Why Focusing on Objectives is the Key to Successful GRC

Key Takeaways

• GRC Should Start with Objectives: True Governance, Risk, and Compliance (GRC) programs should begin with clear organizational objectives. Risk and compliance efforts should always support these goals, not the other way around.
• Misguided Risk Management: Without well-defined objectives, risk management becomes irrelevant. Risk is the effect of uncertainty on objectives, and without clarity on those goals, risk mitigation efforts are likely to miss the mark.
• Differences in US and European Approaches: In Europe, risk management is closely aligned with business objectives and follows the ISO 31000 framework, while in the US, risk management is often driven by compliance checklists and regulatory requirements like SOX compliance.
• ESG Needs Objective-Setting: Many organizations misstep by focusing on ESG risks before defining clear sustainability objectives. This reverse approach can hinder meaningful progress toward long-term goals.
• Re-aligning GRC: To unlock the full potential of GRC, organizations need to refocus on strategic and operational performance, placing objectives at the heart of risk management and compliance efforts, rather than viewing them as secondary concerns.

Deep Dive

If you’ve been keeping up with the evolving world of Governance, Risk, and Compliance (GRC), you may have come across my recent article that argues many GRC programs are fundamentally backward by focusing too much on compliance and risk before objectives. The article makes the case that true GRC should always start with clear organizational objectives, and everything else—risk, governance, and compliance—should support those goals. But why does this matter, and how can organizations better align their GRC strategies?

In the rush to meet regulatory requirements and manage potential risks, too many organizations treat GRC as a checklist—an exercise in compliance that’s disconnected from the broader strategic goals of the business. Yet, as the OCEG GRC Capability Model defines, the purpose of GRC is not to merely follow rules, but to reliably achieve organizational objectives, navigate uncertainty, and act with integrity.

In other words, GRC is about empowering an organization to meet its goals—not about merely ticking boxes. That’s why the sequence is so crucial: Governance (objectives) comes first, followed by Risk, and finally Compliance.

The Role of Objectives in a Successful GRC Program

Without clearly defined objectives, risk management becomes irrelevant. If you don’t know where you’re trying to go, how can you measure the risks that may block your path? As ISO 31000 puts it, risk is simply the effect of uncertainty on objectives. If those objectives aren’t crystal clear, then the efforts to mitigate risk will be misguided at best.

At every level of the organization, objectives are essential:

• Strategic Objectives – These are the overarching goals of the entire organization.
• Departmental Objectives – Each division or team works towards its specific set of targets.
• Operational Objectives – These focus on the finer details of day-to-day performance within workflows and processes.
• Third-Party and Asset Objectives – These include the performance metrics set for resources and external partners.

Governance plays a pivotal role in setting these objectives and ensuring they are consistently pursued. This isn’t just about oversight; it's about actively managing performance to ensure that risks don’t derail the organization from achieving its goals.

US vs. Europe Risk Management Approaches

A fundamental difference in how risk is managed in the US versus Europe shines a light on the importance of starting with objectives. In Europe, risk management is closely aligned with business objectives, largely following the ISO 31000 framework, which emphasizes uncertainty’s potential impact on the organization’s goals. In the US, on the other hand, risk management is often compliance-driven, with an emphasis on checklists and regulatory requirements like SOX compliance.

This is more than just a cultural difference. It’s a strategic approach that highlights the importance of business goals in risk management. European compliance frameworks are often principle-based and outcome-oriented, focusing on how an organization achieves compliance objectives. In contrast, US frameworks often rely on prescriptive regulations and checkbox exercises, which don’t always lead to meaningful business outcomes.

ESG: A Case in Point for Objectives-Driven GRC

Consider Environmental, Social, and Governance (ESG) initiatives—an area where objective-setting is essential. ESG focuses on achieving long-term sustainability and ethical business objectives. Whether the goal is to reach carbon neutrality, eliminate harmful chemicals from products, or take a stand against modern slavery, these are concrete objectives that dictate the necessary risk management and compliance measures.

Yet, many organizations make the mistake of focusing on ESG risks first, without clearly defining their overarching sustainability objectives. This reversal ultimately undermines their efforts, preventing them from driving meaningful progress.

Why Most GRC Programs Miss the Mark

Unfortunately, many GRC technologies today don’t follow the right order. Most solutions begin with risk registers, controls, or compliance requirements, which reduces objectives to an afterthought. These platforms often treat compliance and risk management as the primary drivers, sidelining the real purpose of GRC: achieving organizational goals.

Only a handful of GRC solutions successfully integrate business objectives into their frameworks, ensuring that risk management and compliance efforts are linked to performance. If you're seeking a GRC solution that aligns with the true spirit of the model, there are options that get it right. It’s about finding tools that emphasize goals and outcomes rather than checkboxes and compliance metrics.

Realigning GRC with Objectives

If your organization’s GRC program starts with risk and compliance instead of clear objectives, it’s time for a major shift. True GRC doesn’t just help you navigate compliance; it helps you reliably achieve your objectives, manage uncertainty, and act with integrity. Governance, risk management, and compliance should always be aligned in this order.

To unlock the full potential of GRC, organizations need to prioritize strategic and operational performance—not merely focus on control frameworks or regulatory checklists. Objectives should never be secondary. They should be the bedrock on which successful GRC programs are built.

For those looking for a deeper dive, be sure to check out my original article here.

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