Governance, risk, and compliance are the foundational elements that guide an organization’s ability to meet its objectives, manage uncertainties, and adhere to legal and regulatory standards. These elements can be defined as:

• Governance
  The frameworks of an organization’s activities and whether or not they are aligned with business objectives. Activities include processes, structures, and policies that are meant to manage and monitor company activities..

• Risk
  A sustained process of addressing risks, mitigating risks through controls, and providing assurance that the risks are managed according to policies. This includes measurement of risk, assessment, retention, monitoring, and identification.

• Compliance
  Ensuring that activities within an organization operate in a way that is aligned with laws and regulations.

GRC works by establishing a unified framework that integrates risk management, compliance management, and governance processes across an organization. This is made possible through the creation of structured policies and procedures that allow businesses to identify, assess, and mitigate risks effectively. This real-time visibility into risk exposure helps companies safeguard their operations, finances, and reputation.

GRC relies heavily on collaboration across key stakeholders (such as senior executives, legal teams, finance managers, HR, and IT departments), ensuring that all aspects of the business are on the same page regarding the organization's risk management and compliance strategies. These stakeholders work within a shared GRC framework that guides decision-making and shapes workflows. Regular reporting and clear communication keep stakeholders informed, fostering transparency and accountability throughout the company.

Ultimately, GRC empowers organizations to integrate risk management into their strategic planning.

Unaccounted-for risk has the potential to bring even the strongest organizations to a grinding halt. As such, understanding the diverse types of risks is essential for building a strong GRC program. Different risks, from strategic to operational, pose unique challenges, and managing them effectively requires targeted approaches and controls.

• Strategic risk
  Strategic risks arise from decisions that affect the overall direction of the company. Effective governance and ownership of these risks help align business strategies with long-term objectives.

• Operational risk
  Operational risks can disrupt or alter critical business processes. These include failures in internal procedures, systems, or external events that impact day-to-day operations.

• Technology risk
  Technology risks encompass failures in IT infrastructure, applications, and connected devices, as well as those threats associated with cybersecurity. Addressing these risks involves securing systems, maintaining uptime, and ensuring data integrity to prevent business interruptions.

• Data risk
  Data risks refer to the potential theft, corruption, or unauthorized access to sensitive information. Protecting data through confidentiality, integrity, and availability measures helps prevent breaches while maintaining trust with stakeholders.

• Cyber risk
  Cyber risks involve the financial, operational, and reputational damage caused by IT-related security breaches. This includes cyberattacks, system vulnerabilities, and data loss.

• Privacy risk
  Privacy risks come from personal or confidential information being exposed or misused. Organizations must take steps to protect sensitive data, comply with privacy laws, and prevent unauthorized access or disclosure.

• Reputational risk
  Reputational risks can damage the public perception of a company due to negative events like data breaches, product failures, or poor customer experiences. Maintaining a strong risk management posture is vital to preserving trust and brand reputation.

• Third-party risk
  Third-party risks occur when vendors, suppliers, or business partners introduce vulnerabilities into the organization. Managing these relationships requires assessing the risk posture of external entities to ensure they do not compromise internal security or compliance.

• Compliance/regulatory risk
  Compliance risks involve the consequences of not adhering to laws, regulations, or internal policies. Failing to meet these obligations can lead to penalties, legal action, or reputational damage.

The GRC Capability Model provides a structured framework that helps organizations implement governance, risk management, and compliance in a cohesive way. Developed by the Open Compliance & Ethics Group (OCEG), the model is designed to guide companies in achieving "Principled Performance." This involves aligning their actions with business objectives while effectively managing risks and ensuring compliance. The model consists of four core components that work together to create an integrated approach to GRC operations:

1. Learn

The first step in the GRC Capability Model is learning about the organization's internal and external context. This means understanding the company's culture, values, and key stakeholders. By gaining insights into these factors, organizations can define strategies that are both realistic and aligned with their objectives.

2. Align

Next, the compatibility model focuses on ensuring that an organization’s strategy and goals are in sync. This is achieved through careful consideration of both internal and external factors—business opportunities, regulatory requirements, values, potential risks, etc. Effective alignment ensures that decisions made at all levels of the organization support long-term objectives and are consistent with the organization’s risk management framework.

