Ultimate Guide to GRC (Governance, Risk, and Compliance)

Co-ordinating people, processes, and technology while managing risks and staying compliant is easier said than done. Businesses often struggle to keep up with an increasingly fast-paced environment that leaves no room for strategic error. 

Poor processes affect functions across the organization and ultimately affect the bottom line. GRC compliance emerged to fill this gap and reduce inefficiencies.

Wondering what is GRC and how it works? This article helps you learn the basics of Governance risk and compliance – the functions, principles, advantages, and more. If you make it to the end, we will introduce you to the next best thing in compliance.

What is GRC?

GRC (Governance, Risk, and Compliance) is a set of practices and tools that helps organizations implement risk management processes, manage their compliance status, and ensure an effective adherence with governing policies and rules.

The components of GRC

The three components of GRC—governance, Risk, and Compliance—work together to integrate structure, strategy, risks, objectives, operations, and compliance into a comprehensive, cohesive approach to organizational resilience.

Governance: Governance is a set of frameworks, policies, processes, and structure that dictate how an organization is managed and controlled. It’s responsible for direction, decisions, strategic alignment, ethics, and accountability.

Risk: The risk component involves identifying, assessing, and mitigating risks that can disrupt the organization’s ability to achieve its objectives. It helps capitalize on opportunities and minimizes threats and attacks.

Compliance: Compliance ensures adherence to laws, regulations, standards, and corporate/internal policies. It ensures that the organization operates ethically and avoids regulatory fines and penalties.

Why GRC matters in the current business environment?

GRC is more crucial than ever in the current business environment to minimize vulnerabilities and risks, reduce wastage and reactive firefighting, and prove to your partners that the business is well-governed. 

Neglecting GRC in today’s world not only leads to last-minute scrambles during audits, fines, and overlooked risks, but it also means falling behind the competition that’s already using GRC as a strategic growth lever. 

A unified GRC approach is important to ensure the following benefits:

1. Better efficiency

Business operations like risk assessment, auditing, compliance management, and collaboration can get messy without tools like GRC. Using GRC management solutions helps organizations break down silos, efficiently comply, monitor processes, measure goals, and even predict risks. 

2. Risk assessment

One of the central ideas for adopting GRC tools is to rescue risks across the business infrastructure. You can implement, automate, and manage risks to make informed decisions to visualize, manage, and investigate risks. Regulatory audits help to protect sensitive information financial records, trade secrets, and client data.

Companies that have previously encountered a risk-related incident or do not have adequate faith in their current processes can also implement GRC tools. 

3. Operational efficiency

Investing in GRC helps to operationalize processes for resource allocation, addressing conflict of interest, and tracking goals. As risk management and third-party risks become costlier, companies can leverage GRC to strategize their objectives, improve performance, address uncertainty, and boost ROI.  

4. Aligning IT with business goals

Without GRC in the picture, IT works on abstract risks with no knowledge of business impact. GRC bridges that gap between IT and business goals, where IT initiatives are tied to bigger objectives like resilience and compliance, creating a shared view across the organization.

When should a business consider GRC solutions?

Meeting business objectives in a dynamic landscape without breaking the bank has its own complexities. The complexities pile up when you don’t have a system to manage compliance requirements, technology, people, and processes. If you struggle to juggle everything, consider governance, risk management, and compliance to gain a structured approach to streamline deliverables.

When you combine decision-making, automation, collaboration, and risk management in a single framework and have supportive senior executives, the result will be higher productivity at reduced costs and workflow efficiency.Meeting business objectives in a dynamic landscape without breaking the bank has its own set of complexities. When you don’t have a system to manage compliance requirements, technology, people, and processes, the complexities start to pile up. If you are struggling to juggle everything together, consider governance, risk management and compliance to gain a structured approach to streamline deliverables.

When you combine decision-making, automation, collaboration and management of risk in a single framework, and have supportive senior executives, the result will be higher productivity at reduced costs and workflow efficiency.

How does GRC work?

GRC works by bringing policies, commonalities, procedures, and implementation management across the three principle functions, Governance, Risk, and Compliance, within a single fold. This helps with threat minimization, enhanced efficiency and better communication for improved governance.

The key stakeholders involved in GRC:

• Executives and board members: Provide direction, ensure oversight, approve strategies, and oversee performance.
• Risk officers: Identify and learn about existing and emerging risks across security and operations.
• Compliance managers: Ensure compliance management, audit readiness, and a culture of compliance
• IT security teams: Implement technical controls and monitor and handle cybersecurity incidents
• Internal auditors: Identify security gaps, support regulatory and internal policy adherence, and ensure readiness for external audits
• Legal and regulatory advisors: Advise on regulatory requirements and help with documentation
• Other enterprise architects: Design scalable systems to ensure continuous security and compliance.

Here’s how GRC works:

1. Governance: Set the direction

This is the strategic layer. It defines the policies, roles, and responsibilities that shape how the organization should behave. Think leadership mandates, code of conduct, security policies, and accountability structures. GRC aligns governance with business strategy by ensuring decisions support enterprise goals and regulatory standards.

