GRC Capability Model 3.5: Everything You Need To Know

Cloud companies are scrambling to fortify their defenses in an era where data breaches make headlines and regulations tighten. Enter the GRC Capability Model 3.5 – a game-changer in how organizations approach governance, risk, and compliance. 

As cloud adoption soars, this framework offers a beacon for companies navigating the complex waters of security and regulatory compliance. It provides a structured yet flexible approach and can act as a secret weapon for businesses aiming to build trust, mitigate risks, and stay ahead in a highly competitive landscape.

Let’s take a deeper look at it. 

TL;DR The GRC Capability Model 3.5, developed by OCEG, provides a clear, adaptable framework to guide organizations in integrating governance, risk management, and compliance. The OCEG Red Book focuses on four key components—Learn, Align, Perform, and Review. The model emphasizes ‘Principled Performance,’ helping organizations achieve objectives while managing risks, staying compliant, and maintaining ethical standards.

What is the GRC Capability Model?

The GRC Capability Model or OCEG Red Book is a unified approach to governance, risk, and compliance with four major components: Learn, Align, Perform, and Review. It is a publication by the Open Compliance and Ethics Group (OCEG) 

The GRC red book aims to drive principled performance for businesses adopting a GRC strategy. It has formalized the GRC approach into an easily adaptive ‘model’ and aids companies by providing a guide on how to start with the basics of GRC and scale from there on. 

You can also use the Capability Model to integrate it into the specific frameworks required by your organization like ISO, SOC 2, COSO, NIST, GDPR, etc. This provides a structured and tested approach to managing the various aspects of GRC.

Here’s what the four key building blocks of the OCEG GRC Capability Model represent:

1. Learn

The ‘Learn’ component of the capability model lets you figure out the internal and external context of your organization, the stakeholders involved and the culture you believe in. 

Learning involves asking questions about the expectations of the industry you serve in, your potential threat surface and common attacks and risks present in the industry. This is connected to the resources you have internal access to.

The model also provides you with questions you need to ask about your internal processes, accountability measures, policies in place, risks, events, etc. It further delves into the target audience of your business and, ultimately, the values you uphold. 

Tools or techniques involved in this phase are SWOT analysis, scenario planning, PESTLE analysis, resource-based view, culture map, stakeholder analysis, etc. 

2. Align

How do you align your organizational goals with long-term direction and a proper way to measure progress?

Aligning your GRC strategy means creating effective controls and measures that help you meet business goals and address any uncertainties. This is to be done in multiple stages with accountable decision making at every step and clearly stated mission, vision and values. 

“The end result of alignment is an integrated plan of action” – OCEG Red Book.

This phase includes analyzing your compliance requirements (mandatory or regulatory), defining your risk appetite, setting key objectives and indicators, assessing costs, defining controls, etc. 

3. Perform

The ‘perform’ phase is where all the action happens. According to Principled Performance in the GRC Red Book, an organization needs to have a proactive approach to dealing with any opportunities or challenges it may come across while implementing a GRC strategy.

Along with being proactive, the strategy must also be ‘detective’ with a quick response rate to incidents. This is to achieved with a combination of security controls, measures, actions or tools. Furthermore, all of these must be categorized according to assets like people, process, policy, technology, data, etc.

The ‘perform’ stage is where policies are implemented, controls are mapped to frameworks/policies, training is conducted, and response plans and breach notifications plans are executed. 

The process includes techniques and frameworks like COSO Internal Controls, feedback surveys, SA&T tools, continuous control monitoring, automated alerts, audit logs, business continuity planning, etc. 

4. Review

‘Review’ is the stage where organizations need to monitor everything they have implemented, including actions, measures, and controls while continuously improving on it. It helps the management gauge the results of key indicators and if they are contributing to business success.

The review stage also ensures compliance with the standards or frameworks relevant to your business and tests if the system is resilient, efficient, and agile.

Common tools and techniques used in this process are OKRs (Objectives and key results), KPIs, KRIs, periodic reviews, tests of controls, external & internal audits, assessments, benchmarking, and balanced scorecards. 

What is new in the latest update of the GRC Capability Model 3.5?

The OCEG GRC Capability Model 3.5, the latest update from OCEG is a result of extensive collaboration of hundreds of members and GRC experts. The update focuses on three main objectives: simplifying, clarifying, and augmenting the model.

