In modern times, the world of business is not limited to just offering products and services in return for money. It encompasses paying heed to stakeholders’ expectations, clear communication, protecting the business from severe fluctuations, and keeping abreast of all laws that apply to it. Factors related to GRC (Governance, Risk, and Compliance) have moved from being in the periphery to being in the center stage of activities that are crucial to businesses. As the topic suggests, GRC needs have become three pillars of business.
To execute the GRC needs, it is important to recognize the interdependence of the three. The understanding of internal and external risks and the regulatory environment not only leads to effective risk management, it also fosters compliance. This happens because if there is a regulation that helps protect a business or an industry, it is in their interest to comply with the regulation.
Once risks to a business function are defined, it can lead to process supervisors taking ownership of that risk, which in turn leads to accountability. The more clearly defined accountability, the higher the chances of better compliance and more effective risk management. A compliant organization with efficient risk management automatically becomes transparent in its functioning. This transparency results in good governance. All the three pillars also help integrate the organization better as there is a single goal that all departments need to aim for instead of working in silos and looking out for their interest.
The converse is also true. When a business is not concerned about risk management, it does not see much need for compliance. If there is little regulation to evoke compliance, businesses remain opaque and this opaqueness hinders governance.
It is important to note, though, that as important as these three pillars are, they are not easy to manage. But the advancement in technology can make the life of risk and compliance managers and internal auditors easier than before.
The Boston Financial Advisory Group (BFAG) has leveraged the expertise of Risk, Compliance, and Accountancy professionals to develop COMPLIANCE INBOX (CiB) – a tool that can help the aforementioned Managers and Auditors efficiently manage their GRC needs. The product covers all major laws and regulations that can apply to businesses, is highly customizable to their needs, and has a built-in alert and tracking mechanisms to ensure compliance.
Process owners can use the tool to delegate tasks to subordinates and keep a track of compliance reporting. The tool is also highly scalable and can meet the demands of both a mature and a growing business. Given the importance of the three pillars, CiB can be a useful tool for companies to implement.
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