Making enterprises acknowledge risk as a revenue driver involves developing a taxonomy, giving Governance, Risk Management, and Compliance (GRC) professionals a seat at the "mission-critical table," and leveraging common control frameworks creatively. In this article, we explore how a taxonomy helps in making risk assessment robust.
A well-defined taxonomy helps make the risk language common and understandable across the diverse teams and departments in an enterprise. Furthermore, customizing the identification and the naming structure of an enterprise helps establish risk as a business driver. Besides, when a taxonomy can be used as a functional reference, it simplifies aggregated reporting and decision-making across the business. Additionally, a cross-department vocabulary increases technology adoption.
A GRC solution is a force multiplier for businesses, especially those that incorporate automation capabilities. Therefore, an updated taxonomy will help GRC professionals speed up unpolished processes and enable the enterprise, including the board and C-suite executives, to gain clarity. A standard language makes it easier to showcase the value of GRC processes and the impact of quantitative insights on risk in ordinary conversations. Moreover, the taxonomy structure will help optimize operations, reporting, and decision-making across the enterprise.
Having a taxonomy will not turn GRC and risk into a business driver. To turn them into business drivers, enterprises also need to ensure they are deploying the common control frameworks, translation tools, and reading structures, consistently and thoughtfully, across different work areas.
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