Emerging Trends in Governance Risk and Compliance

In the commercial world, change is accelerating at an incredible rate. Businesses face new risks daily, such as those associated with supply chains, third-party suppliers, privacy concerns, operational difficulties, cyberattacks, and financial instability.

FREMONT, CA: Governance, Risk, And Compliance (GRC) trends refer to a firm's strategy for managing the interrelationships among corporate governance policies, enterprise risk management programs, legal compliance, and company regulations.

The rate of change in the business world is astounding. Every day, new company risks arise, such as those associated with supply chains, third-party suppliers, privacy concerns, operational difficulties, cyberattacks, financial instability, and environmental compliance.

These issues are not distinct; they are interconnected and require comprehensive solutions. Therefore, organizations must take a deliberate, comprehensive approach to GRC. Companies must modify their GRC strategies as the business environment evolves to maintain a holistic view of interconnected risks, appreciate the financial consequences of those risks, and make smarter decisions at all levels.

The following GRC trends can aid organizations in adopting a proactive posture to transform risk into a competitive advantage.

DISRUPTION

Disruptions are becoming increasingly common, yet businesses often overlook them. Numerous companies, including banking, insurance, the life sciences, transportation, and even college admissions procedures, experience disruptions.

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How are companies responding? Many strive to anticipate and mitigate the risk of interruption in advance. A leading airline, for instance, has established a risk-weighted customer experience by integrating and aggregating all of their customer complaints, operational issues, quality concerns, and system-related difficulties and then aligning this data with their material risks and growing risks. By doing so, they can proactively identify and address any possible risk patterns, weaknesses, or holes in the customer experience that competitors could utilize to disrupt the market.

Other businesses are enhancing their capacity to manage both anticipated and unanticipated disturbances.

For instance, a major national train operator responds to future market developments by prioritizing risk situations affecting internal operations, consumers, the economy, and the overall national logistical infrastructure system. This risk awareness is vital because the organization is instrumental in bringing essential utilities to some of the nation's most remote regions. Life-threatening circumstances may arise if a market is not prepared for disruption.

GRC TRENDS: COORDINATION.

In the corporate sector, change is occurring at an unprecedented rate. Others are being sold while others are being purchased. As a result, business models and strategic priorities are evolving. Moreover, GRC tools, procedures, and functions are constantly changing. Ensure that these changes are implemented in a coordinated, well-considered, and systematic way.

A big worldwide insurance company learned this the hard way after investing millions of dollars in GRC trending initiatives that were "solved for today" or short-lived, resulting in several silos and disconnected procedures.

Instead of a "big bang" or "tear and replace" approach, the firm attempted to gradually integrate and harmonize risk management after reevaluating its strategy. They created robust, adaptable data and process frameworks that enabled the coexistence of numerous legacy systems. This database was the foundation for a long-lasting, forward-thinking approach to risk management.

This is an example of harmonization. The second entails collecting data from multiple sources and applying it to provide risk insights within organizational goals and strategic objectives. Context is the essential word in this instance. A leading investment firm eventually realized this after trying for some time to bring together diverse perspectives on the same risk, from quality, business resilience, IT, and, most importantly, business owners.

A consistent risk library and taxonomy improved the consistency of risk communication. They also utilized a federated approach to risk management, which gave them the flexibility to consider various risk perspectives.

HYBRID LABOR INVOLVES CYBER AND HUMAN HAZARDS

An organization must have flexible and adaptable structures to be robust across all functional domains. Hybrid employment provides individuals with flexibility but increases operational risk.

Organizations attempting to build their "new normal" in hybrid models must embrace change and agility to preserve data, treat employees appropriately, and attain DEI objectives.

As managers handle the challenges of a dual workforce, hybrid work arrangements introduce a new workforce risk—establishing and maintaining equal relationships between on-site and remote employees. An example of a risk associated with hybrid work arrangements is their emphasis on "management by walking around," which may be detrimental to remote employees.

If an organization wishes to eliminate this discrepancy, it should prioritize leadership. Give them education and training to help them develop their virtual leadership skills and enhance their relationships with remote employees.