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Information

The Directors have established an Audit Committee, a Nominations Committee and a Remuneration Committee with formally delegated duties and responsibilities to operate with effect from Admission.

Audit Committee

KRM22 Audit Committee Terms of Reference

Chairman: Matthew Reed

Matt’s qualification as a Chartered Accountant (Australia) together with his experience as COO of the Business Growth Fund provide Matt with the financial acumen to understand and challenge the financial reporting of the business. Matt is considered to be an independent non-executive director.

Members: David Ellis and Jim Oliff

Remuneration Committee

KRM22 Remuneration Committee Terms of Reference

Chairman: Alexander Broderick

Sandy’s AIM-listed Board experience and successful career in capital markets provides him with the acumen to understand and challenge the senior management needs of KRM22. Sandy is considered to be an independent non-executive director.

Members: David Ellis and Jim Oliff

Nominations Committee

KRM22 Nominations Committee Terms of Reference

Chairman: Alexander Broderick

Sandy’s AIM-listed Board experience and successful career in capital markets provides him with the acumen to understand and challenge the senior management needs of KRM22. Sandy is considered to be an independent non-executive director.

Members: David Ellis and Jim Oliff

Jim Oliff, non-executive director, brings over many years of capital markets experience and knowledge. Jim is one of the founding investors and holds founder shares. Therefore he is not considered independent and for this reason, and this reason only, he does not chair any of the three Board Committees.

Share Dealings

The Directors comply with Rule 21 of the AIM Rules for Companies relating to Directors’ dealings and  take all reasonable steps to ensure compliance by the Group’s applicable employees.

The Company has adopted and will operate a share dealing code for Directors and Group employees in accordance with the AIM Rules for Companies.​

Corporate Governance Framework

KRM22 Plc has adopted the QCA Code for small companies for its Corporate Governance framework.

Where appropriate for its size, the business may adopt additional governance included in the full UK Corporate Governance code.

Quoted Companies Alliance Corporate Governance Code

As Directors, we are responsible for setting the strategic direction of the business, managing risks across the business and monitoring performance and progress. In parallel, we are responsible for good corporate governance, clear shareholder and stakeholder communications and monitoring the effectiveness of the executive Directors.

We believe the adoption of these principles helps us deliver KRM22 the Global Risk Platform strategy and our risk management vision by encouraging:

  • the right mix of skills and professional experience within the board of directors, particularly of the independent directors
  • a deep understanding of capital markets and of risk management in the five risk domains;
  • healthy challenge and debate of the KRM22 strategy and plans to achieve it;
  • transparent communications with the multi-country teams and external stakeholders;
  • a robust framework for internal controls, processes and policies.

As KRM22 is five months old and growing fast, not all processes and policies are fully developed and adopted. The Directors have agreed a plan for the implementation of appropriate policies and all key areas will be completed well before the end of the first anniversary of the IPO.

To help formalise and structure our practices to fulfil these responsibilities, we chose, at IPO on 30 April 2018, to adopt the Quoted Alliance Association (QCA) corporate governance guidelines and have since implemented processes to adhere to the 10 QCA principles. 

As the business makes more investments and grows, we will review these processes and adapt them to meet the needs of stakeholders and the business.

To help all stakeholders understand how KRM22 adopts the QCA guidelines in every day operations, the information below follows the 10 QCA principles within the three QCA focuses of: Deliver growth; Maintain a dynamic management framework; and Build trust.

Directors
KRM22 Plc
Date: 27 September 2018

DELIVER GROWTH

Principle 1: Establish a strategy and business model which promotes long-term value for shareholders

KRM22 listed on AIM, via IPO, on 30 April 2018. As part of this process, the Board determined the long-term vision of KRM22 and detailed the steps to achieve that strategy.

Since the IPO, the Board has refined the strategy, based on customer feedback, additional input from risk management experts from the five KRM22 domains of risk, shareholder feedback and employee participation.

This led to the clearer definition of KRM22’s strategy and to a re-branding and refocus of communications in September 2018.

See the KRM22 Vision and strategy.

Corporate status: KRM22 (KRM:L) is a closed-ended investment company (CEIC) listed on the AIM of the London Stock Exchange. This means that the number of shares in the company are known and the shares are traded on AIM. KRM22 expects to convert to an operating company when it fits those criteria.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Company’s executive directors meet institutional shareholders, fund managers and analysts at least twice a year.

Thanks to the fast growth of KRM22 since IPO, with three acquisitions of, and one partnership in, risk management technology business already completed, such meetings have been more regular.

The Board also intend to build wider shareholder communications and will be working towards this. In addition, private investors will be encouraged to participate in the Annual General Meeting.

KRM22 listed on AIM via IPO on 30 April 2018. The Board appointed finnCap as the company’s NOMAD and broker.

