Quick Answer:
The five governance risk and compliance challenges that persist in Australian organisations are unclear ownership of the GRC process, no single framework, keeping pace with regulatory change, manual processes that cannot produce evidence, and a gap between stated culture and actual behaviour. None is a technology problem at root. Each is a decision that was never made, which is why buying software before making those decisions usually means configuring it twice. The four fixes that work are monitoring critical controls, defining organisational requirements before selection, centralising data, and automating what is currently manual, in that order.
In this guide
- GRC explained, briefly
- The 5 common governance risk and compliance challenges
- Why these challenges got harder
- 5 signs your GRC approach is not working
- A worked example
- How to overcome the challenges
- A 90-day starting point
- Where a GRC system helps, and where it does not
- Bringing it together
- Frequently asked questions
Most Australian organisations do not fail at governance, risk and compliance because they lack effort.
The governance risk and compliance challenges they hit are structural rather than a matter of will. They fail because the work is spread across functions that each hold a piece of it, and nobody owns the join.
The five GRC challenges below have been consistent for a decade. What has changed is the cost of leaving these GRC challenges unresolved, because several Australian obligations that used to be managed on judgement now carry specific, evidenced consequences.
This guide covers Australian obligations. Duties vary by industry, and work health and safety requirements differ between states and territories.
GRC Explained, Briefly
Governance, risk and compliance describes an organisation’s approach to managing risks, complying with rules, regulations and guidelines, and handling internal corporate and policy management.
It covers three connected things: how decisions are governed and who is accountable, how risks are identified and controlled, and how obligations are met and evidenced.
The value of treating them together rather than separately is that they share inputs. The same policy acknowledgement is a governance record, a risk control and a compliance artefact.
Managed separately, it gets captured three times or not at all.
For the full definition, the components and how the disciplines fit, see what GRC is and why it matters. This guide is about the specific governance risk and compliance challenges that stop it working in practice.
The risk side of GRC is the one that most often turns out to be missing rather than weak. Our complete Australian risk management guide covers the framework, the risk types and the process that the R in GRC assumes you already have.
The risk side of GRC is the one that most often turns out to be missing rather than weak.
The 5 Common Governance Risk And Compliance Challenges
| # | Challenge | What it looks like | Root cause |
|---|---|---|---|
| 1 | Unclear roles in the GRC process | Several functions each hold part of an obligation and none holds the whole | Accountability was assigned to functions rather than to named people |
| 2 | No comprehensive GRC framework | Risk, policy, training and incident data sit in separate systems with different categories | The framework was never designed, so each function built its own |
| 3 | Keeping pace with regulatory change | Obligations commence and nobody notices until an audit or a client asks | No named owner tracking commencement dates |
| 4 | Manual and obsolete processes | The work happens and the evidence cannot be produced months later | Processes built to complete a task rather than to leave a record |
| 5 | A gap between culture and GRC | Policies say one thing, and what gets rewarded says another | Incentives and promotion were never aligned to the stated expectations |
1. Unclear roles in the GRC process
Ask who owns modern slavery reporting, or psychosocial risk, or supplier due diligence. In most organisations the answer involves three functions and a pause.
That pause is the first of the governance risk and compliance challenges, and the most common.
Ownership assigned to a function is not ownership. Human resources does not answer questions, a person does.
The test is whether a named individual can describe an obligation, its controls and its current status without preparation.
Where they cannot, the obligation is unmanaged regardless of what the org chart says.
The fastest diagnostic
Pick three obligations and ask for the accountable person by name. If you get a function, a committee or a discussion, that obligation has no owner. This takes ten minutes and it is more revealing than any maturity assessment.
2. Lack of a comprehensive GRC framework
Without a framework, each function builds its own approach.
Safety rates risk on one scale, operations on another, and compliance tracks obligations in a spreadsheet unconnected to either. Every part works. Nothing aggregates.
The consequence appears at reporting time. An executive asked for the top five organisational risks receives a list assembled from incomparable sources, and the ranking is close to meaningless.
The fix is agreeing shared risk criteria and scales before anything else, which is covered in how to build a risk assessment framework.
3. Meeting changing government and regulatory requirements
Australian regulatory change has accelerated, and the pattern that catches organisations is not missing a new law.
It is discovering months later that something commenced while nobody was watching for it.
This is a tracking problem with an unglamorous solution: a named owner, a register of applicable obligations with commencement dates, and a standing review.
Most organisations have none of the three, and rely on their lawyers or an industry newsletter to raise the alarm.
4. Persistent and obsolete manual processes
Manual processes are not slow so much as unprovable. A policy circulated by email was genuinely circulated.
Six months later there is no record of who read it, which version they saw, or when.
