Three things must be in you favor to have any degree of success on what you know is less than perfect settings.

1. You must have a floor that slopes and drains water easily away from all your walls. Note: a drain in the floor itself may be a code issue check it out.

2. You will need to install a baseboard and be sure to prime, seal, and caulk under and place bead of caulk next to the floor/baseboard seams and the baseboard/drywall seams to shed water asap. Make sure the drywall is up off the floor 1/2"+ to help.

3. You will need to prime and paint the drywall with a gloss or semi-gloss paint to keep water from penatrating the rock/paper surface. I assume you will have taped and filled all holes before doing this.

This still is a short cut and is not the kind of material to have near water, period. I did it as a get by item and planned on replacing the drywall before I moved out. It lasted 5 years with not a wet spot.

If you notice that the drywall looks damp and "you will know it" remove it immediately and replace because it is like a sponge and will aid in rotting the wood behind it. I had cement walls with furring strips.

You would be better off from the beginning using some of the sheet goods available for bathroom remodeling.

Or as I now have done in a recent home used stainless steel sheets and have enjoyed the reflected light and the ability to wipe grease, paint overspray off with a cleaner etc.