Libby Bevin

In the spring of 2020, organizations around the globe suddenly had a new reality: Stay-at-home orders meant that they had to shift their operating models overnight to accommodate employees, customers and suppliers working remotely.

The digital transformation many companies had planned over a period of years now had to happen in a matter of weeks or days. Respondents to a McKinsey survey published in the fall of 2020 say their company implemented key changes 20 to 25 times faster than expected.

Once the crisis abated somewhat, two things were clear. First, the changes implemented during the pandemic would be more or less permanent, and second, the threat surface was much larger than before the pandemic due to the increased number of remote workers on laptops, tablets, and phones. In fact, more than three in four (77%) respondents to EY’s 2021 Global Information Security Survey say that they’ve seen an increase in the number of disruptive attacks, such as ransomware, over the last 12 months. Yet in the consultancy’s concurrent survey of corporate boards, just 9% declared themselves “extremely confident” that the cybersecurity risks and mitigation measures presented to them can protect the organization from major cyber-attacks.

Organizations around the world must all close this gap. But where to begin? If you have a compliance program, you are off to a great start. This white paper will show you how your information security program provides a foundation for a sophisticated and effective IT risk program.

The Top Three Challenges that Security Leaders Face Today

In a 2021 survey of CIOs, respondents cited numerous challenges that made their governance, risk and compliance (GRC) efforts difficult in today’s environment. Three in particular keep them up at night.

1. Limited resources (42%). Responding to risk is resource intensive. Few organizations had all the resources and budget necessary to adapt to changes that the pandemic response required. While budgets may well grow in the face of greater board and C-suite risk awareness, these security leaders recognize that they must eliminate inefficiencies and time wasted on manual tasks. These included creating new content, scoring and re-scoring risk, gathering evidence of controls, and tracking and reporting risk and compliance posture.
2. New or changing regulations (19%). The global compliance environment is becoming increasingly complex. Entirely new areas, such as data control and privacy, are growing in significance. And as organizations expand into new geographic markets, they face fresh new regulations. Businesses need to make sure that they’re on top of compliance and that they’re managing risk so that nothing critical falls through the cracks.
3. Tracking and maintaining compliance (15%). Finally, greater volume and complexity of compliance makes it increasingly difficult to manually create, assign, and gather evidence to demonstrate that controls are designed and operating effectively against compliance requirements.

Many organizations face all three challenges simultaneously, exacerbating an already difficult calling to effectively manage information security, risk and compliance.

Leveraging risk management principles drives better security because putting more resources toward reducing the highest risks more effectively safeguards business data and assets. The tools and automation involved can substantially ease the burden of managing this information and related activities. In addition, a risk management approach builds trust among customers and business partners, ultimately supporting your go-to-market initiatives.

How to Build an Effective Risk Program Rapidly

As your compliance demands expand and become more complex, it’s hard to prioritize where to invest resources to respond to growing requirements. A better information security program moves on from “check-the-box compliance” to thinking more about risk and business context. That includes how compliance activities impact the broader organization and its strategic direction and goals.

Step 1: Start with Compliance to Build a Risk Management Program

In a compliance program, controls are simply pass-fail. When the organization is “in compliance,” it has met the minimum requirements under its obligations. But being able to say “we’re compliant” is not the same as understanding to what extent implemented controls have effectively reduced the underlying risks. Compliance programs can be the foundation for establishing effective risk management with just a little more effort.

Taking a risk-centric approach requires asking these additional questions:

• Are controls effective?
• Do controls also contribute to achieving operational goals?
• Do controls help reduce risk?

To begin building a risk program, start with the controls. Recall that controls and risks are two sides of the same coin. Controls are just risks written from an opposite perspective. So, flip around the language of the controls and begin to uncover the underlying and related risks the controls are reducing. The result of this exercise will be a risk registry that you can further refine, categorize by business objective, and prioritize risks to bring them within acceptable limits.

