Building the Right Foundation for Governance, Risk, and Compliance (GRC)

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Organizational structure and lines of business

To create a well-governed organization, it goes without saying that you need to know the organization's structure. Within most organizations there is usually a single (or preferred) 'source of truth' that depicts the organizational structure. Go with that one.

However, for the purposes of GRC, it is not really required to map risks and business processes down to the most granular level of the organizational structure. Greater granularity of information means greater fidelity in decisions – but it also means a LOT more work and, possibly, noise. So, it is important to pick the right level of the organizational structure for various GRC activities so that it adds net value without overwhelming the practitioners that are administering the GRC program.

In banana-lingo – you probably care about the banana plantation in Jamaica, or maybe even the different functions within that plantation (if it is big enough), but at the level of GRC monitoring, you probably do not need to track the different teams of workers working under different foremen in different parts of the plantation.

Lines of businesses, legal entities, functions, people, business processes, risks, controls, products, projects, programs, strategic initiatives, servers, facilities, suppliers – the business of doing business is complicated. And if we are to create a well-governed and risk-aware organization that reaches for the sky on the shoulders of GRC, then we need a simple and consistent way to handle all this complexity. Furthermore, as with all foundations, creating it requires a solid understanding of what we're going to put on top of it. So, a comprehensive GRC foundation will need to be informed by GRC activities such as policy management, risk management, supply chain governance, IT risk, security, etc., so that it, in turn, can support all these activities with a common framework.

Before we get ahead of ourselves, if you're still wondering what 'GRC' is, then here's a quick introduction to the topic. OK, with that out of the way, let's move on and enlist the help of our friendly neighborhood banana company, 'The Wide World of Bananas, Inc.' to be our role model for the day. "Why 'bananas'" you say? Well, that's easy – because they are yellow, healthy and such a fun fruit! And, like the banana, the business of growing and delivering them to your friendly neighborhood grocer hides more complexity than the surface lets on.

In this slideshow, Vasant Balasubramanian, vice president of product management at MetricStream, takes a closer at building a strong foundation for GRC.

 

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