3. Perform

With all factors properly aligned, organizations can now take action to achieve their objectives. This phase emphasizes taking deliberate actions that align with both the organization’s strategy and its governance and compliance frameworks. In addition to promoting behaviors that drive success, organizations must likewise actively work to prevent actions that could lead to negative outcomes. This stage also includes closely monitoring operations to detect risks and adjusting actions based on feedback.

4. Review

The final component of the GRC Capability Model is reviewing the effectiveness of the strategies and actions being implemented. Regularly reassessing the alignment of strategies with organizational goals and making adjustments in response to changes in the regulatory environment or business landscape helps companies constantly improve their GRC practices.

GRC can be a big task—or, more accurately, a complex and constantly shifting collection of multiple tasks. GRC tools make it possible to manage governance, risk, and compliance effectively. These software solutions automate key GRC actions, centralize data, and facilitate collaboration across departments. And, by integrating various aspects of governance and risk management, the right tools can help improve decision-making while ensuring that all compliance requirements are met.

The following are among the most common types of tools related to GRC: 

• Risk assessment software
  Risk assessment software helps organizations identify and prioritize potential risks, allowing businesses to anticipate threats and take steps to mitigate them before they can impact operations.

• Compliance tracking
  Compliance tracking tools monitor an organization’s adherence to industry regulations and internal policies. These tools provide real-time updates on compliance status, keep tabs on regulatory changes, and help ensure that processes remain aligned with any changes to legal requirements.

• User management
  User management software controls access to company resources by defining roles and permissions. This ensures that employees have secure access to the information they need while preventing unauthorized users from reaching sensitive data.

• Security information and event management (SIEM)
  SIEM software detects and responds to potential cybersecurity threats by analyzing security events across the network infrastructure. IT teams use SIEM tools to identify vulnerabilities, manage security incidents, and ensure compliance with data privacy regulations.

• Audit management
  Audit management software simplifies the process of conducting internal audits. By organizing audit data and optimizing the reporting process, these tools ensure that audits are thorough and efficient.

• Increased demand for transparency and accountability
  Today’s stakeholders expect organizations to operate with a high level of transparency and accountability. GRC systems keep governance practices visible.

• Constantly evolving regulations
  Regulations are not static; they change constantly, making it difficult to keep up with new compliance requirements. A strong GRC framework helps organizations stay ahead of these changes, reducing the risk of non-compliance.

• Complexity of third-party risks
  As organizations increasingly rely on third-party vendors and suppliers, managing these external risks becomes more complex. GRC solutions provide the tools to monitor and mitigate risks posed by third parties.

• Consequences of poor risk identification
  Failing to identify and manage risks can have serious impacts, including financial losses, reputational damage, and operational disruptions. GRC helps organizations improve risk visibility and address potential issues before they escalate.

• GRC drives efficiency and growth
  By streamlining compliance and risk management, GRC solutions empower businesses to operate more efficiently. This leads to cost savings, improved resource allocation, and better scalability.

Integrated GRC, or integrated risk management, is a wider scope, enterprise-wide approach that equips organizations with the ability to monitor, manage, and act on different risks in real time. Integrated risk management is an important aspect of a risk conscious organization that can improve performance and decision making.

Strategy

Managers can make informed, risk-based decisions to stay aligned with business objectives.

Integration

Organizations gain a better understanding of risks and the impact of those risks on the bottom line. This is shared across departments and business units, which can help in the breaking down of silos and unnecessary duplication.

Digitized

GRC is united in a single platform to allow the automation of processes. Workflows are simplified, documentation can be stored, and there is the creation of a more standardized framework.

Practitioner expectations are evolving so that an integrated approach to managing risk is desirable.

An integrated approach to risk management brings together processes, technologies, and data from across the organization to manage risks holistically. By uniting risk and compliance efforts into a single framework, organizations can enhance visibility, optimize workflows, and make more informed decisions.

For this to be possible, an effective GRC program must:

• Be driven by industry leaders like CISOs, CROs, CIOs, CFOs, CEOs, legal, etc.
• Have a risk-focused culture.
• Be built on a modern, integrated, cloud-based platform.
• Integrate easily with other technologies in the ecosystem to collect data.
• Make data sharing easy to be able to cross leverage common data.
• Target and address business risk throughout the organization and third-party ecosystems.
• Create business-oriented, process-based workflows to analyze and treat risk.
• Embed risk intelligence and workflows into daily/operational tools.
• Make risk and compliance available at everyone’s fingertips.
• Enable continuous monitoring of risks and controls through automated risk indicators.
• Explain risk in business terms through business-focused dashboards.
• Do it all on an on-going basis for departments and functional groups across the enterprise, and with vendors, to provide a holistic, real-time view of risk.