Let’s take a hypothetical example. Say a security policy requires users to create an eight-character password containing upper and lower case, numbers, and symbols. What is the risk behind this requirement? It’s that a brute-force or other attack will be able to unlock a password and gain entry to your organization’s systems.

By identifying the underlying risk, you can better understand how well this control addresses it and what actions are next (extend the length, limit login attempts, etc.) to lower the risk to an acceptable level.

Step 2: Build a Better InfoSec Program

A risk registry is a good starting point, but it’s only the beginning. Standard registries focus broadly on all the things that can go wrong. Looking at risk from a holistic perspective is too broad and not really actionable. Different aspects of the organization may require different registries, scoring methods or both. Your organization needs to see exactly what is impacting its compliance and risk posture. Therefore, you must identify, assess, and monitor risk at a more granular level, such as by business priority or objective.

In addition, the relationships among requirements, controls, risks and threats are critical. If something happens in one area that impacts another (e.g., control failure increases the residual risk of the related business process), risk owners must be aware of the changes so they can take appropriate actions. Your organization should monitor risks and controls on a continuous basis, and exchange information among IT security, IT risk, IT compliance, and business owners.

InfoSec leaders need to focus more on risk implications within the business-driven context when making strategic decisions on information security and compliance.

Here’s how to do that:

• Focus on existing business activities: Consider your operations and processes, and consider how each one incurs risk.

• Stay on top of risk: Once fully prioritized, your risk registry can guide your monitoring approach. Reserve continuous monitoring for your higher risks and key threats and controls.

  For lesser risks, periodic or occasional monitoring may suffice. Look for a solution that offers a consolidated view of relevant risks, controls and threats. In addition, the solution should automate the exchange of information (status, weighting, scores, etc.) among stakeholders to enable full-time and continuous monitoring of the organization’s risk posture.

• Share information seamlessly: Controls sit at the center of this data-sharing. Exchanging information between risk and compliance will bolster both functions in support of business priorities.

Step 3: Think Strategically

The next level of maturity in a risk management program is to evolve from compliance tactics to risk strategy. Compliance measures the controls that are in place already, whereas risk management considers where the organization wants to go and what decisions it must make to get there. Risk focuses on understanding the risk implications of various investment options to minimize risks and be in a better position to succeed.

Because of its strategic stance, successful risk management requires buy-in at the executive level, as well as a place at the table for security executives during strategic decision-making. Considering risk once a decision has been made (or worse, executed) is simply too late.

The strategic level is also where the organization determines its risk appetite – that is, which risks it is willing to accept to achieve its goals and which ones it is not. This is a subjective judgment, of course, and the organization’s leaders must determine what makes sense in the context of strategic and operational priorities. A tech startup will likely accept greater risk than an established financial institution, for example. Here are the questions to ask to gauge risk appetite:

• What is the opportunity before us?
• What risks does it create? What risks is it subject to?
• What investments are necessary to bring that risk down to an acceptable level?
• Is that cost significantly less than the opportunity?

If the answer to the last question is “yes,” then the organization is better positioned to pursue the opportunity. If not, you must find other ways to reduce the risk or simply move on.

Step 4: Implement the Program

The No. 1 reason to have a risk management program is to enable better decision making that avoids unnecessary risk, mitigates business exposure, protects valuable information, and optimizes information security. Decision makers and executive teams seek to understand what their compliance and risk postures are, so they can make better operational and strategic decisions. To achieve that goal, security leaders should work with stakeholders to implement a risk program, starting with deliberate planning.

Here are the five key stages of risk program implementation:

• Planning. As we’ve discussed, compliance and governance structure is the best place to start. What components of these can you leverage for a risk program? What kind of structure should you use? Consider the compliance and security programs already in place.

  How can you use these to build a formal risk management program quickly, without starting from scratch? What existing communication channels can you use to talk about risk to get everyone on the same page? And finally, what will governance and oversight look like? If a compliance or governance committee is in place, can it just expand its scope to include risk management?

