layer accepted risk management best practices over their governance and compliance objectives.

Organizations use this framework to help design, implement and maintain effective internal controls and risk management practices that make it easier to achieve business objectives and reduce fraud risk.

NIST framework

The National Institute of Standards and Technology (NIST) Cybersecurity Framework is a repeatable process for managing and improving cybersecurity. Within GRC, it offers a structure for identifying, responding to and recovering from cybersecurity threats — a must, given that cyber-attacks spiked in 2023.

Organizations can leverage the NIST best practices across five core functions: identify, protect, detect, respond and recover. Within each function, it provides guidelines and best practices that risk leaders and teams can use to build and refine their cybersecurity programs.

ISO 31000 framework

The International Organization for Standardization (ISO) offers guidance on various business needs, including information security and risk management. The ISO 31000 standards specifically complement GRC by offering documented approaches organizations can leverage to improve risk management and compliance.

Organizations can use this framework to encourage the integration of risk management into their culture and decision-making processes, driving greater risk awareness.

ISO/IEC 27001 (Information Security Management System - ISMS)

Also part of the ISO, this is a globally recognized standard for establishing, implementing, maintaining and improving an information security management system. It helps organizations protect information and assets and ensure confidentiality, integrity and availability.

Risk leaders may use this framework to structure risk assessments based on their environment, ultimately protecting sensitive information.

ISACA framework

ISACA is a global professional association that develops frameworks for IT governance and risk management, including the Control Objectives for Information and Related Technologies (COBIT). These frameworks can guide how an organization’s GRC model aligns IT governance practices with their overall objectives and regulatory landscape.

IT auditors and managers can use the COBIT framework to define control objectives, processes and metrics for IT governance — and use those objectives to measure IT performance and risk across the organization’s systems. This framework is ideal for aligning IT and business needs.

OECG GRC capability model

The OECG GRC capability model is a comprehensive framework offering a unified approach to organizational management across risk, governance, audit, ethics, IT and compliance. Organizations can use the capability model to enhance any of the above frameworks as their sole methodology for developing and improving GRC practices.

Developed from a study of nearly 300 large corporations, the model offers GRC best practices organized into four components:

• Learn: This component involves building a deep understanding across the organization of GRC concepts, regulations and practices, including through education and training.
• Align: Organizations should build upon what they have learned by aligning GRC activities and strategic objectives and developing clear governance structures.
• Perform: The third component of the model, “perform,” means executing GRC processes and activities to begin proactively managing risk, monitoring performance and maintaining compliance through audits, internal controls and more.
• Evaluate: Organizations must continuously assess the effectiveness of their GRC efforts through monitoring and measurement, which requires establishing performance metrics.

While these components are steps organizations can take toward a robust GRC strategy, they are also a formula for modern GRC software. For example, technology like the Diligent One Platform integrates a learn/align/perform/evaluate approach to offer organizations powerful, immediate and actionable insight into GRC entity-wide.

Discover the exact steps to build your own governance framework >

GRC team roles and responsibilities

A GRC team is a coordinated group of employees who oversee and implement the GRC program. These could be employees dedicated exclusively to GRC activities or stakeholders from other departments and business units who advise on their work's GRC implications.

A typical GRC team structure will include the following roles:

• Chief risk officer (CRO): The CRO oversees enterprise risk management strategy and ensures the risk approach aligns with business goals. Although they may not be involved in the day-to-day execution, they will set the vision and select a framework.
• Chief compliance officer (CCO): A counterpart to the CRO, the CCO focuses on compliance efforts, regulatory changes and internal policies. Other compliance team members will report to them as the ultimate authority on the compliance component of GRC.
• Internal auditor(s): Depending on the organization’s size, this could be a single employee or an entire team. Either way, the auditor evaluates the effectiveness of internal controls, risk management practices and compliance procedures.
• GRC analyst/specialist: This team member or members will support data collection, risk assessments and reporting, often managing GRC software platforms.
• Legal counsel: Though legal counsel has myriad responsibilities, they’ll be brought into the GRC team to advise on legal risks, regulatory requirements and compliance implications.
• IT security officer: This team member focuses exclusively on cybersecurity risks. They will execute data protection policies and ensure they meet compliance standards. IT security officers often support other departments across the organization in adhering to the principles as well.
• Business unit leaders: While business unit leaders don’t often serve on the GRC team, they are responsible for aligning department-level practices with enterprise risk and compliance objectives. The GRC team will provide these leaders with training and documentation that they must pass on to their team.