When GRC programs are disjointed, manual, or poorly implemented, they can introduce inefficiencies and blind spots that compromise risk management. The following are just some of the potential consequences of siloed and outdated GRC practices:

• Rising operational costs
  Manual and fragmented GRC processes lead to inefficiencies and higher costs. Without automation and integration, organizations spend more resources on managing their governance, risk, and compliance, which can impact profitability.

• Lack of risk visibility
  Disjointed GRC practices result in limited visibility into potential risks, leaving organizations vulnerable to unanticipated threats. A lack of transparency hinders decision-making and increases the likelihood of disruptions.

• Unaddressed third-party risks
  Failure to monitor third-party risks effectively can expose the organization to external vulnerabilities. Without proper oversight, vendors or partners could compromise security or hurt compliance efforts.

• Inability to measure risk-adjusted performance
  Siloed GRC systems make it difficult to assess performance in relation to risk exposure. This hinders the organization’s ability to optimize operations and prioritize high-risk areas.

• Poor risk prioritization
  Without a unified GRC framework, teams may focus on low-priority risks, wasting time and resources on issues that are not major concerns. A lack of clear communication about risk priorities results in misaligned efforts across departments.

• Decreased productivity
  Manual, siloed processes consume time and create inefficiencies. Employees are often disengaged due to cumbersome user experiences, leading to lower productivity and higher operational costs.

• Limited collaboration across departments
  When risk management is siloed, collaboration across departments suffers. Ineffective communication prevents teams from sharing valuable risk information, resulting in disjointed efforts and missed opportunities.

Given the dangers associated with regulatory non-compliance and unmanaged risks, it’s not hard to see the value in governance, risk, and compliance. Unfortunately, companies may also run into some obstacles when integrating GRC processes into their operations. The following are some of the most common challenges these businesses face:

• Managing data from disparate sources
  GRC systems require combined data from various departments, which often results in duplicate or conflicting information. Managing this data can become overwhelming. Counter this concern by implementing centralized data management tools that standardize data across the organization and eliminate redundancies. Regular audits of data processes can also help maintain accuracy.

• Building an ethically compliant culture
  Fostering a culture of compliance and ethics across all levels of the organization is challenging, especially in large enterprises. To make it happen, leadership must actively promote ethical behavior through regular training, clear policies, and the right examples being set by those at the top. Consistent communication about the importance of compliance is likewise key to embedding these values into the company culture.

• Adapting processes
  Organizations may struggle to act on the insights GRC tools provide—especially when doing so requires significant changes to processes or strategies. A structured change management program that includes training and leadership support can help employees adapt quickly to new GRC-driven processes.

• Communicating effectively
  Poor communication between GRC teams, stakeholders, and employees can create silos and hinder decision-making. Establishing clear communication channels and regular reporting protocols is often the answer. 

• Working with an incomplete GRC framework
  Without a fully integrated GRC framework, businesses often experience fragmented implementation, weakening their risk management efforts. The answer is to invest in a comprehensive GRC platform that integrates governance, risk, and compliance components across the organization.

Effective GRC establishes an approach to ensure that the proper people get the necessary information when it is needed, objectives are established, and the right controls are put into place to address uncertain situations and act. A GRC process done right yields the following benefits:

• Reduced costs through automation and by reducing the likelihood of penalties from audit findings, compliance violations, and breaches.
  
• Reduced risk posed by vendors.
• Improved ability to adapt to changes in business models, risks associated with digital transformation, or new regulations.
• Reduced impact on operations—efficiency gains allow organizations to do more with less.
• Improved ability to scale and grow the business.
• Greater ability to gather quality information quickly and efficiently from employees and vendors.
• Increased access to risk Information across the enterprise with a single repository.
• Greater ability to repeat processes consistently.
• Improved productivity by eliminating repetitive and redundant tasks.
• Effective communication with stakeholders across the business, with executives, and to the board.
• Strategic decision-making with real-time risk data and the ability to calculate the impact on the business.
• Competitive advantage—customers know there is a plan in place to address risks, which should reduce the likelihood of a breach and better protect their data.

Although there is no single, one-size-fits-all GRC solution, most solutions do share common components. Below are some essential functions and factors found in most GRC platforms:

• Risk controls
  Controls are mechanisms put in place to mitigate identified risks. Effective GRC solutions include predefined controls to help organizations manage risks consistently and in line with industry best practices.