• Involvement. InfoSec leaders are already performing security awareness training across the organization with the message that security is everyone’s responsibility. This is an ideal opportunity to introduce the concept of risk and share materials on risk management practices, risk and vulnerability identification, and concepts around remediation. The new message: Risk is everyone’s responsibility.

• Identification and analysis. As noted above, risks should align with the business processes and objectives that create them. Beyond that, define IT risk program structure, common language, and scoring methodology. Then, communicate them across the organization in order to evaluate and score risks consistently and within the appropriate business context.

• Remediation. As you identify and analyze risks, what gaps exist? Apply the guiding principles [see sidebar] to evaluate gaps and opportunities for remediation. Perhaps a control isn’t in place, or it’s not operating effectively. Set a target risk score and work to close the gap between the inherent risk and the target risk.

• Preparedness. Even if you do your best to manage risks, there’s always the chance that a risk event will occur. Preparing your organization with business continuity planning and disaster recovery exercises as part of compliance programs will put you ahead of the game.

Driving business results with a strategic approach to risk

Every business activity involves risk, so simply viewing and measuring risk at a high level is not enough. You must also identify and categorize risks as they relate to individual business activities and the context around them. Managing risk is all about delivering insights so that executives and the board can better understand their IT risk posture and use that knowledge to make better decisions.

The Reciprocity Product Suite delivers a single, real-time view of risk in context of your business activities empowering security teams and business teams with the actionable insights needed to avoid and mitigate risk and optimize information security.

Using an AI-powered approach, the Reciprocity ROAR Platform unifies your organization’s risk observation, assessment, and remediation activities with a single, real-time view of risk and compliance in business context. It offers actionable insights so you can focus resources on reducing the risks behind your organization’s critical strategic objectives and achieve positive outcomes.

Contact us today to learn more about the Reciprocity Product Suite and the Reciprocity ROAR Platform.

Security and risk management (SRM) leaders are under increasing pressure to both reduce risk and demonstrate and communicate the value, effectiveness, and maturity of their security program to a broad range of stakeholders with differing and evolving expectations. This includes board members who, after years of receiving quarterly reports on cybersecurity, are now asking for improved reporting on the value of security programs that provides them with a deeper understanding of their current risk posture and areas of higher risk.

Providing actionable risk insights has been difficult if not impossible for InfoSec teams, as this level of visibility isn’t realistic with the single risk register approach offered by traditional Governance, Compliance, and Risk (GRC) and Information Technology Risk Management (ITRM) tools.

But that all changes today — with Reciprocity’s new product suite built on the Reciprocity ROAR Platform.

Reciprocity ROAR Platform

The Reciprocity ROAR Platform is a game-changer, introducing an entirely new approach to IT risk management by breaking down the silos between compliance and risk and providing a real-time view of risk within the context of business activities that empowers InfoSec teams with the actionable insights they need to avoid and mitigate risk and optimize security.

The Reciprocity ROAR (Risk Observation, Assessment, and Remediation) Platform enables companies to create cyber assurance programs around critical business processes, assets, or initiatives. This provides the flexibility to choose the right mix of frameworks, risk registers, scoring methodologies, and vendor scores to get a specific and accurate risk assessment to help guide strategic decisions. The result: organizations can more easily and efficiently protect their most valuable assets, quantify the value of security investments, accelerate business initiatives, and effectively inform leadership on the levels of risk and improvements.

Insight + Intelligence + Automation

The Reciprocity ROAR Platform combines insight, intelligence, and automation to deliver a unified user experience while reducing complexity and driving efficiency. Using an AI-powered approach, the platform integrates IT and cyber risk activities, providing clear context into your risk posture. Continuous monitoring of your controls helps you stay ahead of threats by keeping your team connected and informed through proactive notifications.

The Platform delivers prescriptive guidance to help you select the right mix of requirements and pre-loaded content, within a single, unified solution. The result is optimized evidence, control, and data re-use which reduces the complexity and resources required for your effective risk management.

