automotive industry

Governance, Risk and Compliance Strategies in Automobile Industry

Major automobile corporations and management teams are more concerned about governance concerns than ever before, thanks to increased shareholder agitation and heightened legal oversight. As a result, they are working day and night to implement GRC strategies to better stand in the market and attract potential investors. 

To understand what GRC is for an automobile company, we should break down the three aspects. 

Governance refers to the role of the board of directors and the process through which firms manage and reduce business concerns. 

The governance framework in GRC for an automobile organization involves components such as corporate control definition and communication, key policies, corporate governance, regulatory and compliance management and oversight (e.g., ethics and alternatives accountability, along with overall supervisory of regulatory issues) and assessing company performance through benchmarking, risk scores, and other metrics.

Risk assessment allows a company to assess all critical business and regulatory risks and controls and systematically track mitigation activities.

Many organizations have become more sensitive to recognizing and controlling types of weakness in their organization, whether monetary, administrative, IT, brand, or reputation-related risk, due to recent regulatory demands and increasingly activist shareholders.

These issues are not solely deemed the duty of experts; managers and boards of directors now want transparency into vulnerability and status to successfully manage the company’s long-term plans. As a response, businesses are attempting to systematically identify, evaluate, prioritize, and manage all sorts of risk in their operations and then manage any exposure accordingly.

Compliance guarantees that a company has the systems and organizational controls to meet the demands of government agencies, regulators, industry regulations, and internal regulations.

Organizations recognize that compliance is not a one-time occurrence and must turn it into a systematic process to maintain compliance with that rule at a cheaper cost than the initial period.

Whenever an organization is working with many regulations at once, a simplified method for managing compliance with all of these activities is essential; otherwise, expenses can spiral out of control, and the danger of non-compliance rises.

The automobile sector is immensely dynamic and works within a broad and independent distribution and supply network, and—as a result—tends to be organized by self-governing functional areas by GRC helping in management, production, and marketing, and sales. 

With rising customer and regulatory expectations, we see the rapid evolution and maturity of organizational governance structures on compliance today, even though the sector is still in the early phases of that transition.