Governance, Risk, and Compliance (GRC) is not just a regulatory checkbox, it’s a critical framework that protects organizations from financial losses, reputational harm, and operational disruptions.
With regulations like GDPR ( General Data Protection Regulation), CCPA (California Consumer Privacy Act), and industry-specific rules constantly evolving, a robust GRC strategy ensures your organization remains compliant, agile, and resilient.
Despite this, many companies falter, turning what should be a strategic advantage into a costly burden due to common missteps.
This article dives into the top 10 GRC compliance mistakes businesses make and provides practical, actionable solutions to avoid them. Understanding and addressing these pitfalls can transform your GRC efforts into a competitive edge.
Let’s explore each mistake, why it matters, and how to fix it.
What Is GRC?
Before we dive in, let’s clarify what GRC entails:
- Governance: Directing and controlling your organization’s operations and strategic decisions.
- Risk Management: Identifying, assessing, and mitigating threats that could derail your objectives.
- Compliance: Adhering to laws, regulations, and internal policies.
When these elements work together, GRC shields your business from chaos. When it falls apart, consequences can range from fines, legal battles, and lost trust.
Here’s how to get it right.
Top 10 GRC Compliance Mistakes (And How to Avoid Them)
1. No Unified GRC Strategy
Why it’s a problem: Many organizations treat governance, risk, and compliance as separate silos. IT might prioritize cybersecurity, finance focuses on audits, and HR deals with employee policies; each unaware of the others’ efforts.
This fragmentation leads to duplicated work, inconsistent priorities, and blind spots where risks slip through unnoticed. Without alignment, it’s nearly impossible to spot emerging threats or respond cohesively when issues arise.
Consequences: Misaligned strategies can result in compliance failures, increased costs from redundant efforts, and missed opportunities to use shared data for smarter decisions. For instance, a company might pass an audit but still face a data breach due to unaddressed IT risks.
Fix: Create a unified GRC strategy that ties all departments to shared business goals. Start by mapping out how governance policies (e.g., decision-making protocols) support risk management (e.g., threat identification) and compliance (e.g., regulatory adherence). Break down silos with cross-functional collaboration, ensuring everyone works from the same playbook.
Tools and Resources:
- ServiceNow GRC: Centralizes data, automates workflows, and offers real-time dashboards for team alignment.
- MetricStream: Provides a single platform integrating risk, compliance, and governance activities.
- Retriever: Automate your process of retrieving laptops from remote employees with Retriever, ensuring that your company assets and data are not left unaccounted for.
2. Ignoring Regulatory Changes
Why it’s a problem: Regulations aren’t static. Laws like GDPR and CCPA evolve, and industry-specific rules shift with new standards or enforcement priorities. Companies that fail to monitor these changes often find themselves reacting too late and scrambling to update policies after regulators knock on the door. This reactive stance leads to rushed, incomplete efforts that leave gaps.
Consequences: Delayed compliance can mean millions in fines (GDPR penalties can reach €20 million or 4% of annual revenue), legal battles, and reputational damage from public scrutiny.
Fix: Build a proactive system for tracking and responding to regulatory updates. Assign a point person or team to monitor changes, assess their impact, and adjust internal policies before you’re caught off guard.
Don’t stop at awareness. Have clear processes in place for handling compliance requests, like data deletion under GDPR or CCPA. This guide explains exactly what to do when users want their data deleted so you can respond confidently and stay compliant.
Tools and Resources:
- OneTrust GRC: Automates regulatory intelligence with real-time updates and compliance tracking.
- SAI360: Offers customizable modules with current regulatory insights tailored to your sector.
3. Weak Risk Assessments
Why it’s a problem: Superficial or infrequent risk assessments fail to uncover emerging threats, leaving your organization exposed. For example, a company might assess financial risks annually but miss a new cybersecurity vulnerability tied to remote work. Without a clear risk picture, you can’t allocate resources effectively or prepare for disruptions.
Consequences: Unidentified risks can spiral into crises. Think data breaches, supply chain failures, or regulatory violations, costing millions in damages and downtime.
Fix: Conduct regular, thorough risk assessments using a structured approach. Engage stakeholders from across the organization to identify risks in their domains, then analyze and prioritize them based on impact and likelihood. Make this an ongoing process, updating assessments after major events like mergers or regulatory shifts.
Tools and Resources:
- LogicGate Risk Cloud: Offers customizable workflows and analytics for proactive risk management.
- IBM OpenPages: Uses AI to pinpoint and prioritize risks with actionable insights.
4. Relying on Manual Processes
Why it’s a problem: Manual methods like spreadsheets, emails, or paper forms are slow, error-prone, and don’t scale. Imagine tracking hundreds of compliance controls manually: conflicts, typos, and forgotten updates are likely inevitable. These approaches also lack real-time visibility and audit trails, making it tough to prove compliance when regulators ask.
Consequences: As they say, nobody’s perfect, but human errors can lead to missed deadlines or violations, while the time spent on manual tasks drains productivity.
