10 Ways to Measure Governance, Risk, and Compliance

Organizations face numerous challenges related to governance, risk, and compliance (GRC). To ensure effective oversight and decision-making, it is crucial for leadership and the board of directors to have access to key performance indicators (KPIs) that provide insights into the organization’s GRC efforts.

1. Control Effectiveness: The percentage of critical controls tested and found effective. This KPI helps assess the robustness of the organization’s control environment and provides insights into the effectiveness of risk mitigation measures.
2. Risk Assessment Coverage: The percentage of business units or processes assessed for risk, ensuring comprehensive risk identification. It ensures that potential risks are not overlooked and helps prioritize risk mitigation efforts.
3. Risk Mitigation Rate and Response Times: The percentage of identified risks that have been adequately mitigated to an acceptable level. It provides visibility into the effectiveness of risk management efforts and helps prioritize mitigation actions—the average time taken to mitigate identified risks to an acceptable level. Timely risk mitigation reduces the organization’s exposure to potential threats and vulnerabilities.
4. Third-Party Risk Exposure: The percentage of third-party vendors assessed for risk and their risk ratings. As organizations rely on third-party relationships, assessing and managing the risks associated with those vendors is essential.
5. Vulnerability Remediation Rate and Response Time: The percentage of vulnerabilities that have been remediated. Timely patching and remedying vulnerabilities reduce the organization’s exposure to potential cyber threats. Rapid remediation minimizes the window of opportunity for attackers and strengthens the organization’s security posture.
6. Audit Findings Closure Rate: The percentage of audit findings or recommendations that have been closed or addressed. It demonstrates the organization’s commitment to promptly addressing internal and external audit observations.
7. Compliance/Policy Review and Approval Cycle Time: The average time to review and approve new or updated policies and procedures to meet changing compliance requirements or best practices. Efficient policy management ensures that the organization operates following regulatory requirements and best practices.
8. Training Completion and Effectiveness: The percentage of employees who have completed mandatory security and privacy awareness training programs and testing the effectiveness through assessments or post-training evaluations. Well-informed employees are critical for maintaining a strong security culture and reducing the risk of human error.
9. Incident Response Time: Average time to respond to and address security incidents or compliance breaches. A quick and efficient incident response demonstrates the organization’s ability to mitigate the impact of incidents and protect sensitive data and assets.
10. Regulatory Fines or Penalties: Tracking the total value of fines, penalties, or sanctions imposed on the organization due to non-compliance or regulatory violations highlights the financial impact of inadequate GRC practices.

Conclusion: By regularly reporting these GRC-related KPIs to leadership and the board of directors, organizations can gain valuable insights into their risk posture, compliance status, and effectiveness of controls. These metrics enable informed decision-making, drive continuous improvement, and support the organization’s commitment to robust governance, risk management, and compliance practices.