The Platform’s AI engine automatically builds relationships among business assets and processes, controls, and risks to intelligently deliver automated risk posture as well as maximize re-use, while continuously monitoring for any changes that can negatively impact that risk posture and delivering recommendations for treatment plans. Workflows within the Platform are automatically initiated when your programs are defined, and integrations to leading business systems provide automatic information access. This pervasive automation enables you to take effective action fast, driving efficiency and maximizing your team’s talent.

Powerful Cyber Risk Applications

The Reciprocity ROAR Platform powers the company’s new suite of advanced risk and compliance applications to deliver integrated building blocks for cyber assurance programs.

The Reciprocity ZenComply application strengthens the role of compliance in your security program, providing a fast, prescriptive, content-rich experience that brings together expert guidance, automation, and intelligent collaboration. The AI-powered backend maps 10,000+ content objects across frameworks, threats, and risk registers, automating calculations and building key relationships.

The Reciprocity ZenRisk application provides actionable insights within the context of your business priorities to help you effectively avoid and mitigate IT and cyber risk. With expert-provided content, predefined scoring methodologies and mapped controls, risk and threats, along with continuous scoring of residual risk, your team can stay ahead of threats and prioritize activities to drive business results while optimizing security.

Actionable Insight

Unlike typical risk solutions that only provide a single, high-level view of risk, the ZenRisk and ZenComply applications use the ROAR platform to provide two levels of actionable insight, the overall risk posture of your business and detailed risk insight at the business program level. At the program level, you can take direct action on what is increasing or decreasing your exposure and understand how changes in one aspect of your business may impact others that share controls and risks.

With dual-level insights, you can communicate risk in business context with the details at hand, to make smart decisions that reduce exposure, protect your information and secure your business.

To learn more, don’t miss our upcoming webinar: Effective InfoSec Begins with “Reciprocity” Between Compliance & Risk.

As organizations increasingly shift to digital business models and expand their remote workforces, they’re being faced with a growing wave of security threats – including cyberattacks. In response, risk management is evolving and the role of CISOs is changing, as they can no longer focus solely on IT security.

CISO’s responsibilities are broadening to include everything from safeguarding data and dealing with disruptive events to managing third parties, handling regulatory compliance, and helping to counter cyber threats. Yet at the same time, they must become more strategic, speaking the language of the C-suite to help build understanding – and give advice – around the cyber implications of business decisions.

CISO’s need to take a proactive approach to business activities and their impact on risk.

Every business activity involves risk, so prioritizing risk is critical. Compliance controls provide a good first step, but they aren’t sufficient on their own. Information silos between compliance and risk management systems make it difficult, if not impossible, for InfoSec teams to understand what is increasing risk and how it impacts business activities as well as the business overall.

Identifying and categorizing risks as they relate to business activities is critical to understanding, quantifying and reducing those risks. What’s needed is a real-time, unified view of both compliance and risk that helps guide decision making and makes it easier for CISO’s to communicate with key business stakeholders – and Reciprocity is here to help.

We’re working on some exciting new innovations that will simplify the journey from compliance to effective information security by breaking down these silos, and providing InfoSec teams with a unified view of risk and compliance that will help guide decision making.

Don’t miss our webinar on March 16th to learn more: Effective InfoSec Begins with “Reciprocity” Between Compliance & Risk.

Internal controls are designed to protect an organization from fraud, loss of assets, compliance failures, and other obstacles to overall business objectives. After the time, money, and effort you spent implementing a system of internal controls, you certainly don’t want that system to fail.

The best way to assess the effectiveness of internal controls is through internal audit control testing.

What Is Internal Audit Control Testing?

Internal audit control testing aims to improve operations, financial reporting, and compliance by evaluating the effectiveness of the internal control system. An auditor uses a series of assessment techniques to gather a complete understanding of control procedures.

For example, using a risk-based approach to audit testing, an auditor can focus on areas where risk is more likely to occur, identify areas of concern or weakness, and make recommendations to improve the internal controls. This exercise assures that the organization can reap the full benefits of internal controls.

Let’s look at the fundamentals necessary for a successful auditing process.

