Why is policy management integral to governance, risk and compliance?

Warren Green
Governance, Risk and Compliance Expert
CURA Software Solutions

Policy Management is critical to any organisation as policies and procedures establish boundaries of behaviour for individuals, processes, relationships, and transactions.

By definition, Governance, Risk and Compliance is “a capability to reliably achieve objectives [governance] while addressing uncertainty [risk management] and acting with integrity [compliance].” As such, a well-established and maintained set of policies is fundamental to a successful GRC framework implementation as they lay the groundwork for compliance and assist in minimising risks.

A well-managed Policy Management system aids an organisation in:

Providing a Framework for Governance

Governance can be defined as “the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined”, thereby providing a sense of consistency and accountability within the organisation. The policy establishes the basis of behaviour, values, and ethics that define organisational culture. Without efficient policy management, this culture can bend, shift, and deteriorate over time. along the way. A policy management system also means that all stakeholders attest to, understand, and are committed to maintaining the organisational structure.

Identifying and Mitigating Risk

The existence of a policy means a risk has been identified and is significant enough to necessitate a formal policy which details control to manage the risk. Risk management is the process of identifying, assessing, and prioritising risks, as well as creating a plan to minimise the impact of risk events. Having a well-managed set of policies allows a business to be proactive, rather than reactive when it comes to risk management.

Defining Compliance

Policies are a means of documenting compliance and how an organisation meets requirements and obligations with integrity. This means adhering to stated requirements while maintaining the values, ethics, commitments, and social responsibility of the company.

According to Warren Green, a Governance, Risk and Compliance expert from CURA Software solutions, mismanagement of organisational policies can introduce liability and exposure, and noncompliant policies can and will be used against the organisation in both legal and regulatory proceedings.

“An organisation must establish policies that it is willing to enforce — but it is also the organisation’s responsibility to communicate the policies effectively to all employees understand what is expected of them. A corporation cannot hope to achieve a strong and established culture without good policy and organisation-wide buy-in. It is also no good for a policy document to be drafted and then distributed to employees as a once-off. Policies need to be living documents that get reviewed, approved, distributed and then measured and tested. Those policies, SOPs or Work Instructions can then be used as reliable mitigations for risks.”

Edited by Neo Sesinye
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