In a dynamic landscape filled with evolving risks and regulatory responsibilities, the need to embed a robust control framework at the heart of Governance, Risk and Compliance (GRC) strategy has never been more critical. Ineffective control management can create unnecessary vulnerabilities, hampering an organisation’s ability to navigate challenges whilst improving operational efficiency, instilling the trust of its customers, investors and regulatory authorities.
Controls are widely considered to be the ‘backbone’ of GRC, playing a pivotal role in implementing governance structures, managing risks and ensuring compliance within an organisation. They act as the mechanisms through which governance is implemented, providing a means to enforce policies and maintain compliance with legal, regulatory and internal requirements.
From a risk perspective, controls are essential for identification, assessment and mitigation of risks, acting as preventive measures or corrective actions to reduce the likelihood of adverse events or to minimise their impact. They’re also indispensable for compliance efforts, providing the necessary checks and balances to validate that an organisation is operating within the bounds of legal and regulatory frameworks. Effective controls not only help prevent compliance breaches but also demonstrate commitment to ethical business practices, fostering trust among stakeholders.
“A well-designed control framework acts as a roadmap for implementing and monitoring controls that mitigate identified risks, reducing the likelihood of regulatory violations and associated penalties,” says Jon Tollerup, CEO at Decision Focus. “It supports a proactive stance towards compliance, enabling businesses to adapt to changing regulations and emerging risks more efficiently.
“By clearly defining the roles and responsibilities of various stakeholders, a control framework also ensures transparency, helping contribute to overall resilience by fostering a culture of risk awareness and accountability. Importantly, the framework allows for continuous monitoring and evaluation of control effectiveness, helping organisations to promptly identify and address gaps or weaknesses in their risk management processes.
“If controls are recognised as ‘indispensable components’ within GRC, businesses will be empowered to navigate uncertainties with resilience and agility.”
Jon’s view is echoed in the GRC 20/20 Solution Perspective, ‘Decision Focus, 360° Risk & Control Management,’ in which it is suggested that businesses that work to enhance maturity in their risk, compliance, and control management capability will benefit from being more aware, aligned, responsive, agile, resilient and efficient.
“Successful risk management requires the organization to provide an integrated risk strategy, process, information, and technology architecture. This helps to identify, analyze, manage, and monitor risk, as well as capture changes in the organization’s risk profile that impact compliance as they occur. Mature risk, compliance, and control management should be an integrated and relatively seamless part of the organization and its operations.”*
Gain leadership support
Board commitment and leadership buy-in is critical for establishing a culture of compliance and risk management throughout the organisation. Communicate the importance of the control framework to all levels, explaining its role in achieving strategic objectives, maintaining compliance and risk management.
Customise not ‘one size’
Ensure your control framework aligns with the specific needs, risks and regulatory requirements of your organisation. Involving key stakeholders from different departments to provide input will help to promote a sense of ownership and increase the likelihood of successful implementation.
Integrate with business processes
Rather than obstacles, controls should be perceived as enablers that enhance the effectiveness and efficiency of operations. Identify key control points within each business process and design controls that are both effective and efficient. And leverage automation wherever possible to streamline control execution and monitoring.
Train staff and raise awareness
Ensure that employees understand the purpose of the control framework, their roles in compliance, and the importance of risk management. A culture of awareness and accountability will be fostered by regularly communicating updates, successes and lessons learned in control management.
Continually monitor and evaluate controls effectiveness
Regularly assess whether controls are achieving their intended objectives and adjust them as necessary. Establish feedback loops for employees to report concerns or suggest improvements to the control framework. This encourages a culture of continuous improvement and adaptability.
Prioritise reporting
Develop key performance indicators (KPIs) and metrics to measure the performance of the control framework. This provides insights into the effectiveness of risk management and compliance efforts.
Regularly report on control performance to relevant stakeholders, including leadership, board members and regulatory bodies. Transparent reporting builds trust and confidence in the business’ commitment to controls.
Undertake regular audits and assessments
Conduct regular internal and external audits to assess the design and operating effectiveness of controls. Independent assessments help identify potential weaknesses and areas for improvement.
Use audit findings to refine and enhance the control framework, ensuring that it remains robust and adaptive to changing business needs.
Embedding a control framework effectively requires a holistic approach that involves people, processes and technology. Decision Focus brings all aspects of GRC together in one single no code platform with an interface users love. If you are looking to ‘assess and report on compliance controls and to identify gaps, create risk treatment plans, track remediation activity, and continuously monitor compliance’* and much more, get in touch now for a personalised demo.
*Delivering 360 Risk and Control Management (decisionfocus.com)