GRC implementation roadmap

GRC is a destination, not a journey. The best GRC strategies will evolve over time, ahead of the risks they intend to identify, manage and mitigate. Putting that program in place requires robust structures and a commitment to embedding risk awareness within everyday business practices.

Here’s how.

How do you implement a GRC framework in an organization?

Implementing a GRC framework involves aligning governance, risk management and compliance processes with organizational goals and embedding them into your organization. The process typically starts with understanding the organization’s risk landscape, regulatory requirements and current controls, then selecting a suitable framework or combination of frameworks that fit the organization’s size, industry and maturity level.

Successful implementation of GRC requires securing executive buy-in and fostering collaboration between key teams: IT, legal, compliance, risk management and business units. Implementation should be viewed as an ongoing journey rather than a one-time project, with continuous monitoring, training and improvement built into the process.

What are the key GRC implementation steps?

There are six key steps to take when implementing GRC:

1. Assess current state and define objectives: Evaluate your existing GRC practices. Are there any gaps? Which risks exist, and which may arise? Consider also your regulatory landscape. Answering these questions can help you define clear goals and scope for GRC implementation that aligns with your broader business strategy.
2. Select an appropriate framework(s): Review the above GRC frameworks and choose one or more that fit your organization’s unique needs. Tailor the frameworks as needed to your industry, size and complexity.
3. Develop policies, procedures and controls: Establish or update policies and procedures based on the selected framework. Then, leverage those policies to design internal controls that help mitigate identified risks and ensure compliance.
4. Implement tools and technologies: With policies in place, deploy GRC software to automate key activities. This can include automating risk assessments, compliance tracking, reporting and incident management. Integrate existing IT systems where possible to centralize your view of risk.
5. Train and engage key stakeholders: Educate employees, management and relevant third parties about GRC policies and their roles. Promoting a risk-aware culture is critical to an effective GRC program because stakeholders need to uphold it but may not understand it. Ongoing communication and training can help bring everyone on board.
6. Monitor, review and improve: Continuously monitor risks, controls and compliance status. Doing so requires regular audits and assessments to identify new risks or gaps. Leverage the findings to refine policies, controls and processes.

What are some common challenges in GRC implementation?

Reaching GRC maturity isn’t often smooth sailing. But knowing the hurdles you may face can help you overcome them. Some common challenges in GRC implementation include:

• Lack of executive support: GRC initiatives often struggle to secure resources and organizational focus without strong leadership buy-in.
• Siloed departments and poor communication: Disconnected teams can lead to fragmented risk management and compliance efforts. Collaboration not only boosts risk awareness but also makes it easier to mitigate them.
• Complex regulatory environment: Maintaining consistently changing regulations can overwhelm teams and systems, especially in highly regulated industries like finance or healthcare. The more regulations change, the harder it can be to stay abreast of them.
• Insufficient training and awareness: Employees unaware of their role in GRC may inadvertently create risks or compliance gaps, such as leaving a public computer logged in or giving a vendor more system access than they truly need.
• Technology integration issues: Implementing GRC tools that don’t integrate with existing systems can cause inefficiencies. Risk teams may duplicate efforts or make mistakes without integrations, compromising the organization’s view of risk.

5 tips when implementing GRC

Implementing a GRC model can seem complex, as it generally includes internal auditing of existing processes and procedures. Each established area of the organization will likely have its own way of performing risk assessments or compliance monitoring. However, a unified approach with shared expertise is the best way to achieve the organization's overall aims.

With this in mind, there are ways to make launching the GRC program more straightforward. Here are five tips for implementing a GRC framework in an organization.