Nominated Advisor (NOMAD)

Nomads are approved by the London Stock Exchange and must meet eligibility criteria set out in the AIM Rules for NOMADs. In their role, finnCap advises and guides the KRM22 Board on its responsibilities as an AIM listed business and undertakes due diligence and works as the primary regular of the business.

Broker

finnCap is also the appointed broker of KRM22. In this role, finnCap facilitate communications with existing and potential new investors. Keith Todd and Karen Bach regularly meet investors together with representatives of the broker. finnCap also advise KRM22 on shareholder communications on its website, all RNS releases (Regulatory News Service – AIM) and will guide, along with the auditors, communications within the Annual Report.

Investor queries can be directed to KRM22 by email to InvestorRelations@krm22.com.

All advisor details: including those of KRM22’s NOMAD, Auditors and Investor press relations.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

The Board believes that delivering fit-for-purpose software applications to customers is the key to KRM22’s success. To achieve this, KRM22 needs to:

  • Build applications that meet customer needs: the KRM22 Business Development and Support teams listen to those customer needs at regular meetings and through effective systems and processes;
  • Recruit, train and motivate employees to build the software applications;
  • Communicate clearly the KRM22 vision and strategy internally and externally;
  • Communicate speedily with teams when new acquisitions/investments are made, Such as Prime Analytics or Irisium;
  • Listen to and work closely with all partners, such as Ascent and its professional advisors;
  • Listen to all external and internal stakeholders and communicate clearly.

In the short time since IPO, KRM22 has gathered feedback from customers, employees, advisors and shareholders. Not all processes and communications are implemented but the Directors are working towards a fully supportive and communicative culture.

At this stage in its growth, KRM22 has few suppliers as its biggest asset are people, whether employees or freelance contractors. KRM22 communicates regularly with this cross-country, multi-national and diverse team in multiple ways.

Methods of two-way communication include:

Investors: see Principle 10 below

Customers: regular meetings with existing and potential- customers by the Business Development team in Europe via London, N America via New York and Chicago, and Asia via Singapore, Australia and Hong Kong.

Employees: KRM22 is building efficient internal systems including team-wide easy-to-use communication tools such as, regular performance appraisals using a simple regular tool versus a laborious annual appraisal, “all-employee” announcements (for example, on acquisitions/investments and other business-wide news).

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

Good effective risk management is part of the KRM22 DNA as the company’s vision is to build tools to achieve this for KRM22 customers.

Therefore, risk management is embedded in the culture of not only the KRM22 Board but also the whole team.

Director experience in risk management: All the directors have experience of building growing multi-national businesses and understand the risks and challenges that come with the journey. Their sector and professional mix of skills is particularly relevant – see Principle 6.

Team experience in risk management: the subject matter expertise within the multi-national team is very strong and includes market risk, regulatory risk and enterprise risk experts. As risk management is KRM22’s business, the team has an unusually high understanding and experience in managing risk.

Risks identified at IPO: as part of the admission process, the Directors identified the risks in achieving the KRM22 Global Risk Platform strategy. See pages 22-23 of the Admission Document.

Risk Cockpit: the Risk Cockpit is an application that KRM22 is developing to allow CEOs and their teams to see real-time risk statuses and enable them to take action. KRM22 will use the Risk Cockpit internally to monitor and manage risks.

Controls and processes: As KRM22 is five months old and growing fast, not all processes and policies are fully developed and adopted. The Directors have agreed a plan for the implementation of appropriate policies and all key areas will be completed well before the end of the first anniversary of the IPO.

MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK

Principle 5: Maintain the Board as a well-functioning, balanced team led by the Chair

Role and composition of the board:

Keith Todd is Executive Chairman and CEO and as such, has two roles in the business:

  • Chairman: The principal role as the Chairman  is  to  manage  and  to  provide  leadership  to  the  Board  of  Directors   of  the  Company.  The Chairman is accountable to the Board.
  • CEO: the principal role as the CEO is to make major corporate decisions, manage the overall operations and resources, and acting as the ultimate point of communication with stakeholders.

QCA guidelines do encourage these two roles to be held by two different people. Keith Todd’s experience helps him perform these two roles with self-challenge but in addition, the Founders agreed that a higher ratio of non-executives would encourage healthy challenge and debate and provide additional independence.

For this reason, the Board has three executive directors (the Founders) and four non-executive directors, three of whom are independent.

The Board believes strongly that does the mix of professional skills, risk management experience and capital market understanding make a difference, diversity does too.

Of the seven directors, one is female and three nationalities are represented.

See the KRM22 Leadership team.

Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The Directors consider that the mix of professional skills, risk management experience and capital market understanding is key to the effectiveness of the Board and its Committees. As such, the Board is very satisfied that the resulting mix of skills is suited to the sector, to maturity and growth stage and for an AIM-listed business.

Skills: Of the seven Directors, six have worked within capital markets, three are qualified accountants and two are qualified lawyers. All seven Directors have experience of growing businesses and how risks need to be managed within a fast-growth environment.

