Major manufacturers such as BMW and Toyota and Samsung have gone through torrid times after massive product recalls. In one recall, BMW almost went into administration. That is the price of not having effective GRC mechanism within the company. GRC stands for governance, risk management and compliance.
GRC refers to a system of setting corporate governance policies and ensuring that their implementation goes on smoothly. It can be as simple as introducing a quality control feature in a product pipeline or as complex as an organizational accountability program.
Here are the reasons why every company, big or small, needs a robust GRC program.
It Can Help You Keep Up With Regulatory Requirements
It will cost a company dearly if it does not comply with applicable laws. If the authorities don’t pounce on you, disgruntled customers and third parties will take your company to court. The cost of litigation and the subsequent fines can be intolerable.
If you inexplicably get off the hook, the negative publicity that follows your company is too much. In the trust economy, you will have very few customers who trust you.
Alternatively, you can follow all the applicable laws, internal and external, and be in good books with everyone. Customers will be confident that they can trust your methods. They will consequently trust your services. In return, your company will compete favorably in the market.
It Helps Companies Protect Its Secrets
Think about how companies such as Coca-Cola and Guinness manage to stay on top of their industries despite stiff competition. These companies have maintained trade and company secrets that drive their business every day.
To do that, they rely on a strong GRC strategy. The flow of information is specific to the target audience. There are no leakages in between the pipeline. These companies use this as a competitive edge. They continue to make huge profits thanks to that strict corporate culture.
It Helps Reduce Risks
The world is more interconnected today than it ever was in the past. That interconnection is an opportunity in itself, but it is also a risk. Cyber-crime, economic sabotage, global financial meltdowns, and such things are becoming common.
If the company does not have an internal control system that shields itself from micro risks, even macro risks will likely topple it over. For example, compliance with online regulatory requirements can reduce the risk of data breach and consequent losses. On the other hand, failure can expose the company to a customer data breach. Only GRC can ensure effective risk management.
Helps a Company Standardize Its Service Offering
Once a company identifies a satisfactory customer service product, it has to replicate it over and over to ensure success. Employees have to learn how to replicate winning formulas. If it is about the product, it has to be standard. You don’t want a repeat customer to feel shortchanged. In any case, the service would improve every time. This standardization is only possible if there is a deliberate effort to deliver on it.
GRC is not easy to deliver, but the rewards are diverse. Companies can make good use of available GRC software in the market to supplement their efforts.