2. Risk Management: Identify and control the unknowns

Here, GRC systems help you spot risks, including security vulnerabilities, operational issues, compliance gaps, and assess their potential impact. Then, you define controls to mitigate those risks. A modern GRC platform continuously monitors these risks and controls in real time, so issues are caught early, not during a post-mortem.

3. Compliance: Stay on the right side of the rules

This is where you align internal practices with external requirements like SOC 2, ISO 27001, GDPR, HIPAA, etc. A GRC system maps controls to specific frameworks, automates evidence collection, and tracks status across teams and systems. The result? You’re always audit-ready, not audit-panicked.

4. Monitoring & Reporting: Keep score, drive action

GRC tools consolidate data from across your organization, including cloud systems, HR platforms, code repos, you name it, and show you where you stand. You get dashboards, alerts, and reports that help security, legal, and executive teams make informed decisions fast.

5. Continuous Improvement: Close the loop

The real value of GRC isn’t in one-time fixes, it’s in constant refinement. A good GRC setup flags control failures, tracks remediation, and evolves as your business, risks, and regulatory requirements change. Unifying governance, risk, and compliance functions ensures no part of the organization is left in the dark.

GRC Implementation Strategy

GRC implementation strategy requires meticulous planning, ongoing commitment to implementation and a cultural change for continuous improvement. Adopt a top-down approach to ensure buy-in from other stakeholders and enable gradual changes.

Here are 5 major steps to follow for developing your GRC implementation strategy:

1. Define objectives and goals

Involve key stakeholders to define the objectives of the GRC model and the goals you’d want the organization to achieve. For every goal, have SMART objectives and key performance indicators. Make sure to tie these goals to applicable regulatory requirements and your business context.

2. Review current practices

Take stock of your existing practices to understand your strengths and weaknesses around GRC practices. Conduct a risk assessment for deeper insights into the gaps and for prioritization of tasks. Appoint a GRC team for policy creation and enforcement based on findings.

3. Policy and procedure development

Create new policies for GRC implementation or update existing ones and define standard operating procedures along with roles and responsibilities. Communicate the changes or updates in policies across the organization and ensure acknowledgement by employees.

4. GRC solutions for implementation

Pick your GRC software for automation and implementation of processes. Start integrating your current tech stack with the tool to streamline tasks and setting up a reporting mechanism. Arrange for workforce training to get the team onboarded and start implementation.

5. Monitoring and improvement

Leverage the reporting dashboards of the GRC tool to gain visibility into GRC processes. Also maintain documentation of these processes and identify opportunities for improvement. This will be done by comparing the measures across KPIs and periodic reviews. Update policies accordingly and enable change management.

How Sprinto can help here: Sprinto can conduct a gap analysis of current compliance practices and implement controls to achieve continuous compliance. It can monitor these controls in real-time and can share live status on health dashboard for proactive improvement actions.

Common Challenges and Pitfalls in GRC

The key challenge in GRC is that it is seen as a disconnected function from core business operations. The lack of integration with other departments makes it difficult for the professionals to make a compelling case and demonstrate their real value.

Let’s look at these challenges:

Teams operating in silos

Most GRC teams including IT, legal, risk and compliance work in silos handling fragmented information requests year-round. There is no unified approach, transparency, or centralized visibility, leading to duplicated efforts and team burnout.

Manual, repetitive processes

It’s hard to believe, but most companies still have GRC operations spread across spreadsheets, email drives, and emails. This approach is error-prone and non-scalable, and increases complexity in the long run.

Reactive firefighting

Instead of continuous risk visibility, teams still rely on periodic assessments and miss critical threats. This leads to reactive measures and chaos during security incidents.

Data overload and poor reporting

Because operations are siloed and scattered, teams face data overload without gaining meaningful insights. No centralized dashboards plus real-time data collection leads to ineffective reporting and uninformed decisions.

Regulatory complexity

Because teams lack a mindset of continuous compliance readiness, they spend more time preparing for regulatory changes than focusing on mission-critical tasks.

Best practices for effective GRC

Here are some GRC best practices most experts swear by:

Centralize controls, evidence, and risks

Focus on building a unified GRC system that brings assets, risks, controls, and audit-ready evidence together so everyone works from a single place of truth. This helps eliminate siloed operations, minimizes duplication, and saves time.

Establish accountability at all levels

Compliance isn’t just an IT problem. Your engineering, HR, legal, and sales teams touch compliance-critical systems. Bring them into the fold early to ensure adoption and create shared accountability at all levels.

Automate what’s repeatable

Most mid-market companies go through multi-phased audits all year round. So the goal must be to stay audit-ready 24/7 and not only during audit cycles. And for that, you need process automation, ongoing control check,s and continuous monitoring mechanisms.

Regularly conduct maturity assessments

It’s important to regularly assess your GRC maturity and identify gaps in governance, risk, and compliance. Review policies, analyze audit logs and reports, and interview stakeholders to understand how far you’ve come and make improvements.