1. The discovery phase is important

Spending time taking stock of existing processes is vital if the GRC program is to be a success. Organizations should perform an internal audit of the processes and procedures used by the risk assessment and compliance teams.

Approaches in departments and teams’ fields will differ, but the aim is to establish similarities and shared processes. The results of the internal audit will help shape the direction of the whole GRC project.

It’s also important to define all relevant regulations, contracts, laws, and legislation the organization may need to comply with. For example, organizations that process cardholder data will likely need to be compliant with the Payment Card Industry Data Security Standard. Once highlighted, the scale and scope of the GRC program can be decided.

2. Senior management should be fully onboard

The benefits of a unified GRC approach should be clear to any members of senior management. After all, it means better access to reports, analytics, and evidence, which help shape strategic decisions. Plus, improved risk management processes mean those strategic decisions are well-informed in the first place.

Senior management should provide a clear idea of the organization’s overall aims and strategy, which in turn will set the tone of the GRC project. If the board can decide on a unified GRC strategy, it will be easier to embed the project in the wider organization.

3. GRC tools can streamline the process

GRC tools such as compliance software or reliable board management software will help streamline the project. GRC software will provide one area to record all the different risk assessments and internal audits. In addition, it can help with compliance monitoring. This centralized data can then be accessed and visualized remotely for instant access to trends and records.

The GRC software will also help trace processes and procedures used within different teams or roles. By centralizing processes and software within one platform, organizations can explore the trends found within different silos.

4. Make improved business performance a core project aim

Assessing existing processes and procedures should answer the question: Can it be improved? The main aim of a GRC program is to drive improvements to risk assessment and compliance monitoring. Both aspects are integral to the ongoing success of an organization.

Risk management directly informs decisions on the organization’s growth or the improvement of services and products. A project to unify GRC programs should aim to improve risk assessment and management processes. This can be through efficiency savings by sharing resources across teams and departments or refining processes. The overall performance of the business should improve as a result.

5. Define objectives and keep communication channels open

Circling back to the goals of your GRC initiative is critical. There should be regular communication and clarity with all of the organization’s members about the objectives. GRC, by its very nature, is far-reaching and comprehensive, as the process will review the breadth of an organization.

Launching a new GRC system will require training and engagement campaigns, so project communication is important. Questionnaires, surveys and interviews are useful for gaining insight into different processes across teams and departments. Plus, any changes in the process will need to be announced and managed.

This is particularly true if the organization introduces a new tool or piece of software to deliver the GRC system. Any changes in technology will require an element of engagement or training.

How do you assess an organization’s GRC maturity?

Assessing GRC maturity helps organizations understand where they stand in the governance, risk and compliance journey and what steps they need to take to improve. A maturity assessment evaluates the extent to which GRC activities are integrated, proactive and aligned with business objectives.

A typical GRC assessment will take a closer look at maturity across governance, risk management, compliance, technology and culture. Depending on how an organization rates across those areas, it can rank itself on a scale like the following:

To conduct the assessment:

• Interview stakeholders across functions such as risk, compliance, IT, operations, legal and HR.
• Review documentation and systems, including policies, controls, training logs and audit results.
• Score each domain (governance, risk and compliance) using pre-defined criteria.
• Create a maturity profile that highlights strengths, weaknesses and areas for growth.

What are the roles and responsibilities within a GRC program?

Clear roles and responsibilities can propel a more effective GRC program where everyone works together, not against each other. Several stakeholders play distinct yet equally essential roles, including:

