Importance of Governance, Risk and Compliance in Corporate Culture

Assignment One
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Table of Contents
Introduction.................................................................................................................................................3
4.Governance, risk and compliance.............................................................................................................3
5.Good compliance culture..........................................................................................................................6
6. Corporate Governance.............................................................................................................................7
7. The necessity of regulation......................................................................................................................9
Conclusion.................................................................................................................................................10
References.................................................................................................................................................12
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Introduction
Complying with the rules and regulations of the country is the basic requirement to be followed
by all the companies. An important person to help in this regards is the compliance professional.
Over the decades, the role of compliance professional has been constantly changing. A
compliance professional plays an important role for stakeholders, by accessing the relevant
information and interpreting it for them. The compliance professional is expected to have soft
skills including inter-personal and soft skills. As a fundamental skill, managing the change is
often ignored. Compliance is related to change and therefore the compliance professional is
supposed to be adaptable the changes taken place in the procedures.
4.Governance, risk and compliance
Governance, risk and compliance(generally termed as GRC) is the most essential mechanism of
an organisation or a firm. With the help of GRC, an organisation controls, directs and manages
their actions and strategies. Generally, regulation works on various levels which can further be
subdivided. Different sectors of market and categories of consumers are provided numerous
beneficial services in association to various products. It is very critical for the success of a firm
(John, Litov and Yeung, 2009).
Purpose of regulatory compliance
In general, compliance refers to the formation of a set of rules, policies, specifications or laws.
Regulator compliance illustrates those objectives that the firm wants to attain in their efforts in
order to comply with the rules or policies formed. For an effective regulatory compliance, GRC
system plays a very crucial role (Bedard and Johnstone, 2009).
A governmental body executes a law, termed as regulation, which grants a regulatory agency to
execute the authority. For example, Health Insurance Portability and Accountability Act of 1996
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(HIPAA) regulated an act in relation to the decurity of a patient’ information and acknowledged
the US. Also, Sarbanes-Oxley Act of 2002 (SOX) executed a law for registering financial
compliance and acknowledged the SEC(Securities and Exchange Commission) to authorize the
enforcement. The Public Company Accounting Oversight Board (PCAOB) was also formed in
order to look after the audit rules.
The main purpose of a regulatory compliance is to ensure the ability of a firm to adopt, change
and manage the efforts to maintain their effectiveness and the fitness for their desired purpose.
Moreover, regulatory compliance ensures the financial benefit of an organisation. It provides
such guidance that helps a business to succeed (Laeven and Levine, 2009).
Some of the purpose of regulatory compliance are-
 Protecting an organization
The potential impact of regulatory compliance can save you from accidental or malicious
manipulation of an information. A report on regulatory compliance which is brought to the
Board of Directors must contain the information about the risks related to the threats.
Regulatory compliance requires the guidelines that secure the assets that might be at risk. This is
the way by which it provides additional security for the information (Frigo and Anderson, 2009).
 Increasing profitability
Due to the rise in malicious attacks, the consumers always have a doubt whether a company is
protecting their data or not. In addition to that, more resources are invested in vendor
management by those clients who are seeking a chance to collab with third parties. With the help
of regulatory compliance, the companies market themselves in a better way. SOC1, SOC2 and
SOC3 type of reports help the client to trust their consumers and prove ongoing SOX
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