KRM22 partners to tackle people and culture risk

Keith Todd, executive chairman and chief executive officer of KRM 22, knows a lot about risk. Having founded FfastFill in 2002 and run that firm until he sold it to ION Trading in 2013, Todd has spent the past five years working with his team at KRM22 on developing a risk cockpit for trading houses, offering senior management a one-stop-shop platform to monitor all the risks faced by their firm.

Historically, risk management at financial firms comprised a handful of broad categories such as market risk, credit risk and operational risk. More recently however, attitudes to risk are changing and new buckets of risk are emerging.

As a holistic risk platform supplier, it is incumbent upon Todd and KRM22 to track emerging categories of risk and move to address these where appropriate.

A recent example is KRM22’s partnership with Kintail Consulting, a UK-based leadership and corporate culture specialist, to tackle the growing threat of people and culture risk.

The partners plan to combine the expertise of Kintail Consulting managing director and founder Chris Cherrington with KRM22's SAAS-based risk platform to offer human resources managers at financial firms a single view “of all people and culture objectives, initiatives, operational processes and risk including oversight across compliance obligations”.

Todd believes that the importance of people and culture risk was first exposed by the financial crisis of 2008, which led to many regulatory reforms aimed at preventing further scandals by undermining the working cultures that fostered the practices that caused the crisis in the first place.

More recently, the COVID-19 pandemic has created additional risks linked to managing people and maintaining corporate cultures and values because most staff have been working from home for the past 11 months.

Todd said: “Wherever you are around the world, the environment is dramatically changed and has made the challenges much more complicated than they were before such as how do you motivate people when you only see them remotely. A topic that has garnered a lot of press but, which is only one strand, is mental health. These are all factors that have become more challenging as our lives have changed over the past 12 months.”

“This was why KRM 22 felt it was appropriate to help bring together the strands of this topic in the risk cockpit, to help HR directors manage this portfolio of activities they are responsible for in this complicated environment.”

Cherrington, who has been running Kintail since he founded it in 2012, added: “This morning I was on a call with an organisation to talk to them about collaboration in their leadership team and the culture in that team, and that has undoubtedly become more challenging over the last year. Collaboration and team-work have been challenged because people haven’t been working together.”

Todd said the alliance is consistent with his firm’s approach to draw upon on domain experts, something the firm has done widely over the past three years through acquisitions and partnerships.

“KRM22 set out to integrate the full enterprise risk suite including market risk, credit risk, compliance and people and culture risk, around operations and technology risk.”

He continued: “We have expertise in compliance and work with consultancies, and in market risk, we have some great subject matter experts. They work in those two sectors alongside our SAAS-based platform but, in the case of people and culture risk, we don’t have the experts such as Chris so it was important to find a partner that could bring his expertise to combine with our technology.”

Cherrington said: “From an HR professional’s perspective, if there’s technology that enables them to see how close they are to achieving the objectives around people and culture and they are able to manage the risk associated with achieving those, that is a great thing.”

As a specialist in the field, Todd has an alternative take on risk: “As we say in KRM22 risk is alpha. When people talk about risk, they always talk about the down-side, but risk, including people and culture, is central to the business. If one manages better your portfolio of activities including risk, you will deliver greater performance than if you try to sweep it under the carpet.”

Looking ahead, the partnership will rely on Cherrington’s expertise and KRM22’s enterprise risk platform but Todd is keen to hear from prospective users.

“We want people will come to us and engage in this conversation. We think there is an opportunity with all sizes of companies but, in practical terms, tier two and tier three rather than tier one institutions are the primary initial target. We have great customer relationships already so we know compliance people and market risk people in these organisations already. So we can help the HR director link up with the compliance manager for challenges such as SMCR for example.”

Todd concluded: “Over the next few months, you will see some announcements as we move forward. For anyone interested, I would encourage them to engage in the conversation. We are not trying to solve every problem overnight but we have a framework, that is SAAS-based so it can be engaged on in a small scale, focused way or on a large scale over time.”

To listen to the full interview with Keith Todd and Chris Cherrington, click here: https://youtu.be/CODXDozeoJc