That distinction matters more each year, because most Australian obligations are now tested by asking for evidence at a past date rather than by asking whether you meant well.
Manual processes complete the task and lose the proof, which is the subject of why manual risk registers fail.
5. The gap between organisational culture and GRC
An organisation can hold current policies, complete training and a full risk register, and still carry serious exposure if what gets rewarded contradicts what gets written down.
This is the hardest of the GRC challenges because it cannot be bought or documented. It is changed by what happens after somebody raises a concern, and by who gets promoted.
See cultural risk management for how to treat that as a managed risk rather than a values statement.
Why These Governance Risk And Compliance Challenges Got Harder
The five GRC challenges are not new. What changed is that several Australian obligations moved from guidance to enforceable duty in a short period, and each one is tested by asking for evidence.
| Change | In force from | Which GRC challenge it exposes |
|---|---|---|
| Intentional wage underpayment became a criminal offence | 1 January 2025 | Manual processes. Intent is inferred from records, so what you documented decides your position |
| APRA CPS 230 Operational Risk Management | 1 July 2025 | Framework. Critical operations, tolerances and material service providers have to be mapped, which is impossible without one |
| Statutory tort for serious invasion of privacy | 10 June 2025 | Roles. An individual can now act without a regulator, so the response has to be owned before it happens |
| Right to disconnect reached small business employers | 26 August 2025 | Culture. The duty is easy to state and it is manager behaviour that decides compliance |
| Mandatory climate reporting, Group 2 | 1 July 2026 | Regulatory tracking. Thresholds capture entities that never considered themselves in scope |
| APRA CPS 511 Remuneration, all APRA-regulated entities | 1 January 2024 | Culture. Remuneration must promote management of non-financial risk, which makes incentives a GRC control |
Two of the six point at culture and two at process. That distribution is worth noticing, because most GRC investment goes to the process end while the regulatory direction of travel is toward behaviour and evidence.
The pattern across all six
Every one shifts the question from what you intended to what you can show. That is why the manual process challenge has moved from an efficiency issue to the most expensive of the five, and why documentation is now a control rather than an administrative by-product.
Alongside these, the positive duty under the Sex Discrimination Act and psychosocial hazard duties both require proactive measures rather than a response to complaints. For a full list of what has commenced, see the regulatory changes already in force.
5 Signs Your GRC Approach Is Not Working
These are observable without an audit, and each maps to one of the five GRC challenges above.
| Sign | What it usually means | Which challenge |
|---|---|---|
| Nobody can produce a policy acknowledgement from 12 months ago in under an hour | The process completes tasks without leaving evidence | Manual processes |
| Two departments rate a similar risk differently and both are defensible | There is no shared scale, so ratings cannot be compared or ranked | No framework |
| A new obligation is discovered by a client questionnaire rather than internally | Nobody is tracking commencement dates | Regulatory change |
| The risk register has not materially changed in twelve months | It is maintained for reporting rather than used for decisions | No framework, and often roles |
| People raise concerns informally but rarely through the formal channel | The formal route exists and is not trusted | Culture |
The fourth sign is the most common and the most misread. A stable register looks like control.
In practice a register that never moves is usually one nobody consults, because real operating conditions change more than once a year.
A Worked Example Of GRC Challenges In Practice
A 400-person Australian aged care provider across six sites. Nothing here is unusual, which is the point. Each function is competent and the GRC challenges are structural.
| What happened | What each function saw | What was actually missing |
|---|---|---|
| A new obligation commenced in July | Nobody saw it. Legal had flagged it to the executive in March and no owner was named | Challenge 3. An obligations register with a named owner tracking commencement dates |
| A client tender asked for evidence of policy coverage | Human resources produced a policy library. It could not show who had acknowledged which version | Challenge 4. A process that completes the task without leaving a record |
| Two sites reported the same hazard with different ratings | Both assessments were reasonable against their own local scale | Challenge 2. No shared risk criteria, so the ratings could not be compared or ranked |
| The board asked for the top five organisational risks | A list was assembled from four sources with four different scales | Challenge 2 again, surfacing where it costs most |
| An employee raised a concern informally to a manager, not through the channel | The manager handled it well and it was never recorded | Challenge 5. The formal route exists and is not trusted, so the organisation has no data |
| A supplier failed a client’s due diligence check | Procurement had onboarded them. Nobody had assessed them against the client’s requirements | Challenge 1. Three functions each held part of supplier risk and none held the whole |
Six events, six months, one organisation, and every one of them a governance risk and compliance challenge rather than an individual failure.
Not one of them was caused by somebody doing their job badly. Every one was caused by a join between functions that nobody owned, which is what GRC challenges look like from the inside.
