What is GRC? (+Building the Best GRC Framework)

If you work in or around enterprise security circles long enough, you may come across the term “GRC.” However, it might not be immediately clear what GRC means—even after reading an online GRC meaning/definition from some online security blog.

What is GRC? Why is it important? More importantly, how can you enact a GRC security framework that helps you protect your organization’s data and systems?

What is GRC?

GRC is an acronym for governance, risk, and compliance. This term is used to describe the various tools, processes, and strategies that an organization uses to manage their internal governance, enterprise risk management, and compliance with industry regulations.

Of course, this isn’t the only GRC meaning you could use. As noted by CIO.com, it can help to think of “GRC as a structured approach to aligning IT with business objectives, while effectively managing risk and meeting compliance requirements.”

Governance, risk, and compliance frameworks will vary greatly from one organization to the next depending on the data they need to protect, the specific risks that they will face, and the regulations that govern their industry and business model. Any one of these factors can heavily influence your governance risk management and compliance strategy.

Why is GRC Important?

So, what’s the big deal about GRC security frameworks? Why is it important to apply a governance, risk, and compliance framework to your organization’s operations?

While GRC isn’t solely limited to security (GRC frameworks often extend into quality and/or performance management as well), the security aspects of governance, risk management, and compliance tend to be the most heavily emphasized. So, this article will primarily focus on the security impacts of GRC.

Failing to implement some controls for governing an organization, managing security risks, and ensuring compliance with mandatory industry regulations can:

  • Impede operations and reduce interoperability between teams/departments (because of the lack of consistent governance across the organization).
  • Lead to severe data security breaches (because of a lack of security controls and measures based on the organization’s risk profile).
  • Cause fines and other penalties to be levied against the organization (for failing to meet critical compliance requirements).

In short, GRC frameworks are important because they help to reduce risk, manage effectiveness, and ensure compliance.

What Are the Components of GRC Security Frameworks?

Obviously, the components of a GRC security framework can be divided into three major categories:

  1. Governance;
  2. Risk; and
  3. Compliance.

However, what do each of these categories entail? Here’s a quick explanation of some of the top-level components of each category of a GRC system:

Governance Management

Governance management covers the way that organizations are, well, governed—starting at the top. The governance components of a governance risk management and compliance framework typically include:

  • Corporate Management. How are the relationships within the organization structured? Corporate management in a GRC system framework examines these relationships and how they work to create optimum efficiency and smoothness of communication.

  • Strategy Management. Who is responsible for what in the organization? What are the goals of the organization? Examining strategies to ensure that roles and responsibilities are aligned with the organization’s goals helps ensure everyone knows what to do and why they need to do it.

  • Policy Management. Is there a set, consistent process/policy/procedure for everything that people need to do on a daily basis? Policy management helps create consistency across the organization so that everyone can produce consistent results.

Risk Management

Risk management involves identifying, assessing, and managing the various types of risk that an organization might face in its day-to-day operations. By identifying the most likely-to-occur risks that will have the biggest impacts, organizations can prioritize security measures that will have the biggest mitigating effect for the lowest possible cost.

The three components of risk management are:

  1. Identifying Risks. What are all of the risks that your organization faces on a daily basis? What kind of accidents or attacks might affect your operations? Identifying risks requires having a thorough inventory of your assets and processes as well as some information about the threats that may target your business.

  2. Assessing Risks. Once you know what risks your organization faces, it’s necessary to rank them by likelihood and impact. This way, you can address the risks with the biggest impacts that are the most likely to happen—helping you create the biggest ROI with the smallest cybersecurity expenditure.

  3. Managing Risks. After classifying risks by likelihood and impact, it’s necessary to take steps to mitigate your biggest risks. This may involve taking numerous measures—such as adding new network security tools, creating cybersecurity awareness programs, and establishing new security protocols/procedures to address specific threats.

These risk management processes are all crucial to a successful governance, risk, and compliance framework—and to cybersecurity in general.

Compliance Management

Compliance management specifically addresses the measures used to conform with industry requirements placed on a business. This covers not only information security standards (such as PCI DSS or HIPAA), but process and procedure-oriented standards as well. One of the major goals of compliance management is to avoid the censure and penalties that arise from non-compliance.

Key components of a compliance management process include:

  • Internal and External Audits. Organizations may have to run internal audits to pre-check for potential compliance issues. Additionally, they may need to use external auditors to provide objective reports on compliance issues in the organization.

  • Compliance Research. There should be extensive research done to determine which compliance standards apply to a given organization. External auditors often can provide information based on a business’ industry, though legal counsel and/or local authorities may need to be consulted about local, state, and federal regulations that may apply.

  • Security Procedures and Controls. Many compliance standards have strict requirements regarding security procedures and controls that organizations need to use. So, identifying and implementing these controls is a major component of any compliance initiative.