• Executive leadership and the board: Leaders in executive positions and the board set the tone at the top. It’s up to them to define organizational risk appetite and strategic priorities, as well as oversee GRC strategy and performance. While they don’t execute risk management activities, they do allocate adequate resources and support and monitor potential ethical and compliance issues.
• CRO and risk management team: These stakeholders lead risk management. With the board’s guidance, they identify, assess and prioritize risks across the organization. In doing so, they’ll develop risk mitigation strategies and frameworks, regularly assess their efforts, report to the board and promote a risk-aware culture.
• Chief compliance officer (CCO): The CCO and their team are responsible for driving regulatory compliance and ethical behavior. They are the go-to resource for interpreting and applying relevant laws, regulations and policies to the organization’s GRC program. Additionally, they’ll monitor compliance across departments, conduct training and awareness programs and investigate and report violations or breaches.
• Internal audit: All other stakeholders look to the internal audit for independent assurance of the program’s efficacy. Audit is often called on to audit GRC processes, issue recommendations for improvement and report any and all findings to senior management and the board.
• IT and security teams: Managing technology-related risks and data protection falls to IT teams. They implement cybersecurity measures and IT governance controls that align with the organization’s GRC framework and business goals. IT and security teams must also be aware of and support compliance with data protection regulations like GDPR and HIPAA.
• Legal counsel: Whether a General Counsel or a larger legal team, these stakeholders interpret legal obligations and manage legal risks. They may advise on regulatory, contractual and ethical matters, including reviewing and supporting policy development. This includes assisting in regulatory interactions like investigations and disclosures.
• Business unit leaders: Department directors and managers work with employees to integrate GRC into their day-to-day. Beyond managing operational risks, they guide their department to comply with relevant policies and communicate those expectations to team members, ultimately serving as a liaison between employees and risk leaders.

GRC challenges and solutions across industries and regions

GRC doesn’t look the same from region to region or organization to organization. An organization’s specific risk management needs may vary based on its structure, regulatory landscape and jurisdiction. Here, we look closer at GRC in the real world — and how GRC solutions help.

Finance and banking

A U.S. financial services company recently completed its eighth acquisition. While the acquisitions had gone smoothly, the board saw a need for a GRC tool for banks that would reduce the risk associated with them. Its internal audit, risk and compliance teams were using basic tools like Excel and individually investing in other GRC platforms, leading to siloes that added unnecessary risk.

The CRO sought a single solution for several use cases: ERM, compliance, policy management, internal audit and SOX. Adopting Diligent ERM gave the company an integrated view of risk across the organization, complete with a more advanced, risk-based approach to controls testing. It also busted silos by introducing enhanced workflows that engaged teams across departments and provided visibility to the board.

Manufacturing

A large biotech manufacturer recently went through a Federal Corruption Practices Act (FCPA) enforcement action that resulted in a $50 million settlement. Because of that, the organization learned of extensive quality issues within the reports from its existing third-party management software vendor:

• The investigative reports were not meeting the organization’s standards
• Ongoing adverse media screening from the vendor delivered excessive false positives

The manufacturer also laid off compliance team members due to COVID-19, making it difficult to keep up with all facets of compliance. It centralized these GRC processes and more into one system, allowing for greater visibility and efficiency. Data intelligence tools, managed services, and stronger investigative reports powered by over 300 highly trained global analysts gave the manufacturer the data and support it needed to improve its compliance program.

Healthcare

Australia’s largest nonprofit health, aged care, disability and community service provider helps people from all walks of life across its 460 locations. It needed an enterprise-grade software system to bring all its risk and assurance-related data together, leveraging those insights to drive internal audit and support management to deliver targeted risk and assurance assessments in real time.

To achieve this, the provider would need to connect several major operating systems — SAP, AX9, AX12, D365, three timesheet systems and three clinical government systems — to aggregate all of its data in a single platform. Building out Diligent’s healthcare GRC software enabled them to connect this data easily and then configure the tool for specific teams so they could generate the insights they needed.

Company-wide stakeholders could tap into the platform when needed, driving a better understanding of the business and a more sustainable, value-driving healthcare GRC program.

Technology

A large U.S. technology company needed to consolidate its IT compliance program to meet multiple global certification requirements. However, their current GRC tools were inefficient and outdated. Its data sources were growing but only becoming more disparate rather than connected and managed.

It adopted the Diligent One Platform, introducing a common controls framework with more than 3,000 global certifications. It could implement standardized controls enterprise-wide and align those controls with central policies and practices. These modern systems helped the company meet the demands of ever-changing regulatory requirements and power efficient, strategic decision-making.

AI in GRC

Artificial intelligence (AI) is the double-edged sword of GRC. While AI can expedite much of the work of GRC teams, it also compounds the risks that many organizations already grapple with.