Fix: Automate repetitive GRC tasks like evidence collection, control testing, policy updates, and reporting. Automation cuts errors, saves time, and ensures consistency, while providing robust documentation for audits. It also scales as your organization grows.
Tools and Resources:
- Sprinto: Automates workflows and evidence gathering with minimal effort.
- Hyperproof: Simplifies control testing and evidence management for easier tracking.
- Rise: Automate payroll and onboarding for global, remote teams.
5. Poor Third-Party Risk Management
Why it’s a problem: Vendors, suppliers, and partners can be weak links if not properly managed. Many organizations assume third parties match their compliance standards, only to discover too late that a vendor’s lax cybersecurity exposed customer data.
Consequences: A third-party failure can trigger breaches, fines, or reputational harm that directly affect your business. For example, a 2020 vendor breach cost one company $80 million in damages.
Fix: Establish a robust third-party risk management program. Vet partners before onboarding. Check on their financial health, security practices, and compliance history, and monitor them continuously. Use contracts to enforce standards and conduct regular audits.
Tools and Resources:
- ResilientX TPRM: Advanced end-to-end third-party risk management with hyper-automation of manual tasks
- Prevalent: Focuses on third-party risk assessment and lifecycle management.
- Riskonnect: Integrates third-party risk into a unified GRC platform.
6. Insufficient Employee Training
Why it’s a problem: Generic training (such as presenting annual slideshows) rarely sticks and doesn’t address role-specific risks. An untrained employee might mishandle sensitive data or miss a phishing attempt, creating compliance vulnerabilities.
Consequences: Human error is behind 74% of data breaches (Verizon 2023 DBIR), costing millions in fines and cleanup.
Fix: Deliver tailored, engaging training based on roles. Use real-world examples (e.g., a phishing scam targeting finance staff) and reinforce with regular refreshers. Make it interactive. Use videos or quizzes to boost retention.
Tools and Resources:
- Compliance Manager GRC: Pairs compliance tracking with awareness training.
- KnowBe4: Provides role-specific, interactive modules.
7. Weak Audit Preparation
Why it’s a problem: Treating audits as last-minute emergencies leads to chaos—scrambling for documents, incomplete evidence, and avoidable findings. Poor prep signals to auditors that compliance isn’t a priority.
Consequences: Audit failures can mean fines, rework, and reputational hits.
Fix: Adopt a "continuous audit readiness" mindset. Centralize evidence, document controls year-round, and run internal audits to spot issues early. This turns audits into routine checkpoints, not crises.
Tools and Resources:
- AuditBoard: Centralizes evidence and streamlines audit workflows.
- Diligent HighBond: Offers real-time dashboards for audit prep.
8. Underestimating Data Security Risks
Why it’s a problem: Separating data security from compliance creates gaps. A breach isn’t just an IT issue, it’s a compliance violation under laws like GDPR, which demands robust data protection.
Consequences: Weak security can lead to fines (e.g., €746 million for Amazon’s 2021 GDPR breach) and eroded trust.
Fix: Integrate cybersecurity into your GRC framework. Use proactive threat detection, strong access controls, and incident response plans that have been thoroughly tested with cyber tabletop exercises.. Align security and compliance to eliminate overlap and boost efficiency.
Tools and Resources:
- Centraleyes: Combines GRC with cybersecurity risk management.
- Pathlock: Monitors controls across apps in real time.
8.1 Enhancing Compliance with Cloud Email Security
It's crucial to extend data security strategies to email, especially for systems like Microsoft 365. Implementing cloud email security solutions can help prevent threats such as phishing, ransomware, and data breaches by providing robust filtering and monitoring capabilities.
These tools not only protect sensitive communications but also ensure compliance with regulations like GDPR and CCPA by preventing unauthorized data access and maintaining secure communication channels.
9. No Executive Buy-In
Why it’s a problem: Without leadership support, GRC lacks funding and priority. Executives may view it as a cost center, not a value driver, starving programs of resources.
Consequences: Underfunded GRC can’t keep up with risks, exposing the business to penalties and inefficiencies.
Fix: Position GRC as a business enabler—protecting revenue, reputation, and growth. Use data (e.g., avoided fines, risk reduction) to show ROI and win executive support.
Tools and Resources:
- Archer Insight: Quantifies risk and mitigation value.
- Fusion Risk Management: Visualizes ROI via dashboards.
10. Choosing the Wrong GRC Tools
Why it’s a problem: Picking tools based on price or buzzwords often backfires. A cheap tool might lack scalability, while a familiar one might not fit your needs, leading to frustration and wasted spend.
Consequences: Poor adoption slows compliance and limits benefits.
Fix: Assess your needs such as size, industry, and regulations before choosing tools. Prioritize scalability, integration, usability, and vendor support. Test options with end-users to ensure fit.
Tools and Resources:
- StandardFusion: Flexible, cloud-based for smaller teams.
- SAP GRC: Robust for large, complex enterprises.
Why This Matters
Fixing these mistakes isn’t just about avoiding penalties, it’s about building a stronger business.
A solid GRC approach allows you to:
- Save money by cutting fines and inefficiencies.
- Build trust with customers and partners.
- Prepare you for future challenges.