  • Compliance Reporting. Being able to create documentation proving that measures were taken to meet compliance standards can be a crucial, but easy-to-miss, point. Many regulatory compliance standards have strict documentation and reporting rules to follow—and may enforce penalties for failing to provide the right documentation, even if the actual guidelines are being followed. So, being able to accurately track and report compliance measures is crucial for any GRC framework.

GRC Tools to Use

Maintaining an effective governance, risk, and compliance strategy often calls for the use of specialized tools for each component of the framework. Some examples of GRC tools that you can use include:

  • GRC Software. Nearly any software that helps to manage some aspect of a governance, risk, and compliance framework could technically be called “GRC software.” When referencing the term “GRC software,” we’re specifically referring to software-based tools that are used to help manage GRC systems.

  • User Management Software. While this could technically be considered a subset of GRC software, user management software specifically helps monitor user privileges and access to various systems—which helps organizations enforce a policy of least privilege by restricting everyone to the bare minimum level of access they need to perform their job duties.

  • Virtual CISO Services. Virtual Chief Information Security Officer (vCISO) services consist of a variety of services offered by managed security service providers (MSSPs) to supplement or replace the CISO role within the organization. VCISO services can be incredibly beneficial for establishing or maintaining risk and compliance frameworks because they provide near-instant access to a whole team of cybersecurity experts.

  • Security Information and Event Management (SIEM) Tools. SIEM tools help organizations detect intrusion attempts as well as log event information. Being able to store a log of network event information helps improve visibility into security incidents—making investigations more efficient and effective. Also, having this data can be useful for complying with key industry cybersecurity regulations.

  • Auditing Tools/Resources. It isn’t enough to merely say you have a GRC system in place and call it a day. You need to test your GRC framework to see if it is producing noticeable results. Auditing tools and resources (including third-party auditing services) can help provide verification of a GRC program’s efficacy as well as opportunities for improvement.

5 Tips for Building a Successful GRC Framework

Building a GRC framework can be a long and involved process. Following a few basic steps can help:

Tip 1: Set Specific Goals for Your GRC System

What is it that you want to accomplish by adopting a GRC framework? It’s important to have set goals for the GRC system so you can customize the framework to best meet those goals.

For example, is your goal to prevent data security breaches? Then, you may want to focus on the risk portion of the framework to identify and counter your biggest threats. If compliance is the goal, then special attention should be paid to performing audits and checking that processes are consistently in line with compliance standards.

Tip 2: Take Stock of Your Current Situation

What policies, procedures, and tools does your organization currently use in its daily operations? How can they integrate with a new GRC system?

Assessing your current procedures and tools to investigate how well they supplement (or inhibit) your governance, risk, and compliance strategy can help you form a better GRC plan. It can also help you optimize resource allocation by optimizing existing solutions instead of having to source all-new ones from scratch—or identify the smallest changes that will have the biggest impact.

Tip 3: Assign Clear Roles and Responsibilities

In any governance framework, there need to be clear roles and responsibilities for every part of the framework. Without strict accountability, it’s difficult to ensure that GRC-mandated policies and procedures will be followed properly.

This includes establishing not only who has to follow what GRC policies, but for checking and enforcing said policies. Whether this enforcement role is given to a dedicated GRC officer, or to existing team members, it should have clearly defined responsibilities and the authority to act on those responsibilities. It can also help to establish a clear chain of communication for escalating GRC-related issues from the front-line employees to the people in charge of managing the GRC framework.

Tip 4: Consider a Limited-Scale Test of the Framework

Rolling out the GRC framework to the whole of your organization as soon as it’s ready isn’t necessarily a good idea. It can help to conduct a limited trial run of the framework in a specific department or in a single office to check how it affects work in a real-life environment.

For some businesses, this may not be a realistic option. However, larger enterprises may find this crucial for identifying “kinks” in their GRC system and working them out before implementing it across their organization.

Tip 5: Ensure That You Have the Right Resources in Place

One major issue that organizations of all sizes run into when creating a GRC framework is a lack of resources. New GRC officers may not have the authority or expertise to enforce the plan. There may be critical communication tools or auditing software missing that is needed to track the GRC system’s efficacy. Crucial security tools needed to meet compliance requirements may be underdeveloped or nonexistent.

This is why it’s important to thoroughly audit and test the GRC framework prior to implementation. Assessing your current resources and situation per tip #1 can help, as can running a limited-scope test run.

However, many organizations may miss critical security risks and flaws. Here, having outside help from a MSSP could be helpful. Virtual CISO services can provide a broad array of expertise in risk management—particularly from a cybersecurity perspective. VCISO services leverage a team of experts to provide crucial insights into security issues and risks. Additionally, they can help you optimize and manage the cybersecurity tools you need to mitigate risks and ensure compliance with strict industry standards.

Do you need help with the risk management portion of your governance, risk, and compliance framework? Reach out to Compuquip Cybersecurity and ask about our vCISO service today!