Now is the time for governance, risk management and compliance (GRC) functions to participate in shaping the future in the digital world.
Emerging threats in the digital era, such as cyber attacks, competitor shifts or geopolitical crises, are influencing the future direction of business and forcing their way onto board agendas. Old-world challenges (such as the integration of risk management and financial planning, protecting tangible goods or the fragmentation of data and business functions) collide with new ones in the digital sphere. Now, corporate governance, risk management, compliance management and other “line-of-defense” functions must invest in managing digital risks that matter, and risk functions must transform.
Designing a risk management approach based on agile guidelines and processes, empowered people, cutting-edge technology and analytical capabilities is critical to drive companies forward. It must harness the value of the digital world and protect the organization against the multitude of risks in a volatile and uncertain environment.
The evolution of GRC
Over the past three decades, GRC has evolved in response to a number of large-scale macroeconomic events, as well as the business and regulatory changes they precipitated. In doing so, GRC has continually adjusted its core focus and expanded the scope of risk it covers. Today, companies face greater uncertainty in a wide array of new and emerging risks. The ever-evolving globalization of competitive markets exposes many organizations to a new breed of risks, many of which were not planned for, nor could have even been anticipated. For these reasons, GRC is entering a new phase in its development, focused on continual monitoring and responsiveness, business decision support and improved shareholder value.
A future-oriented GRC approach can support organizations in multiple ways.
Agile GRC — governance, trust and risk in the digital era
Agile GRC, therefore, addresses a new way of corporate governance, supported by technology and a spirit of agility and entrepreneurial thinking. For this agile, integrated and future-oriented approach, we defined five key guiding principles that build the foundation for how to operate, empower and make decisions in our next generation of business operations and GRC management:
- People first — business leaders must understand and recognize that properly motivated people are the strongest links in the chain. It is necessary to shape behavior and motivate people to do the right thing rather than try to force them to do what they are told.
- Purpose-led — it is essential to activate purpose for a changing business landscape and a new GRC environment across the organization. This adds the right insights to help guide decisions.
- End-to-end centric — future success is based on the essential capability of being able to take the customer’s perspective (both internal and external) into consideration across all GRC-related functions, activities and outputs.
- Multilane speed — ensuring that the right governance, processes, capabilities and enablers are in place to address the different demands of business models, areas and lines of business.
- Fully digitalized — mobilizing a technology portfolio that digitalizes and optimizes all risk- and compliance-related activities, embeds them into the organization and end-to-end processes, and engages all stakeholders based on their individual needs.