The latest update introduces enhancements like:

1. Simplified content: The model has been edited to be more accessible and easier to navigate, with new technologies aiding in its digital capture and publication.
2. Enhanced framework: The model now includes refined GRC concepts that provide a comprehensive understanding of foundational ideas and effective practices in GRC.
3. Unified vocabulary: Provides a standardized language across disciplines for better communication and alignment.
4. Defined components and information requirements: The 3.5 update comes with clear outlines of common elements and information needed to standardize practices like policies and training.
5. Improved communication strategies: It identifies effective communication methods for all stakeholders involved in GRC activities.

Role of GRC Professionals 

According to the GRC Capability Model 3.5 Red Book PDF, the role of GRC professionals, termed “Protectors,” is creating and protecting value by assuring Principled Performance. Consequentially, their major tasks involve:

• Reliably achieving objectives: Assisting an organization to achieve its objectives.
• Confronting uncertainty, managing risks and challenges: How to do it effectively.
• Acting with integrity: Ensuring ethical conduct and compliance with laws.

GRC professionals inform and work across all the departments: the board, risk management, compliance, ethics, HR, legal, security, and audit. They are defined by their Protector Mindset and Protector Skillset. They are responsible for providing interdisciplinary expertise in the fields of governance, risk management, and compliance.

Using the OCEG Red Book to develop a GRC strategy

Leveraging the OCEG GRC Red Book starts with determining your initial security stance and continues through evaluating the results of key objectives. Furthermore, you can maximize your benefits of using it in the following ways:

Understanding ‘Principled Performance’

Principled Performance is the backbone of the GRC Red Book. It deals with meeting the business objectives while setting up the ethical standard, addressing risks, and complying with the requirements. 

Principle performance will easily allow you to understand how your organization’s goals line up with responsible practices. It positions you for long-term success by managing uncertainty with integrity.

Learning core GRC concepts

The Red Book outlines key GRC concepts around governance, risk management, compliance, and ethics. By mastering these, you’ll gain a comprehensive understanding of how to integrate these areas into a cohesive strategy. 

This knowledge forms the foundation of an effective GRC program and helps you build a system that strengthens decision-making and accountability across your organization.

Exploring the true potential of a GRC strategy

A well-practiced GRC tends to go beyond regulatory compliance; rather, it extends an organization’s capabilities for proactive risk management, resource optimization, and performance enhancement. 

You will have the chance to exploit a GRC strategy to the fullest by building a system that protects your organization and creates value through optimized operational efficiency.

Leveraging practical solutions

The Red Book provides practical tools and techniques that help translate GRC theory into actionable steps. You can get access to unique techniques mentioned in the Red Book with the GRC Assessment Tools Edition (also known as the OCEG Burgundy Book) with a subscription-based model.

GRC Excellence Combined with Automation

The OCEG Red Book is an excellent choice for having a structured, high-performing GRC model, but it also recognizes that manual oversight is not sufficient. For example, there are instances in the book where the authors suggest innovative technology and automation.

There is also mention of automated alerts and notifications, continuous control monitoring, proactive risk monitoring, etc. Such techniques have been mentioned to deliver scalable solutions that can adapt to your business’s growth.

Sprinto’s advanced GRC automation features align perfectly with the GRC Capability Model laid down by the OCEG. With real-time monitoring, automated evidence collection, and a scalable design, all kinds of complex GRC processes are made easy with the tool. 

Sprinto’s platform comes with powerful reporting features like the Compliance Health Report, Compliance Gap Report, Risk Report, and Vendor Insights Report. These reports provide continuous oversight, helping organizations stay on top of governance and effortlessly meet cloud security compliance requirements.

Frequently Asked Questions

What is GRC?

GRC (Governance, Risk Management, and Compliance) refers to the integrated collection of capabilities that enable an organization to reliably achieve objectives, address uncertainty, and act with integrity. It helps organizations align their actions with their values and obligations, ensuring long-term, sustainable performance.

What is the GRC 360 Capability Model?

The GRC Capability Model, developed by OCEG, is a comprehensive framework that guides organizations in designing and implementing effective GRC strategies. It outlines best practices for integrating governance, risk management, and compliance processes to achieve Principled Performance—the reliable achievement of objectives while addressing risks and acting with integrity.

What is Principled Performance?

Principled Performance is the goal of GRC, which involves achieving business objectives while managing risks, staying compliant with regulations, and maintaining ethical standards. It’s about balancing the pursuit of goals with acting responsibly and transparently.

What is a Protector Mindset?

The Protector Mindset refers to the attitude GRC professionals adopt, focusing on safeguarding an organization’s integrity and performance. Protectors work across various functions—such as risk, compliance, ethics, and legal—to ensure that the organization achieves its goals without compromising its values.