Build for scalability

While you may just be starting with one or two frameworks, you may soon be dealing with new and updated customer demands. Pick tools and processes that scale across departments and geographies, and lean on pre-mapped controls to avoid starting from scratch every time.

What are GRC maturity levels?

Open architectures support better collaboration with external partners and flexibility to operate in multinational environments. Combining governance, risk, and compliance facilitates adaptability to an ever-changing market needs. 

To implement GRC transformation successfully, it is crucial to assess and identify where you currently stand in respect to its final stage. A GRC maturity level model helps to make this comparison. 

Here are the five levels of maturity models:

1. Siloed

The siloed stage is concerned with basic activities and has poor coordination among functions. These functions mostly work independently, while risk or compliance tasks are assigned to the logical management team. Training and awareness remain a closed off process within the concerned department. Business partners and vendors have little or no visibility into risk and compliance functions. 

As the need for structured governance increases, so does the dependency on third-party consultants or experts. Any solution to meet GRC requirements is also limited to the operational process within that function, kickstarting basic GRC expertise around the domain.

2. Preliminary

In the preliminary stage, organizations start moving towards integration which helps to boost efforts within functions. Coordination between functional heads helps to demonstrate the benefits of GRC efforts. This ultimately results in the implementation of the GRC awareness framework and a better understanding of the framework. 

At this stage, it is not uncommon to observe an increased requirement for a structured follow to handle risk or compliance issues. Organizations standardize control based policies for common issues to reduce repetitive tasks. 

As coordination efforts build, long-term strategy takes shape. This is a long transition that involves documentation of existing strategies and monitoring roadblocks for each function. Tools and technology used within each group should be identified and technical infrastructure should align with common policies and issues. 

3. Managed

While the managed stage demonstrates significant improvement in terms of operational efficiency, the management still has a lot of complexities to figure out. At the managed stage, teams to manage GRC strategy and its supporting technical infrastructure is established. As these functions start working together, a single source of truth for training and awareness related to risk and compliance is an important step to build a culture of compliance. 

Strategies documented in the previous phase develop in the form of objectives, and technical and resource requirements. You can analyze by functions to fit into the larger GRC goal and eliminate silos. As workflows become more complex, management and prioritization is crucial to ensure proper execution. Implement standardized metrics to identify goal completion and monitor activities. 

Finally, this stage is marked by an integrated GRC tech stack, elimination of basic tools like excel sheets and the technical team ensures proper implementation. 

4. Transformation

The transformation stage is focused to improve collaboration across functions and is crucial to ensure that the organization is meeting the goals of its GRC program. Management teams oversee activities like technical coordination project prioritization. 

Assessing awareness and integration of compliance will improve accountability. A shift in the way risk related processes function will be seen and defined using a common language. Project metrics will be reviewed and monitored to identify gaps. 

A well managed and operational structure marks the transformation stage. It required a better management system for new requests and a controlled management program. 

5. Advanced

In the advanced stage, we see all the pieces of the GRC puzzles put together – business goals, strategies, and objectives align with GRC processes. 

Employees are well aware and trained on risk management. As functions use a standardized process of risks, controls, and assets, it results in a centralized view of risks that helps to prioritize tasks based on requirements. This helps to prioritize risks to identify, analyze, mitigate, and monitor risks. 

This stage is marked by regular monitoring and planning to continuously improve operations. The overall technological ecosystem is steady

How Sprinto can help you scale your GRC efforts?

Maintaining business performance, keeping up with compliance requirements, meeting stakeholder expectations, and implementing technological consistency across teams is challenging. Juggling all these without a proper process can quickly turn into a nightmare – and goals don’t achieve by themselves. 

The solution? Sprinto combines the principles of GRC framework – people, process, and tools to help you achieve a consistent approach to all your troubles. It automates practically 90% of tasks, monitors for risks throughout the tech stack, and trains your staff to be self-sufficient. 

Talk to our experts about your unique requirements. 

FAQs

What is a GRC framework?

A GRC framework is a model that helps to manage governance and risks within a business environment and the approach used by the company to identify policies attaining these goals. 

What type of business needs GRC?

Any industry like IT, manufacturing, transport, logistics, food, and more can use GRC tools to streamline business processes.

What does a GRC specialist do?

A GRC specialist helps with framework development and GRC implementation processes. The analyst ensures effective risk management strategies are prioritized and regulatory requirements are met. The role also includes monitoring efforts and reporting the management.

What is the difference between GRC and IT GRC?

GRC is a broader framework that includes comprehensive risk and compliance initiatives. IT GRC on the other hand focuses on security risks related to information technology and data.

What is GRC compliance?

GRC compliance refers to adherence of industry standards and corporate policies within the GRC framework.GRC compliance platforms help to implement and monitor risk assessment strategies across the ecosystem. These include a wide range of risks revolving around finance, strategy, or operations. GRC compliance facilitates seamless risk evaluation, incident tracking, and easy decision-making by centralizing these functions.