What Are the Advantages of an Internal Control System?

Some advantages of internal controls are:

• Only a few, trusted senior-level workers have the ability to modify internal controls. It’s easier to keep track of and guard against abnormalities when fewer persons are engaged.
• Well-designed and executed internal controls increase efficiency by making transactions transparent to anyone who looks.
• When internal controls balance transparency and promote efficiency, they protect employees from accusations of irregularities or misappropriation of funds.
• Internal controls make the organization process-driven rather than people-driven, reducing the risk of too much dependence on specific key employees.
• Internal controls can identify redundancies in operating and compliance procedures, giving you opportunity to simplify operations.
• Internal controls can be an early warning system, enabling early identification and correction of deficiencies (that is, before external, regulatory, or compliance audits).

What Are the Five Steps to an Audit?

Auditors can vary their overall audit approach, but the fundamental structure of the audit process remains the same. There are five stages necessary for a successful internal audit.

Stage 1: Selection

During the selection phase, the overall objective and scope of the audit are determined. After conducting a risk assessment, specific audit activities are outlined and approved by an audit committee.

Stage 2: Planning

The auditor meets with management, department heads, or supervisors to discuss the scope of audit procedures, relay audit timelines, and gather all necessary background information, including findings from prior audits.

Stage 3: Fieldwork

Also called the execution phase, fieldwork is the physical on-site audit work. The auditor may:

• Investigate the overall control environment;
• Interview random employees and managers;
• Review financial information;
• Inspect legal documents;
• Review policies and procedures manuals;
• Examine information technology systems;
• Perform walkthroughs of certain business processes;
• Distribute surveys regarding control activity requirements for specific job duties;
• Perform tests of controls (we discuss the specific procedures used to perform tests of controls in the next section).

Throughout the entire phase, the auditor communicates with management to relay preliminary findings.

Stage 4: Reporting

The auditor compiles all observations and findings, including recommendations of methods to improve the operating effectiveness of controls. Management reviews the conclusions and is asked to respond to requests in an action plan. These responses are included in the final audit report.

Stage 5: Follow-Up

Within a year of issuing the final audit report, the auditor conducts a follow-up audit to determine progress made on the action plan. If necessary, additional internal audit control testing is completed.

How Is Internal Audit Control Testing Done?

Following generally accepted auditing standards (GAAS), an auditor evaluates an organization’s control procedures. As a result of the Sarbanes-Oxley Act (SOX) in the United States, internal controls over financial reporting receive significant attention during internal audit control testing.

The auditor collects sufficient audit evidence to conclude whether an organization’s financial statements are clear of material misstatements. Then, to substantiate that assertion, the auditor conducts a test of controls.

The Four Categories for Test of Controls

To verify operational efficiency and effectiveness of internal control processes, an auditor uses a variety of testing methods:

1. Inquiry. Ask staff to describe verbally how a control activity is performed.
2. Observation. Observe a control procedure as it is physically performed.
3. Inspection. Examine documents as physical evidence that a control procedure was performed.
4. Re-performance. The auditor initiates a transaction and re-performs the specific steps of the control activity to judge the effectiveness of the control.

Suppose audit evidence leads the auditor to believe there are possible risks of material misstatement in the organization’s financial statements. In that case, the auditor may increase the sample size and employ tests of details to verify the reliability of financial reporting. When errors are discovered in an audit, the auditor will issue findings that require corrective action.

What Are the Six Principles of Internal Control?

These principles are the basis that management uses to create and implement the internal controls it establishes. In other words, they are the critical components of an effective internal control system. Leadership must apply these concepts to their particular business.

Establishment of Responsibility

Assigning authority and responsibility are essential to driving accountability. A clearly defined organizational structure helps stakeholders understand who leads each team and illustrates an escalation path.

Segregation of Duties

Clearly defined responsibilities and limits of authority are defined in the segregation of duties. “SoD” provides checks and balances to catch errors. Segregation of duties also ensures that no single person has too much power to perpetrate fraud. For instance, responsibility for maintaining an asset’s records in the accounting system should be separate from the physical custody of the asset.

