Governance, risk and compliance (GRC) frameworks are well established on paper. Most organizations have strategies, policies, risk registers and controls in place. Yet for many leaders, the reality looks quite different.
Processes remain opaque. Responsibilities blur across functions. Regulatory changes trigger reactive workarounds rather than controlled execution. Audits consume excessive amounts of time. Data lives in silos. And business teams experience governance as friction rather than support.
For leaders in highly regulated industries, the issue is no longer whether GRC exists, but whether it actually works in daily operations. Effective governance is not about documentation alone. It’s about translating intent into execution through clear structures, connected systems and practical workflows.
Let’s examine the key realities organizations face and what functional GRC looks like in practice.
Read the other blogs in this series about governance, risk and compliance.
Why governance breaks down in execution
The gap between ambition and reality often arises when governance moves from concept to practice. Across financial services, health care, and the public sector, the same weaknesses recur.
Policies exist but aren’t operationalized. Rules, policies and guidelines are often developed with significant effort, yet they remain disconnected from the processes and systems that run the business. Risk assessments, approvals, controls and technical enforcement are not consistently linked. A rulebook without execution mechanisms delivers little real control.
Roles are defined but not actively managed. On paper, responsibilities such as policy owner, risk owner or compliance officer are clearly assigned. In practice, accountability is often fragmented. Escalations are manual or informal. Decision histories are incomplete. Without clear ownership, automated escalation and traceability, governance becomes slow, inconsistent and exposed to liability risk.
Documentation exists but lacks impact. Organizations generate large volumes of compliance documentation, but it is often fragmented, outdated or difficult to access. Audits require manual evidence gathering. Business teams duplicate effort. Management lacks a reliable, consolidated view of governance effectiveness.
Takeaway: Governance fails not because frameworks are missing, but because execution is not systematically embedded.
Common GRC weaknesses that undermine control
When governance struggles in practice, the root causes are often structural.
Spreadsheets instead of systems. Many core GRC activities – such as policy management, risk tracking, audit measures, or model inventories – are still maintained in Excel, Word, or shared drives. This creates fundamental limitations, including:
- No reliable version control.
- Weak access management.
- No audit trail.
- No standardized workflows.
- No integration with risk, HR or document systems.
The result is missed deadlines, bypassed responsibilities and no consolidated governance view.
Governance by email. In decentralized organizations, coordination, exceptions and escalations are often handled informally via email. While convenient in the short term, email‑driven governance is neither auditable nor scalable. And it quickly becomes dependent on individuals rather than on structure.
Isolated tools without integration. Many organizations operate multiple point solutions: one for audits, another for internal controls, another for policies, plus SharePoint sites and local tools. These systems rarely communicate. Data is duplicated. Contradictions appear. Synergies are lost.
Takeaway: Fragmented tools and informal processes erode transparency, consistency and control.
Regulation keeps moving – governance must keep up
Governance is never “finished.” Regulatory change continuously reshapes requirements, roles and documentation.
Current examples include:
- EU AI Act: Structured governance for AI systems, including risk classification, conformity assessment and life cycle monitoring.
- ESG disclosure (CSRD/ESRS): Governance over sustainability and due diligence processes.
- DORA, BAIT, VAIT, KRITIS: IT and information security governance across regulated sectors.
- BCBS 239 and MaRisk: Governance, data quality and risk reporting in banking.
- Supply Chain Due Diligence: Oversight of human rights and environmental risks.
Each regulation introduces new workflows, controls and evidence requirements. A rigid or manually maintained GRC structure quickly becomes a bottleneck.
Takeaway: Governance systems must be designed for continuous change, not static compliance.
What functional GRC looks like in practice
So, what do organizations actually need to make governance work from day to day?
A unified framework with decentralized execution. Effective governance combines central standards with local accountability. Consistent data models, workflows and reporting create structure, while responsibility stays close to the business. Leadership retains visibility without constraining operational flexibility.
Automated, traceable workflows. Manual follow‑ups give way to structured processes, including:
- Policy and exception approvals with documented decisions.
- Automated reminders and deadlines.
- Escalations when thresholds are missed.
- Scheduled review cycles.
- Complete audit trails.
Automation improves reliability while reducing operational burden.
Central data with role‑based context
Governance data must be both consistent and relevant. Central storage ensures accuracy, while role‑based access and contextual views ensure users see only what matters to them, whether they are reviewers, approvers or auditors.
Usability that drives adoption. Governance fails when systems are too complex. Intuitive interfaces, clear navigation, guided workflows and embedded support ensure that business teams can execute governance responsibilities correctly and efficiently.
Takeaway: Governance succeeds when it supports daily work instead of interrupting it.
Managing governance across the full life cycle
A functional GRC system covers the entire life cycle of governance objects – from creation to retirement.
Example: Policy life cycle
- Creation: Templates, responsible owners, structured drafting.
- Approval: Review workflows with comments and decisions.
- Publication: Version control, access management, notifications.
- Application: Links to processes, controls and IT systems.
- Monitoring: Review cycles, feedback, change management.
- Archiving: Retention, traceability and legal evidence.
The same logic applies to risks, controls, audits and AI or analytical models.
Takeaway: Lifecycle management turns governance from static documentation into active control.
Roles matter as much as technology
Technology alone does not create governance. Clear role models are essential:
- Policy owners.
- Compliance officers.
- Risk owners.
- Process owners.
- Reviewers and approvers.
- Auditors.
These roles must be formally assigned, visible in the system, supported by substitution rules and backed by automated escalation paths.
Takeaway: Governance works when accountability is explicit, not assumed.
Governance depends on integration
Governance cannot operate in isolation. Effective GRC connects to:
- Risk management systems.
- Identity and access management.
- HR platforms for training and attestations.
- Model management environments for AI governance.
- Audit tools for planning and remediation tracking.
Only with these integrations can organizations achieve consistent oversight and operational efficiency.
Governance in practice is an organizational discipline, not a side project.
Most organizations know what good governance should look like. The challenge lies in making it work consistently.
Successful GRC implementation rests on four pillars:
- Clear responsibilities.
- Structured, traceable processes.
- Integrated systems.
- Genuine user adoption.
Governance delivers value when it functions not just in audits, but in everyday decision‑making – providing control, resilience and confidence in an increasingly complex regulatory environment.