• Streamlined workflows
  Workflows in GRC platforms ensure that governance, risk, and compliance processes are automated and standardized. This improves efficiency, reduces human error, and allows teams to respond quickly to emerging risks.

• Centralized data repositories
  A central repository makes it possible for organizations to store and access critical GRC data across teams and departments, ensuring that every authorized individual is working with the same information.

• CMDB for business impact
  A configuration management database (CMDB) helps organizations link IT assets to risk data, ensuring that any potential disruptions to critical systems are identified and addressed as quickly as possible.

• Risk indicators
  GRC solutions use key risk indicators (KRIs) to monitor potential threats. These indicators track risk exposure in real time, allowing businesses to adjust strategies and controls before risks escalate.

• Policy lifecycle management
  Managing the entire lifecycle of policies—from creation to review and retirement—is critical to maintaining compliance. GRC platforms ensure policies remain up-to-date and aligned with current regulations and business needs.

• Authority document library
  An authority document library contains essential regulations, standards, and guidelines that organizations must follow.

• Mobile capabilities
  Mobile GRC solutions allow employees to access compliance and risk management tools on the go. This flexibility enables teams to manage risks and respond to incidents as they occur.

• Chatbots for user engagement
  Chatbots within GRC platforms assist users by answering questions, guiding them through processes, and improving overall user engagement.

• Policy management
• Regulatory compliance
• Digital and technology risk management
• Third-party risk management
• Audit management
• Operational resilience and continuity management
• Privacy management

Governance, risk, and compliance have the potential to secure businesses against a range of dangers, but only if it's implemented correctly. To help ensure success, consider the following best practices when planning and build a GRC framework:

• Identify any major GRC issues that exist in the organization
  Start by assessing the organization’s current GRC landscape. This includes reviewing unresolved risks, compliance gaps, and operational weaknesses that may be negatively impacting the business.

• Clearly define GRC goals
  Establish specific objectives that the GRC strategy should achieve. Clear goals help shape the GRC framework and align it with established priorities.

• Get buy-in
  GRC implementation requires support from senior leadership as well as engagement across all levels of the organization. Without buy-in from executives and staff, the strategy may face resistance.

• Establish roles and responsibilities
  Define the roles of key stakeholders in the GRC process. Clearly assigning responsibilities promotes accountability and helps streamline decision-making and reporting.

• Perform GRC framework testing
  Before launching an organization-wide GRC program, test the framework with a small department or business unit. This allows the team to identify any issues early and make adjustments where needed.

• Work with an effective GRC platform
  Leverage specialized GRC software to automate processes, centralize data, and track compliance and risk management activities. A comprehensive platform improves reporting accuracy, simplifies collaboration, and provides real-time insights into the organization’s risk and compliance posture.

Without an effective governance, risk, and compliance strategy, businesses face increased vulnerability. This has created an environment where a strong GRC framework is more than simply advantageous; it is essential. ServiceNow provides a suite of integrated solutions designed to address GRC challenges across the enterprise.

The ServiceNow Governance, Risk, and Compliance suite of applications brings together a range of powerful tools tailored to specific areas of risk and compliance management. Each solution integrates seamlessly into the Now Platform®, helping organizations streamline operations and improve enterprise-wide visibility into risk. By adopting these solutions, your business can build scalable and efficient GRC programs that are the perfect match for your unique goals.

ServiceNow GRC solutions include:

• Integrated Risk Management
  Offering a unified approach to assessing, monitoring, and prioritizing risks, Integrated Risk Management makes it possible for your organization to take risk-informed actions and improve operational resilience by embedding risk intelligence into your decision-making processes.

• Business Continuity Management
  Business Continuity Management facilitates continuity planning, disaster recovery, and crisis response to help your teams prepare for and recover from disruptions. Built-in dependency mapping and crisis impact visualization improve response times and ensure critical operations are always maintained.

• Privacy Management
  Address privacy risks and evolving regulations with Privacy Management. This application provides tools for automating privacy assessments, ensuring compliance, and embedding privacy practices into your workflows.

• Third-Party Risk Management
  Keep better track of the vendors and suppliers you depend on; Third-party Risk Management centralizes third-party risk oversight, automating due diligence processes and providing total visibility into vendor relationships.

Experience the peace of mind that comes from the right approach to governance, risk, and compliance; demo ServiceNow today!