Physical Control

Physical control refers to safeguarding assets and improving the accuracy of records. It is a preventive control that attempts to deter or prevent undesirable events such as theft or damage.

Documentation Procedures

Control systems should require that employees promptly submit source documents for accounting entries to the accounting department. This control measure helps to ensure the timely recording of transactions.

Independent Internal Verification

Companies should verify records on a regular or ad hoc basis. An employee who is not part of the team in charge of the data should double-check. An outside eye provides objectivity and reduces bias. Exceptions and discrepancies should be notified to a level of management that can take corrective action.

Human Resource Control

Human resources policies and procedures inform the employees about expected integrity, ethical behavior, and competence. Human resource policies also drive other internal controls such as rotating employee duties, requiring employees to use vacation time, and conducting thorough background checks.

Integrate ZenGRC in Your Internal Controls Plan

Overall, internal audit control testing is a form of risk management. When internal auditors help find and correct weaknesses in an internal control system, an organization is better for it.

Of course, even a solid auditing process is subject to human error. ZenGRC software streamlines the internal audit control testing process by keeping tabs on issues and flagging potential control risks.

With all of your information housed in a single cloud-based space, you can manage and automate your controls effectively and efficiently, leaving your employees more time to move your company forward. ZenGRC also offers easy reporting, making external and internal audits less painful.

Schedule a demo today to learn more about how ZenGRC can help your business with internal controls.

Regulation of corporate activity is increasing around the world, forcing boards of directors and senior management to take an active role in all matters of the company’s business- and especially in compliance with the law and industry regulations.

Distinguishing risk management from compliance may not seem relevant to some businesses, but the two are most certainly not the same. Understanding the distinction can mean the difference between simply avoiding risk and creating tangible value.

Of course, risk management and compliance are inextricably linked: organizations can protect themselves against numerous risks by following rules and regulations. In contrast, the risk management process helps protect organizations from threats that could lead to non-compliance, which is risk unto itself.

“Compliance” in business means adhering to regulatory guidelines and internal policies. For example, a components supplier or fabricator might need to certify or acknowledge that it complies with generally accepted laws, rules and regulations, or standards applicable to the supplier’s industry or where it does business.

An organization can have a robust risk management program without regulatory compliance, and vice versa. That said, compliance programs and risk management programs both help companies to maintain stability and integrity on multiple levels, which prevents risks to the organization’s legal liability, financial position, and physical assets.

What Is Compliance?

Compliance activities help a company adhere to a set of rules, regulations, or requirements. We can divide the term “compliance” into two categories:

• Regulatory compliance, which are the organization’s actions to comply with applicable laws, regulations, and external guidelines.
• Corporate compliance, which refers to the measures and security programs to guarantee that internal policies and procedures are followed.

Every organization should appropriate policies and procedures to meet compliance obligations in a timely manner. Furthermore, an organization should also have robust information security and a detailed record-keeping system to document those compliance activities.

Companies that fail to comply with codes of conduct, internal policies, best practices, and industry-related laws and regulations are exposed to compliance risks. These risks include regulatory enforcement actions, complete with expensive legal costs and possible monetary penalties; economic losses; lost customers and business partners; and more. Corporate reputation can also suffer during a compliance failure, too.

The core elements of an effective compliance program are summarized as follows:

• Designated compliance officer and compliance committee
• Standardized business practices
• Internal audits and controls
• Risk assessment
• Training programs and communication
• Internal monitoring, auditing, and response

What Is Risk Management?

Risk management is the process of identifying, assessing, and managing potential threats that could damage the organization’s ability to achieve its business objectives. These risks come from various sources, such as financial uncertainties, legal liabilities, technological problems, strategic management errors, accidents, and natural disasters.

A comprehensive risk management program enables a company to analyze all the hazards it might face. Risk management also looks at the link between risks and their influence on an organization’s strategic goals.