“It is yet another reminder of a potential risk on the horizon. But on the flip side of that, the way artificial intelligence can help our clients evolve how they do governance […] but even more so as we think about the backdrop of risk. AI has the unique opportunity to help so many of us identify, signal and noise [risks] and help make sure they can mitigate those risks,” Diligent CEO & President Brian Stafford said on a recent episode of The Corporate Director Podcast.

However, in many ways, AI can be its own solution — if GRC teams learn how to integrate it effectively into their day-to-day.

Here’s what GRC teams need to know to get started.

How is generative AI changing the governance, risk and compliance landscape?

GRC can often be reactive in that teams identify and fill existing risk management gaps or adapt to how regulations have already evolved. Generate AI is changing that landscape by transforming GRC into a more predictive, proactive capability by accelerating data analysis, enhancing decision-making and streamlining policy creation.

What does this look like in practice? GRC teams can simulate risk scenarios, pinpoint insights from vast datasets and draft compliance documents. Each AI-powered tool catalyzes more modern GRC that gets ahead of risk and compliance concerns rather than waiting for them to unfold.

“I think of AI as being something that can be helpful in making sure that you don’t miss anything, make you better, and hopefully, through that, make so many organizations safer,” said Stafford.

How can AI be used in GRC?

AI can be applied effectively across all pillars of GRC:

• Governance: AI automates board reporting and policy drafting, keeping accurate insights in the board’s hands.
• Risk: AI-powered tools can identify hidden risks through pattern recognition and anomaly detection, so GRC teams can monitor trends easily missed by the human eye.
• Compliance: GRC AI makes it easier to monitor regulatory updates in real time and map them to internal policies. It also helps unify data across silos, providing a single source of truth that enhances accuracy and collaboration.

How can AI help with risk management processes?

AI can significantly enhance risk management by automating and accelerating traditionally laborious and time-intensive tasks prone to human error. Here’s how:

1. Risk identification: AI can process vast amounts of structured and unstructured data to detect risks that traditional methods might miss. Machine learning (ML), for example, identifies patterns and anomalies that signal emerging risks. On the other hand, sentiment analysis can detect reputational risks by listening to social media or other channels.
2. Risk assessment and prioritization: AI models can also score and rank risks based on likelihood, impact and interdependencies — from predictive analytics that forecast potential events using historical and real-time data to scenario modeling that simulates “what-if” situations.
3. Risk mitigation and control automation: AI can help enforce controls and reduce human error through automation and intelligent decision-making. Smart alerts may send early warnings about control failures or policy violations, while workflow automation can put risk management tasks, like control testing, on autopilot.
4. Monitoring and incident detection: AI enables real-time risk monitoring and early detection. It might flag fraudulent behavior or inconsistencies that indicate a cybersecurity threat. Modern tools can also monitor transactional systems 24/7 for compliance and risk issues.
5. Risk reporting and communication: AI-powered risk dashboards enable faster and more informed decision-making based on accurate data. It can also create narratives for risk dashboards and executive summaries for lengthier reports, surfacing the most salient details for the board to act on.

How can AI help organizations stay ahead of evolving regulations?

AI can significantly accelerate regulatory compliance by keeping GRC teams abreast of any changes in their landscape. Tools like Diligent AI enable you to:

• Instantly compare two versions of the same regulation and organize changes by key categories.
• Map those changes to your existing controls.
• Categorize regulatory updates as “significant,” “moderate,’ and “minor” so you can prioritize compliance efforts easily.
• Trigger automated workflows to update procedures, notify stakeholders or launch an audit.
• Forecast potential changes and emerging compliance risks, empowering you to adapt proactively.

The future of GRC

Like many areas of board oversight, the future of GRC is cyber. But what will that look like in practice, particularly for highly regulated industries?

Cyber GRC is North American financial institutions' second-largest planned spending in 2025. Improving risk oversight formality at the board level is also a top priority for 57% of financial institution risk leaders. That means that boards of the future need some degree of cyber domain expertise, greater enterprise risk visibility and improved cyber risk quantification. 