The cost that does not appear in a budget
The tender in row two was lost. Not because the provider had poor policy coverage, but because it could not evidence coverage inside the response window. That is the manual process challenge converting directly into revenue, and it is the version of the argument executives act on.
How To Overcome These Governance Risk And Compliance Challenges
Four moves address all five GRC challenges, and the order matters more than any individual step. Organisations that start at step four and work backwards are the ones who configure a platform twice.
1. Proactively monitor critical controls
Start with the controls that would matter most if they failed, rather than trying to monitor everything.
For most Australian employers that is a short list: award and classification accuracy, policy acknowledgement currency, training completion for high-risk roles, incident closure, and supplier or contractor onboarding checks.
Monitoring means testing effectiveness, not confirming completion. A control marked complete and never tested is an assumption sitting in your register.
See continuous risk monitoring for how to run this between formal reviews.
2. Determine your organisational requirements
Before evaluating any system, write down what you actually have to do.
Which obligations apply, who owns each, what evidence each requires, and what your risk criteria are.
This is the step that gets skipped because it produces a document rather than progress. It is also the step that decides whether the next two work.
A requirements list built from your obligations makes vendor selection straightforward, because most of the demonstration becomes irrelevant.
3. Adopt centralised data management
Centralised does not mean one system on day one. It means one set of categories, one risk scale and one place where the aggregate is reviewed.
Organisations often achieve this with existing tools and a quarterly review before they consolidate.
The reason it matters is that GRC questions cross functions.
Whether workload pressure in one division is producing both grievances and injuries is unanswerable when human resources and safety hold separate records with different categories.
4. Switch to automated GRC tools
Automation earns its place last, once the first three are settled. Its real contribution is not speed.
It is that the record is created as a by-product of doing the work, rather than assembled afterwards from memory.
A policy acknowledgement captured at the moment it happens, tied to a person and a version, is evidence.
The same fact reconstructed from an email thread is an assertion. That difference is what an auditor, a regulator or a tribunal is testing.
The sequencing mistake that costs most
Buying the tool first. Software will faithfully encode whatever categories, scales and ownership assumptions you had at the time, including the ones nobody had agreed. Making those decisions first costs a few weeks. Making them twice costs a year.
A 90-Day Starting Point
You do not need a transformation programme to move on all five GRC challenges. You need a sequence and someone accountable for finishing it.
| Weeks | What you do | What you hold at the end | Which challenge it addresses |
|---|---|---|---|
| 1 to 2 | List your applicable obligations and name an accountable individual for each. Not a function, a person | A one-page ownership map, signed off by the executive | Roles |
| 3 to 5 | Agree one risk scale and one set of categories across departments. Write the risk criteria down | Ratings that can be compared and ranked | Framework |
| 6 to 8 | Build an obligations register with commencement dates and a named owner tracking change | Early warning instead of discovery through a client questionnaire | Regulatory change |
| 9 to 11 | Pick the five controls that matter most and fix their evidence trail first | Five controls you can evidence in minutes rather than days | Manual processes |
| 12 to 13 | Review what happened to concerns raised in the last year, and what it taught people | An honest read on whether the formal channel is trusted | Culture |
If you only have two weeks
Do weeks 1 to 2. Naming an accountable person for each obligation is free, takes an afternoon of meetings, and it is the step every other improvement depends on. Most GRC programmes stall because this was assumed rather than agreed.
Where A GRC System Helps, And Where It Does Not
Software resolves some of these GRC challenges directly and cannot touch others. Being clear about which is which saves both money and disappointment.
| Challenge | What a GRC system does | What it will not solve |
|---|---|---|
| Unclear roles | Forces a named owner on every risk, obligation and action, and makes unowned items visible | Deciding who that person should be. That is a governance decision |
| No framework | Holds one set of categories and scales that every function uses, so local variation is not possible | Agreeing what the scales mean in the first place |
| Regulatory change | Holds the obligations register with owners, dates and review scheduling | Noticing that something commenced. That still needs a person watching |
| Manual processes | Creates the evidence trail as a by-product, with dates, versions and change history | Improving the quality of what people enter |
| Culture | Makes behaviour visible through reporting rates, response times and outcome consistency | Changing it. Culture responds to what happens after a report, not to a system |
The right-hand column is the honest part of any governance risk and compliance challenges discussion.
Three of the five GRC challenges are decisions rather than capabilities, and no platform makes them for you.
What software does well is remove the excuse: once ownership, scales and evidence are enforced by the system, the remaining gaps are visible rather than assumed.
Sentrient is an Australian governance, risk and compliance platform that brings policy, training, incident and risk records into one system with audit-ready reporting.
Confirm current capability against the product documentation before relying on any specific function. For how these systems are selected and rolled out, see implementing risk management software.