The Directors maintain their professional experience and skill set through Continued Professional Development (legal and financial), and constant contact with customers, sector experts and industry influencers, and by listening to feedback from all stakeholders.

Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

The KRM22 Board has three Board Committees, each consisting of the three independent non-executive directors. See more details in principle 9.

The responsibilities of the Nomination Committee include an annual assessment of Board Effectiveness. This annual assessment has not yet been undertaken as KRM22 is not yet one year old and the operations of the Board are forming, adapting and continuously improving each month.  The Directors intend to assess the Board on:

  • Risk management
  • Adequacy of management information to make decisions and manage risk;
  • The effectiveness of Decision processes and decision making;
  • Board composition (mix of skills, experience, diversity, and adequate succession planning);
  • The effectiveness of each Director on the Board, whether executive or non-executive;
  • Board communication and organisation;
  • Director induction and training.

The Board does not yet have a formalised success plan but intends to implement one before the first anniversary of the IPO. This will help the team become established and allow the Directors to identify the key areas of risk that success planning can manage.

The three Founders of the business are all very close to the business and make collective strategic decisions which they then recommend to the Board. This three-way, collegiate interaction means that the risk of succession is a little mitigated, as the business does not depend on one single leader.

Principle 8: Promote a culture that is based on ethical values and behaviours

KRM22 is growing fast, bringing together different business and nationality cultures to build the Global Risk Platform. To achieve this, the Board is very people-focused, including all stakeholders whether internal or external.

Team

The aim of the Directors is to build a culture of transparency and performance, and the Directors believe that empowerment of employees is key to delivering the strategy.

KRM22’s three key company values are:

  • Focus wins
  • Business is a team game
  • Clear accountabilities

All employees have access to an internal HR system which provides the full organisation chart across the group. This helps each employee understand where they fit within the organisation and how their work contributes to the KRM22 growth and performance.

As the business grows, KRM22 is adopting corporate policies, employee handbooks and accounting policies. These are being defined and adopted to align with the rapid growth of the business and to align with the needs of each country and team. As each business is acquired, the team is included in internal communications and is integrated/transitioned into the communication and systems of KRM22.

In addition, for full transparency, the Board has adopted whistleblowing policies for employees and external stakeholders, including the choice of reporting to and excluding the COO.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

The Board of Directors is responsible for setting the strategic direction of the business, managing risks and monitoring performance and progress. To help fulfill these responsibilities, the Directors have implemented independent Board Committees which together with the Matters Reserved for the Board, provide structure and formalisation of corporate governance.

The Matters Reserved for the Board include Board approval for acquisitions. For the acquisitions completed to date, the Board has received due diligence information undertaken by employees and external advisors to provide the right information to make the right decisions for the business.

The financial information provided to the Board for monitoring performance and to make investment decision, is improving as the internal team and processes are built.

KRM22 is adopting corporate policies, employee handbooks and accounting policies. These are being defined and adopted to align with the rapid growth of the business.

In addition, the Board has adopted whistleblowing policies for employees and external stakeholders, including the choice of reporting to and excluding the COO (see: whistleblowing contact details).

Risk Management

The Board is intending to use its own Risk Cockpit software tool to assess and monitor risks. This will replace any list of risks in Excel or Word (often the basis for a “Risk Register”) and deliver much more visibility to the Directors of the performance of the acquisitions and the KRM22 group as a whole.

Independence

The Board is comprised of three executives and four non-executive directors.  Three of the non-executive directors are considered independent as they do not hold shares or options in the business and have not previously worked with the executive team.

Under their letters of appointment, the non-executive directors have a time commitment of two days per month and the executives are full-time (with time allowed for agreed external professional activities). All directors are able to allocate sufficient time to KRM22 to fulfil their responsibilities.

The Directors meet at least monthly, with a minimum of 10 meetings per year. To date, the rapid evolution and growth of KRM22 have led to more regular meetings and communication.

Board Committees

At IPO, the Directors established an Audit Committee, a Nominations Committee and a Remuneration Committee with formally delegated duties and responsibilities.

None of the executive Directors are members of these Committees and, when invited to attend Committee meetings, it is to present information but not part of the decision making.

See the committees here.

Principal 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

All financial reports and publicly-available information are published on our website within the investor information section. This includes AIM rule 26, significant shareholder information and details of our Directors’ roles and experience.

At IPO and our recent fund raising, Keith Todd and Karen Bach met with institutional fund investors to communicate progress and plans and have met them at other times where appropriate.

The Directors believe that these meetings provide valuable two-way communication and allow investors to provide feedback. Other investors are provided a channel for communication via the KRM22 investor information on the website and via email contact on InvestorRelations@krm22.com.

The report of Board Committees will be included in our Annual Report and Accounts each year, with the first to be for the year ended 31 December 2018.

When General Meetings are held, the Directors will publish the results of votes on the KRM22 website in the Investor Information section.

Internally KRM22 uses multiple team-tools to communicate – see Principle 8.

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