Description
In the context of Governance, Risk Management, and Compliance (GRC), portfolio management involves overseeing a set of investments or projects that align with organizational objectives while ensuring compliance with legal and regulatory standards. This process includes identifying, analyzing, and managing risks associated with each investment. Effective portfolio management enables organizations to allocate resources efficiently, prioritize projects based on risk and return, and ensure that all activities comply with relevant regulations. For instance, a financial institution must manage its loan portfolio by assessing credit risks and ensuring adherence to banking regulations. Similarly, a technology firm might manage its research and development projects to ensure they align with corporate governance standards and risk appetite. The ultimate goal is to maximize returns while minimizing risks and ensuring compliance, which is critical in today’s regulatory landscape.
Examples
- A bank managing its loan portfolio by evaluating borrowers' creditworthiness and adhering to Basel III regulations.
- A pharmaceutical company prioritizing R&D projects based on potential market impact and compliance with FDA regulations.
Additional Information
- Effective portfolio management helps organizations to achieve strategic goals while mitigating risks.
- Regular reviews and audits are essential to ensure that all investments remain compliant with evolving regulations.