The Hidden Cost of "Check-box" GRC

We’ve all heard the phrases: “check-box compliance,” “paperwork exercise,” or “compliance theatre.” Too often, compliance is viewed as the end result, rather than a means to achieve business objectives. In this article, we’ll challenge that mindset and reveal why GRC is a strategic asset and a true enabler of business objectives.

What is "Check-box" GRC?

Now, what exactly does it mean to take a “check-box” approach to GRC? This occurs when an organization simply documents policies, conducts risk assessments, and tests controls, but without embracing the true intent or a mindset of continuous improvement. For example, compliance frameworks should be rooted in risk management, meaning organizations must understand their unique risks and align controls accordingly. In contrast, a “check-box” approach involves adopting minimum control requirements as-is, without tailoring them to the environment, bolting them onto existing processes, and auditing only as required.

How Organizations Get Stuck in a "Check-box" Approach

A “check-box” approach occurs when an organization focuses solely on achieving compliance outcomes (such as certification or authorization), rather than managing risk to business objectives. For start-ups, this can occur when pursuing an initial SOC 2 report, where the emphasis is on securing an enterprise deal rather than establishing sustainable controls. In enterprises, this occurs when GRC isn’t integrated with the broader security strategy and controls, and risks are viewed solely for compliance purposes, rather than for enhancing the overall security posture.

Since a “check-box” approach can be pervasive across organizations of any size, what factors contribute to this approach?

1. Tone from the top - Lack of clear support at the top of the organization on the criticality and importance of security and compliance in maintaining customer and investor trust.

   
   

2. Cost or resourcing constraints - Resourcing constraints that force short-term decision-making versus strategic investments to propel an organization forward.

   
   

3. Time - Speed is prioritized over quality or sustainability.

   
   

4. Lack of awareness - Lack of insights into the shortcomings of taking a “check-box” approach and the impact that this has on an organization.

   
   

5. Competing priorities - Priorities focused on what’s immediately in front of you versus laying the groundwork for future success.

The Unintended Consequences

When a GRC program adopts a “check-box” approach, the effects might not be immediately apparent, but will certainly become clear over time. This can surface as:

A crumbling foundation - Fragile processes that are cratering under the weight of the demand for adding new frameworks and new regulations, which are dependent on the same set of underlying controls. The controls become brittle and break over time, exposing the weak foundation. It becomes increasingly difficult to onboard new compliance frameworks as the teams and processes struggle to support the increased demands. The impact is missed revenue opportunities due to the organization's inability to accelerate growth and quickly meet new compliance requirements.

Cracks in the walls - When controls aren’t integrated into business processes or automated, they will inevitably start failing and create cracks in your compliance outcomes as control failures occur and become visible to end customers, investors, and the board. This could result in reputational or financial implications.

A leaky roof that goes undetected - Without ongoing control monitoring or testing, the GRC program operates blindly. A critical control could not be operating correctly, and it would go undetected until an external audit. By this point, it’s too late to proactively remediate the issue, resulting in unfavorable audit outcomes impacting customer and investor trust.

The consequences accumulate, ultimately resulting in a significant loss of trust and slowing growth. Gradually, the organization is left with a neglected foundation badly in need of repair.

Shifting the Approach

Change your mindset: view GRC as an investment that enables business outcomes and builds trust with customers, investors, and the board. Taking a strategic approach to GRC requires time, but these efforts will ultimately propel an organization forward, accelerating future growth. Do this through:

Controls embedded in processes that scale - Integrate controls into processes. Use automation to embed controls into existing processes and build in checks and guardrails in the CI/CD process to ensure compliance before workloads are deployed into production

Adopt continuous monitoring - Implement tools and automation to enable continuous monitoring and ongoing evidence collection to gain insights into control effectiveness. Take a proactive approach to monitoring and managing control effectiveness to increase compliance efficacy and inform continuous risk management.

Integrate risk into decision making - Clarify the business’s accountability in accepting security risk and frame security risks in terms of business impact. Proactively identify and surface emerging risks to stay ahead of potential threats facing the business. Elevate security risk into key decision-making at the leadership and board level, tied directly to business outcomes.

Mature governance and oversight - Establish clear roles and responsibilities for security. Define the organization’s minimum requirements for managing risk and meeting compliance obligations, and document these in security policies and standards. Establish KPIs to measure the performance of the security program and KRIs to monitor risk thresholds. Utilize clear upward communication to leadership and the board tied to business objectives to articulate the security program’s impact on the organization’s goals.

Shift the narrative - Clearly communicate the revenue impact and business growth supported by a strategic GRC approach. Help leadership view GRC as a sustainable trust signal that fuels enterprise customer, board, and investor confidence, rather than just a box to check.

Impact of Strategic GRC

Taking a strategic approach to GRC creates a solid foundation that protects revenue, brand, and reputation and can scale with the increased demands of customers and regulations. It not only withstands external pressures but also enables growth with confidence, providing sustainable trust to customers, auditors, and investors.

An organization that demonstrates a strategic GRC approach sends a clear message: We are prepared for growth, we protect value, and we can scale responsibly.

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Don’t settle for a “check-box”approach. Connect with our advisor to transition your organization to a strategic approach to GRC, ensuring sustainable trust and enabling growth.