What is GRC?

GRC is a combination of three practices in an organization: Governance, Risk, and Compliance. These practices ensure that the objectives of an organization are met, and actions are aligned with integrity.

GRC is a tool that aims towards arranging an organization's information and activities that lead to the fulfilment of compliance, establishing governance, and preventing overlaps. In simple terms, it can be said that it infuses good business practices into everyday business operations where the risk factor is surging that can create a complex nexus. Let us now give a close look at governance, risk and compliance (GRC) and the impact of the GRC system in an organization.

What is the meaning of GRC in an Organization?

GRC contains three components:


It is the process of controlling the entire organization. It includes rules, relationships, systems, and processes by which authority is exercised by the management and controlled in the company. It is a system and not just a single activity. Therefore, successful execution of a good governance strategy needs a systematic approach that involves that planning at a strategic level, management of risk, and performance management.


A set of policies and procedures is adopted to identify and analyze the presence of risk factors and the level of impact they might create in the organization. Risk can be internal or external, and there might also be a certain positive risk that might generate a positive impact, such as an increase in organizational value. Thus, risk management requires the management to make smart decisions.


It is a process of ensuring that the organization's legal system is being followed where all the applicable laws are timely complied with. It covers the statutory laws and includes the regulations, standards, and ethical practices.

Why is GRC System Needed?

  • Control Implementation: Rules and regulations can be complex, and the level of enforcement can be difficult in many situations. Adoption of GRC system can assist in managing the control functions.
  • Increasing regulatory compliance: Every industry faces regular changes in laws that must be complied with by the organizations. GRC system can help to integrate those changes more effectively.
  • Increased savings, increased revenue: Adoption of the GRC system acts as a cost and time saver. It can help reduce the redundancy of resources, identify irregularities and common risks, implement better

How can GRC System Impact an Organization?

A strategic and planned system can string together the enterprise governance risk and compliance structure.

  • Better risk information of an organization.
  • Increase in strategic and informed decision-making.
  • Saves time and efforts that can be directed towards the achievement of organizational goals.
  • Enhances accuracy of data and risk elements with reduced fragmentation.
  • Creates a single and effective operational structure.
  • Leads to an overall improvement of the organizational performance.

The integration of GRC in a company regularizes the entire organizational function and steers the organization toward success. With a quick responding system, identification of irregularities can be much easier, and management decisions can be more balanced and data-driven.

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