Bringing It Together
The five governance risk and compliance challenges have not changed in a decade. Unclear roles, no framework, regulatory pace, manual processes and the culture gap.
What has changed is that Australian obligations increasingly test evidence rather than intent, which has moved the manual process challenge from an inconvenience to the most expensive of the five.
Three of the five are decisions rather than purchases.
Naming accountable individuals, agreeing shared risk criteria, and deciding what behaviour gets rewarded all cost time rather than budget, and all three have to happen before software can help.
If you are starting this week, do the ownership map. Pick your applicable obligations, name a person against each, and see how many produce a pause.
That pause is your GRC gap, and it is measurable in an afternoon.
Frequently Asked Questions
1. What are the most common governance risk and compliance challenges?
Five recur across Australian organisations: unclear ownership of the GRC process, the absence of a single framework so risk and compliance data cannot be aggregated, keeping pace with regulatory change, manual processes that complete work without leaving evidence, and a gap between stated culture and what actually gets rewarded. Three of the five are decisions rather than capability gaps, which is why software alone rarely resolves them.
2. How do you overcome GRC challenges?
In sequence. Monitor the controls that would matter most if they failed, define your organisational requirements from your actual obligations, centralise categories and risk scales so data can be compared, and only then automate. Organisations that reverse this order and buy a platform first usually configure it twice, because the underlying decisions get settled during implementation instead of before it.
3. Why do GRC programmes fail?
Most commonly because ownership was assigned to functions rather than to named individuals, so no one person can describe an obligation and its status. The second most common reason is that each function built its own approach, producing risk ratings that cannot be compared. Both failures are invisible until someone asks for a consolidated view.
4. What is the difference between governance, risk and compliance?
Governance covers how decisions are made and who is accountable. Risk covers identifying and controlling what could go wrong. Compliance covers meeting obligations and being able to evidence it. They are treated together because they share inputs: a single policy acknowledgement is a governance record, a risk control and a compliance artefact at the same time.
5. Do small Australian businesses need a GRC framework?
They need the decisions rather than the documentation. A small business still has to know which obligations apply, who owns each, what evidence each requires and what level of risk is acceptable. That can be two pages. Obligations such as work health and safety duties and wage compliance apply regardless of size, and a small organisation with one clear page is better placed than a large one with a framework nobody applies.
6. How often should we review our GRC framework?
Review the framework itself annually, separately from reviewing individual risks. Review risks on a cycle that varies by rating, and treat regulatory commencement dates as event triggers rather than waiting for the annual cycle. The most common failure is reviewing everything once a year, which reviews high risks too rarely and low risks pointlessly often.
7. Which GRC challenge should we fix first?
Unclear roles, in almost every case. It takes an afternoon, costs nothing, and every other improvement depends on it. A framework without owners produces a document, monitoring without owners produces alerts nobody actions, and software without owners encodes the ambiguity you already had.
8. Does GRC software solve these challenges?
It resolves two of the five directly and supports a third. Software enforces named ownership and one set of categories and scales, and it creates the evidence trail as a by-product of the work. It cannot decide who should own an obligation, agree what your risk criteria mean, or change what behaviour your organisation rewards. Those are governance decisions that have to precede selection.
Sources
- Fair Work Ombudsman, Criminalising wage underpayments and other issues
- Fair Work Ombudsman, Right to disconnect
- APRA, Prudential Standard CPS 230 Operational Risk Management
- APRA, Prudential Standard CPS 511 Remuneration
- ASIC, Who must prepare a sustainability report
- ASIC Regulatory Guide 280, Sustainability reporting
- OAIC, Statutory tort for serious invasions of privacy
- Safe Work Australia, Psychosocial hazards
- Australian Human Rights Commission, Positive duty under the Sex Discrimination Act
- Institute of Internal Auditors, The IIA’s Three Lines Model, 2020
- ISO 31000 Risk management, International Organization for Standardization
See how Sentrient supports governance, risk and compliance
Sentrient brings governance, risk and compliance together so policy, training, incident and risk records sit in one system, with the evidence trail attached to each.
Disclaimer: This article is general information, not legal advice. Australian obligations vary by industry, and work health and safety duties differ between states and territories. Commencement dates cited were checked against the responsible regulator in August 2026. Confirm your position with the relevant regulator or a qualified adviser before acting.
Read More About Governance, Risk Management, and Compliance:
- All You Need To Know About Governance, Risk Management, and Compliance
- From Panic To Precision: How Australian Organisations Are Using GRC Platforms to Prepare For Their Next Audit
- 6 Key Benefits Of Implementing GRC Management Software
- 5 Ways To Motivate Learner Engagement In Online GRC Training
- How GRC Strategies Protect Your Organisation from Risks and Liabilities
- 5 Keys to Effective Governance Risk and Compliance Management