As technology reaches a tipping point, regulatory demands intensify, and stakeholder expectations grow, organizations must rethink their approach to GRC.

GRC trends for 2025

Looking ahead to 2025, the future of GRC will likely be shaped by:

1. AI-powered GRC: AI has already revolutionized GRC operations and will likely be a linchpin in organizational strategies to keep up with cyber and other fast-evolving risks. “Companies are focused on the early win: increasing productivity and efficiency,” said Chief Executive Group Head of Research Melanie Nolen on a recent episode of The Corporate Director Podcast. Tools like predictive analytics, AI-powered monitoring and workflow automation will increase GRC speed, accuracy and scalability, all while reducing the cost of compliance.
2. Integration of ESG into GRC: ESG risks are becoming a central pillar of GRC. Companies are aligning ESG risks with broader ERM frameworks at the same time that regulators are pushing for more uniform disclosures, putting ESG reporting in the spotlight. Stakeholders will also continue to expect organizations to demonstrate ethical governance and sustainability, not just profitability.
3. Risk-resilient culture and workforce: The human side of GRC is also gaining attention. More companies are investing in GRC training, leadership accountability and ethical decision-making. This transformation has brought with it an emphasis on risk-aware cultures that empower employees to take ownership of GRC practices and report any issues they find. As GRC understanding spreads across organizations, it will become a strategic competency, not just a compliance function.
4. Cyber and third-party risk top of mind: Digital transformation has made cybersecurity and third-party risk dominant GRC concerns. “Cybersecurity remains a major risk. [Boards] are looking into it at every meeting, bringing the right people into the meetings to help them in their discussions. Nobody is letting down their guard,” said Nolen. Organizations are adopting more rigorous due diligence and continuous risk monitoring for vendors and partners. Many GRC frameworks also encompass supply chain vulnerabilities, ransomware threats and data privacy risks. AI will only increase the focus on data governance as bad actors adopt and leverage new, smarter tools.
5. Agile and real-time GRC: Agility is critical in an era of rapid change. “The level of disruption has become the norm. It’s to be expected now. The 10, 15-year strategic plan, there’s just no such thing anymore,” said Nolen. Continuous and dynamic risk management will likely replace annual risk assessments, which are too infrequent to paint a meaningful risk picture. Scenario modeling, real-time alerts and flexible policies will all allow faster adaptation to change, whether market shifts, crises or regulatory updates.

Choosing the right governance risk compliance (GRC) software

Selecting the right GRC software is a critical decision that will impact your organization’s ability to manage risk, meet regulatory requirements and align with strategic goals. While software isn’t always one-size-fits-all, the ideal platform should not only streamline compliance but also support a proactive approach to GRC.

Diligent One platform helps you keep track of everything and stay ahead of the curve

After you have clearly defined organizational objectives, established an effective communications strategy and enforced the best controls for your organization, the right tools and technology can help you stay on top of your GRC activities.

The Diligent One platform can help you get a consolidated view of risk across the organization to help your board make more strategic decisions. Boards and GRC teams can access the platform anytime, anywhere, and on almost any device.

This unified solution allows organizations to:

• Tap into an exclusive, proprietary data feed with insights into a range of GRC issues
• Integrate data from 100+ leading providers
• Make decisions grounded in accurate data and seamless collaboration
• Strategically align audits to your highest priority risks
• Illuminate mission-critical risks and identify how to mitigate them
• Uncover opportunities before the competition becomes aware of them
• Develop a credible, defensible compliance program in less time with automated risk management
• Improve the efficacy of your internal controls by adopting continuous automation
• Put business processes, analyses, remediation and reporting on autopilot
• Turn to a single source of truth for managing all governance, risk and compliance activities

Interested in learning more? Learn more about how a centralized governance solution can accelerate your GRC strategy.

FAQ

What is GRC in simple words?

GRC, in simple terms, refers to the integrated approach of managing governance, risk, and compliance within an organization to achieve its objectives effectively.

What does GRC stand for in risk management?

