How to do GPRC right?
Corporater
Integrated software solutions for Governance, Performance, Risk, and Compliance (GPRC) management.
In today's dynamic business landscape, organizations face a myriad of challenges related to performance, risk, and compliance. Let’s delve into the world of Governance, Performance, Risk, and Compliance (GPRC), a framework designed to provide a holistic approach to managing and assuring a company's overall well-being.
Understanding GPRC
GPRC stands for Governance, Performance, Risk, and Compliance. It serves as a comprehensive framework that addresses the governance, management, and assurance of a company's performance, risk, and compliance. The GPRC Matrix, emphasizes the ‘P’ in GRC, highlighting the crucial link between corporate GRC programs and business objectives, which must be measured against established corporate metrics.
Governing performance involves setting the strategic direction, discussing ambition levels, and establishing targets for the organization. Managing risk requires a strategic approach to risk strategy and understanding risk appetite. Governing compliance involves establishing policies, procedures, and operational guidelines for the company.
The three lines of defense, represented by governing, managing, and assuring, are crucial for organizational success. The first line comprises frontline workers and operational managers responsible for day-to-day performance, risk management, and compliance adherence. The second line involves strategic governance and management, while the third line focuses on assurance through auditing and control functions.
Challenges
Common challenges to addressing GPRC issues in an organization include poor visibility, duplicated efforts, and the creation of siloed departments. The traditional approach of establishing separate departments for performance, compliance, and risk management is deemed ineffective, as it leads to a lack of collaboration and shared goals.
Doing it Right
Contrary to the traditional mindset, creating a GPRC mega department is not the solution. Instead, GPRC should be integrated into the fabric of the business, becoming an inherent part of the organization's management disciplines.
GPRC emerges as a vital framework for organizations seeking to navigate the complexities of modern business. By integrating GPRC seamlessly into the business structure, companies can enhance visibility, collaboration, and the successful implementation of strategies, ultimately ensuring sustained performance, effective risk management, and regulatory compliance.
Governance
Strides made in corporate governance reporting but more work needed to meet stakeholder expectations
The Financial Reporting Council has today published its latest Annual Review of Corporate Governance Reporting which finds ongoing improvements in the quality of reporting against the UK Corporate Governance Code, but also identifies areas where many companies are still falling short.
The review showcased high-quality and insightful reporting by some companies, with the FRC continuing to see more transparent reporting of departures from the Code, rather than simply stating compliance. However, explanations were often found to lack sufficient clarity and few companies reported to a consistently high standard.
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Performance
Amidst layoffs and a slowing down of the hiring process being seen by large companies as an avenue to strengthen their revenues, global tech major Google has introduced a new performance management system, which could push out thousands of underperforming employees, according to reports.
As per a report by The Information, a new performance management system, which once implemented early next year, could make way for human resource managers to push out underperforming Google employees.
Risk
Analysis by specialist insurer Beazley has found a notable surge in Canadian business leaders’ apprehension regarding operational risks amid looming fears related to climate change and cybersecurity.
According to Beazley’s 2023 Risk & Resilience research, 35% of Canadian business leaders say they are currently operating in a high-risk environment, marking a sharp increase from 20% in 2022. Forecasts also suggested that this perception is set to escalate further to 37% by 2024, mirroring mounting concerns about an impending recession among the country’s economists.
Compliance
With an estimated $18.4 trillion of ESG-orientated assets now being managed globally, the FCA is putting in place new Sustainability Disclosure Requirements and an investment labels regime after detailed engagement with a range of stakeholders, including industry, other regulators and consumer groups.
This package of measures, including the consumer-focussed labelling regime, will support the UK’s position as a world-leading, competitive centre for asset management and sustainable investment.
It will also protect consumers by helping them to make more informed decisions when investing and enhance the credibility of the sustainable investment market.
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Corporater offers a single platform and integrated solutions for Governance, Performance, Risk, and Compliance (GPRC).