Transform governance risk and compliance into an integrated risk management solution
Modern operations have plenty to contend with. Data permissions handling, digital security and privacy protocols, maintaining full compliance with governing regulatory bodies including those of the government, and more comprise of the requirements set before them. Having an adaptive, effective integrated risk management solution can mitigate a bevy of complications, safeguarding your operations, employees, and even clients.
In this guide, we will focus on fundamental aspects of the integrated approach to corporate risk management. Explore everything from the benefits of such an integration, the importance of the right software and support services, the governance of risk management and compliance, and more. Let’s get started.
What is Integrated Risk Management?
We occasionally hear from clients, “what is the main focus of integrated risk management programs?” Often referred to as IRM, it comprises of various internal steps, as the term implies, undertaken with the goal of fostering a more risk-aware organizational culture. These can include any combination of process refinements, the implementation of enabling technologies like assistive software and support services, optimized best practices, training overhauls, and otherwise. With the right approach, executive leadership, management, and lower-level team members are better positioned to operate in a more compliant manner less prone to violations of governing terms and conditions.
A more comprehensive approach is known as GRC integrated risk management. This acronym refers to governance, risk, and compliance, consisting of several roles and responsibilities required to make such a program successful. Some examples include analytics and metrics, thorough internal auditing, communications efficiency and clarity, sharing critical information in a secure manner, and safeguarding sensitive data.
Why Do Organizations Need Integrated Risk Management?
Uncertainty and risk exist in all business markets and while uncertainty doesn't always pose a threat, identifying and responding to risks is essential to your organization's operational success. Poorly defined program objectives pose a risk to companies when the impact of an event would have an effect on multiple program goals and threaten to derail progress. Integrated risk management helps organizations bridge the gap that exists between their strategic vision and tactics.
When considering integrated risk management, you're not only trying to soften the impact of negative risk on your organization but also wish to increase the potential upside of positive risk. While a focus on project deliverables and deadlines is needed, many companies don't consider what benefits they're going to reap from their investments in the form of time and resources. By using an approach that evaluates the entire field and all potential outcomes, you don't just minimize your risk of failure, you also discover new opportunities that can propel your business to greater success.
Benefits of Integrated Risk Management
An integrated risk management framework, devised by your organization either on its own or with the help of an experienced security services provider, renders many benefits. Let’s explore several of these in more detail:
- Improved Performance Variables and Gains
Optimized agility, responsiveness, and collaboration as a direct result of an integrated risk management application makes life better for employees and employers alike. Various informed process refinements, protocol overhauls, and otherwise enable improved per-employee performance gains, encouraging more streamlined operations and effective recruitment. This also benefits task completion rates and other performance-related variables.
- More Effective Opportunity and Performance Assessments
One never wants to scope with a dirty or clouded lens. In fact, operational inefficiencies and various internal risks may throw up barriers to opportunities otherwise ideally suited for your business. For example, if you don’t meet all the compliance requirements in order to nab a prestigious contract, another competitor may be able to swoop in with all the boxes checked and take it. An integrated risk management program should be able to pick up on any of these red flags in advance, aiding in everything from making future deals to performing feasibility studies, carrying out assessments of departmental performance, and more.
- Quicker, Better-Informed Risk Identification, Isolation, and Mitigation
Actions speak louder than words, and in no circumstances is this truer when an internal threat rears its head. Your risk-aware management processes, training approaches, and various security safeguards should be able to leap into action and make short work of any violations. If any damage has been done, this may be a way to stop the bleeding, so to speak, preventing further risk to other areas of the organization.
In the event of a data breach, internal fraud, or outdated processes that carve out a hole in your cyber security – risking compliance to governing standards – you’ll be glad to have implemented proactive measures and brought the team up to speed on best practices.
- Optimal Resource Allocation and Streamlined Deployments
When noting improved performance variables and gains as one of the benefits of an integrated risk management solution, one shouldn’t overlook their tie to resource consumption. Allocation can be further optimized to save on costs and time without overburdening employees, leading to more streamlined deployments without compromising operating efficiency. The smarter and smoother you operate while maintaining an ideal approach to GRC, the more your organization will thrive with a risk-aware culture serving as its foundation.
What is an Integrated Risk Management Framework?
An integrated risk management (IRM) framework is a set of principles and strategies that acknowledges risks and explores technologies and processes that help your organization identify risk quickly and adapt as needed to a market that's constantly evolving. There are six key directives involved in an effective IRM framework.
Risk Assessment:
You need to be aware of whether uncertainty poses a risk to your organization and what the potential outcomes may be if facing adverse events. Risk assessment evaluates the current and potential risks to your organization and prioritizes them based on how much impact they could have on your ability to meet business objectives.