Enterprise risk management (ERM) also emphasizes the importance of managing positive risks. Positive risks are opportunities that can improve a company’s value. Any risk management program’s purpose is not to remove all risks, but rather, to preserve and create value by allowing executives to make informed risk decisions.

A company must identify potential risks before they can harm the business. Identifying potential risks makes it easier for the organization to take appropriate action to prevent them from occurring. This is also known as risk response.

Understanding risk is also crucial for project management because every new project brings new risks. An organization can identify project strengths, weaknesses, opportunities, and threats by developing an effective risk management strategy.

The following steps make up the overall risk management process and are followed by risk management plans:

• Determine the context. The organization needs to understand the context in which the rest of the risk management process will take place.
• Risk identification. The organization has to identify and define the potential risks that could adversely affect a particular process or project.
• Risk analysis. Risk analysis aims to improve the understanding of each specific risk and how it could affect its projects and objectives.
• Risk assessment. This allows the company to decide whether a risk must be prevented, mitigated, or willing to accept it based on its risk appetite.
• Risk mitigation. This phase includes risk mitigation processes, risk prevention tactics, and contingency plans to manage risks if they occur.

A company that plans for potential risks will respond more quickly to those potential risks. Successful project managers understand that risk management is vital because success depends on planning, preparation, results, and evaluation.

What Are the Similarities and Differences Between Risk Management and Compliance?

Risk management and compliance are linked in the following way. Risk management helps a company to address risks that might threaten its ability to achieve business objectives – and maintaining regulatory compliance is one of those objectives, just like hitting financial goals or reporting corporate performance to stakeholders. So compliance programs are a subset of risk management programs.

A robust risk management strategy, then, will allocate resources to compliance plans and processes while continually managing compliance risks. By investing in a comprehensive risk management plan, businesses can avoid the problems of dealing with non-compliance issues.

Their differences are noteworthy because compliance and risk management operations require distinct methods and execution strategies. Here’s how to contrast risk management and compliance:

Prescriptive vs. Predictive

Compliance is prescriptive and generally results in a more tactical, check-the-box approach. Risk management activities try to be predictive, anticipating risks; and require a strategic approach.

Organizations must comply with existing laws and regulations to be compliant. Risk management, on the other hand, must be more proactive.

Tactics vs. Strategy

Since non-compliance can result in costly fines and penalties, as well as reputational damage, it should not be underestimated. Compliance, however, requires more of a testing approach to assure that your organization obeys the rules. Risk management should rely more on long-term analysis to determine which risks are worth taking.

Risk Aversion vs. Value Creation

Compliance with rules and regulations rarely translates into value-generating business propositions without the long-range risk management approach. Compliance often stops at verification to avoid risk. Risk management can transform compliance into a winning value proposition, by building up a company’s ability to navigate demanding regulatory environments. That can make the company a more attractive business partner to others, also worried about navigating demanding regulatory environments.

Siloed vs. Integration

A siloed compliance department or isolated initiatives across various departments are frequently the driving forces behind compliance.

Effective risk management programs, on the other hand, cannot work in silos. You must integrate procedures, departments, and IT systems to evaluate the entire risks inside a business and manage them to prevent their consequences or generate value.

Simplify Your Compliance and Risk Management with ZenGRC

If you want your innovative risk management process and compliance policies to succeed, you can’t rely on outdated techniques such as spreadsheets. ZenGRC is an integrated software platform that can help you create and maintain your ERM program.

By combining all records, reports, policies, procedures, and checklists in one location, ZenGRC creates a single source of truth. Automation and reporting capabilities provide easy-to-understand data analysis and graphs. These tools clearly explain your risk profile and help you prioritize risk and compliance management initiatives.

The ZenGRC SaaS platform is an efficient solution for ongoing compliance. Companies don’t have to worry about their compliance posture because ZenGRC monitors it throughout the entire lifecycle and keeps up with the latest regulations and data protection requirements.

Schedule a demo to learn more about how ZenGRC can help your company simplify your compliance and risk management policies.