GRC
Governance, risk, and compliance are significant concepts that outline the essential process to regulate the structure and activities that the company must undertake ( Long, 2017). These activities are what the organization must engage in as part of conducting business. Governance denotes the approach to managing all the critical aspects of an organization. On the other hand, risk management outlines the frameworks that the company uses to mitigate the various risks. Finally, compliance relates to the company’s response to the many laws and security frameworks. These concepts needed to be carefully and understood before any particular GRC program can be set up and implemented. A well-structured GRC program forms a comprehensive framework for improving the efficiency with which any given organization performs its business activities.
LFC’s GRC Requirements
Governance
Governance entails self-discipline. It is the process by which a firm’s board of directors sets the organization’s goals and monitors the steps of ensuring such objectives (Papazafeiropoulou & Spanaki, 2016). LFC requires good corporate governance due to the high sophistication of the company’s financial system. The implementation of a sound GRC management program is critical in improving operational and financial control. LFC’s board of directors needs to emphasize a strong alignment of staff accountability to corporate goals. Such responsibility can be achieved through effective communication with the subordinates.
Risk management
Implementing a risk management framework that meets the regulatory compliance requirements saves an organization from multiple dangers. This situation makes it possible for the early identification of risks and the design of appropriate measures to mitigate them. OCTAVE combines information assets, vulnerabilities, and threats. In this way, an organization can figure out what information is at risk. With such information at their disposal, organizations can formulate and execute a protection strategy to minimize information assets’ exposure to various risks. OCTAVE is thorough and well-documented, allowing firms to balance the protection of sensitive information assets (Sulistyowati & Ginardi, 2019). The framework similarly enables the organization to compare itself against well-known security practices. LFC needs to adopt such a structure to protect the new data center from threats that may hinder its performance.
Compliance
Any particular organization needs to adhere to the country’s rules and regulations or state in which it conducts business. Currently, compliance has extended its scope to pertain to specific areas such as money laundering, and the relevant tax laws concerning the various financial services. As a financial services company, LFC needs to comply with the different tax laws in the states it wishes to set up the data protection center. Each state in the US has its privacy and security laws that businesses need to comply with. Setting up the business in Oklahoma will require LFC not to obtain an individual’s personal information to defraud them.
References
Long, G. (2017). The Importance of GRC in the Enterprise. Available at SSRN 2951123.
Papazafeiropoulou, A., & Spanaki, K. (2016). Understanding governance, risk, and compliance information systems (GRC IS): The experts view. Information Systems Frontiers, 18(6), 1251-1263.
Sulistyowati, I., & Ginardi, R. H. (2019). Information security risk management with octave method and iso/eic 27001: 2013 (case study: Airlangga university). IPTEK Journal of Proceedings Series, (1), 32-38.