Strategy:
Businesses with an IRM identify key ways to increase productivity, limit mistakes and lead teams effectively. Leaders must acknowledge and own risk when deciding how best to govern and when handing down directives to corresponding team leads.
Reporting Risk and Uncertainty:
Keeping investors informed and aware of risks helps them understand why you've implemented programs intended to mitigate the impact of risk on your organization.
Response Implementation:
Identifying risks is only helpful when there's an established response mechanism in place. If you've encountered risks without a plan for handling them, your organization is at a disadvantage because competitors who've already planned ahead may be lightyears ahead in implementing their own risk strategies.
Monitoring Processes:
It's important to monitor your progress to ensure that your team is complying with your risk strategy at all levels, from team leads to individual employees. When monitoring your organization's risk response, you must determine ways to improve effectiveness and decision-making skills.
Technology:
As the landscape continues to evolve, you need to make sure that you're taking full advantage of the latest IRM solutions. You may need to perform tweaks or periodic redesigns of your IRMS architecture as new business needs and objectives arise.
How to Build an Effective IRM Framework
After you've performed a thorough risk assessment, you need to prioritize processes that pose the greatest risks to your organization should you experience a data breach or hack. While relying on security technology to close back doors and fix potential exploits is a strategy that all organizations use, your approach needs to start at the ground level. Assessing potential ways in which employees could unwittingly compromise data helps you implement protocols and procedures that minimize the risk of cybercriminals getting their foot in your door.
The first step in prioritizing risk is to evaluate how confidential each operational process is to determine how many points of contact a potential wrongdoer has to perform a breach. The next step is to consider just how heavily your organization will suffer if that function is compromised and the investment that's needed to fix the problem. The most costly and devastating risks need to take the highest priority.
You then need to implement a security department that's constantly monitoring your organization and ensuring that your teams are taking all of the appropriate steps needed to keep your data secure. New threats are constantly popping up, so your team needs to be able to disseminate information quickly and provide everyone in your organization with an effective plan of action whenever a new threat arises. It's important that once you implement new policies that you enforce them, holding employees accountable when they breach protocol.
Even the most thorough response plans have holes, so you need to monitor and track your progress to see where you need to improve. For this reason alone, it's important that all incidents are reported and you're aware of any individuals within your organization that continually disregard security protocols and pose a risk to your organization.
How can an IRM Process be Implemented by an Organization Successfully?
Your greatest asset is your people, so you need to involve all of your employees through the development of a risk-aware business culture. This can't be accomplished overnight and you need to take gradual steps to get everyone in your organization on board. Where you can begin is with team leads and influencers within your organization that are admired by their peers and have them pass the information along to the rest of their co-workers.
IRM is a proactive strategy, so your business decisions need to integrate risk mitigation at the highest levels. Each new strategic decision may open your organization up to risk, so you need to ensure that your leaders own the risks of their decisions.
You may find that some risk mitigation strategies are less effective than others, so make sure that your reporting is goal-based and focuses on clearly defined metrics. Data analytics can offer new insights that guide the development of more effective policies and responses over time. It's crucial that you streamline the reporting process so that people who are in positions to make needed changes to your strategy can access data quickly and glean the insights needed to affect real change within your organization.
Essential Integrated Governance of Risk Management and Compliance
The aforementioned benefits are a clear indicator that integrating an internal governance of risk management and compliance is crucial. As your organization grows, develops and uses new technologies, onboards and trains staff, and strategizes on optimal focuses, the need for internal guardrails of sorts will only intensify. It fosters a culture in which employees and executives follow steps, guides, and processes that don’t land them in hot water, also serving as a deterrent for intentional risks like fraud or data breaches from disgruntled workers. At the same time, the optimal GRC framework should remain aligned with your business goals rather than dictate what you can do, preventing your teams from being “boxed in.”
How Do Integrated Risk Management Softwares Benefits Businesses?
Software and support services like our dedicated IntegrityCounts compliance solutions function as a means of centralizing reporting and analytics, ensuring all levels of management are kept on the same page. It will be easier to identify, flag, and mitigate risks as they arise, from violations of established health and safety guidelines to breaches of legal obligations. Paired with an anonymous global hotline, you’ll be able to empower employees, encouraging them to use their voices to protect themselves and your business together by raising any issues that they uncover. This, paired with internal process and operating refinements, is an infinitely better option than sweeping risks under the rug and hoping that they don’t bite your business back.
On that note, if you’re wondering how to transform governance risk and compliance into an integrated risk management solution, consider reaching out to us at Whistleblower Security. We’re happy to walk you through the fundamentals of our framework services and answer any questions you may have. Contact us today to get started!
