Governance, Risk management, and Compliance (GRC) are essential to any business. Running a business requires a certain level of skills and abilities.
Lack of basic managerial skills or a system of checks and balances may lead to the collapse and decline of a company.
It is especially important in today’s dynamic business world where there is stiff competition.
So, what is GRC?
Let us check it out.
1. Governance
Governance refers to a system of processes, rules, and practices that are crucial in directing and controlling a business. It provides a framework on which the company achieves its aims and objectives. Governance applies both to the internal and external environment of your business. It involves placing a balance on the company goals, the community and stakeholders interests.
Some of the main positive aspects of good management include:
• There is increased business sustainability when you can govern your business well. Your business will remain viable for a long time.
• Good governance helps in creating lasting relationships with the company’s stakeholders. The value of your business, therefore, continues growing alongside beneficial relationships.
• It requires discipline to ensure proper governance. The process helps in paving the way for your company to grow and expand beyond expectations.
• Governance entails being accountable for the actions and performance of a business. Accountability thus encourages performance management which promotes productivity and profitability.
2. Risk Management
Risk management is one of the central functions that you ought to conduct as a manager. Risk management involves identifying potential risks, assessing them, and developing effective strategies to address them. No matter the size of your business, ensure you have a risk management department to help in sustaining your business. Understanding your company will help you have an idea of what risks you are likely to face. Plan and analyze to identify potential threats on time. Determine what areas have threats, the sources, and the affected parties. The information is vital in formulating strategies to manage risk effectively. Some of the benefits include:
• You will be able to plan and account for the hazards in planning.
• There will be an efficient use of time, resources, and money as your business already managed risks.
• The practice will create a safe working environment and reduce adverse incidences.
• Risk management helps in sustaining your business by identifying threats and dealing with them in time.
3. Compliance
Compliance refers to your business conforming to the regulations and laws concerning your business. Today’s business world is dynamic and ever-changing. It is essential as a manager to stay updated with the changes in regulations. It is especially critical if your type of business is relatively new. Compliance plays a significant role in growing your business. It involves not only the external regulations but also internal systems in the company. The laws concern the staff, community, customers, and stakeholders to the business. Make sure you create a compliance department to specialize in dealing with the issues.
Some of the benefits include:
• You will avoid criminal charges and lawsuits that will bring into trouble with the law.
• Compliance will promote your business image and attract many potential partners and clients.
• You will be able to build a positive reputation for your business and gain a competitive advantage.
• Your company will have increased partnerships, collaborations, and loyalty from all the stakeholders.
• You will experience increased productivity, profitability, and a positive working environment.