GRC stands for governance, risk and compliance. In risk management, GRC is a framework that helps organizations align their risk strategies with business goals, establish governance policies and ensure compliance with regulatory requirements. GRC enables a proactive and integrated approach to identifying, assessing, mitigating and monitoring risk across the enterprise.

What does GRC stand for in cybersecurity?

In cybersecurity, GRC stands for governance, risk and compliance and refers to the structured approach organizations use to manage cyber risk. GRC in cybersecurity helps enforce security policies, ensure regulatory compliance (like GDPR or HIPAA) and align IT security efforts with business objectives. It supports continuous monitoring, threat assessment, and response planning.

What is the direct connection between cybersecurity and GRC?

Cybersecurity and GRC are deeply interconnected. GRC provides the strategic framework that guides cybersecurity practices, helping organizations manage security risks, implement controls and demonstrate compliance. Cyber threats are a key risk category, and GRC ensures these risks are identified, prioritized and addressed through governance structures, security policies, and regulatory oversight.

What is the relationship between GRC and ESG?

GRC and ESG are increasingly integrated. ESG introduces new risk and compliance dimensions — such as climate risk, ethical sourcing and social impact — that GRC frameworks must now address. A modern GRC program supports ESG by providing oversight, risk assessment, reporting and accountability mechanisms.

What are the fundamentals of governance, risk and compliance?

The fundamentals of governance involve establishing structures and processes for decision-making and accountability. Risk management entails identifying, assessing, and mitigating potential threats to the organization’s objectives. Compliance ensures adherence to relevant laws, regulations, and standards.

How to integrate GRC into your program management lifecycle

To integrate GRC into your program management lifecycle:

1. Embed governance early by aligning project objectives with policies and risk tolerance.
2. Use risk assessments during planning and execution to identify potential threats.
3. Incorporate compliance checkpoints into milestones and reviews.
4. Monitor and report risks throughout the project lifecycle using GRC tools.
5. Conduct post-implementation audits to ensure lessons learned feed back into future governance.

Integrating GRC ensures that your programs remain compliant, resilient, and aligned with strategic goals.

What is GRC software?

GRC software is a technological solution designed to streamline and automate an organization’s governance, risk management, and compliance processes. It helps centralize data, track activities, and facilitate reporting to ensure adherence to regulatory requirements and internal policies. Request a demo to learn more about how the full Diligent One Platform can support you.

What are GRC tools?

GRC tools encompass a range of software applications, platforms, and methodologies used to support governance, risk management, and compliance activities. These tools may include risk assessment software, policy management systems, compliance tracking tools, and audit management platforms.

What is the difference between GRC software and a GRC platform?

GRC software refers to any tool that supports specific GRC functions, such as compliance tracking or risk reporting. A GRC platform, on the other hand, is a comprehensive, integrated solution that unifies multiple GRC modules — like risk management, compliance, policy, audit and third-party risk — into a centralized system. GRC platforms offer broader visibility and automation across the organization. Reach out to our sales representative today to learn more.

Is GRC cybersecurity?

While GRC encompasses various aspects of cybersecurity, it is not solely focused on cybersecurity. Instead, GRC provides a broader framework for managing risks across all areas of an organization, including cybersecurity. Effective GRC practices incorporate cybersecurity measures to protect against threats and ensure compliance with relevant regulations.

Which GRC software offers the best security questionnaire automation?

Several GRC platforms offer strong security questionnaire automation, but the right platform depends on your organization’s needs. Look for platforms that automate vendor risk assessments, streamline third-party security questionnaires and provide AI-powered workflows for faster reviews and responses. Features like template libraries, response reuse and integration with procurement tools can also strengthen security questionnaires. Discover how you can integrate AI with confidence to your GRC operations.

Is it possible to create a risk program in days rather than months?

Yes, with the right tools and frameworks, it’s possible to set up a basic risk program in days instead of months. Cloud-based GRC platforms like Diligent AI Risk Essentials can get you up and running in a week with minimal IT lift. Its prebuilt templates, three-step workflows and board-ready reporting accelerate deployment. While more complex risk strategies may require time, a functional, compliant and scalable program can be launched rapidly using this modern GRC technology.