As we come to the end of every year, it is a natural time to reflect. This year more than any the reflections seem to be deeper and more important. Firstly, I want to wish everyone a happy festive season and health and happiness for 2022. It has been a time of great challenge for all in society, across the world, both personally and in business. For some the ultimate sacrifice has been paid and they are no longer with us. Our hearts go out to their families and friends. We also lost many businesses that were not able to survive the severe impact covid caused, despite government intervention.
We learnt a lot on many topics during the year but not all answers are yet clear, and the debates will continue. I thought I would reflect on three topics: the role of government, risk and what it means to society and business.
The role of government has continued to changeover time. Covid has brought this question centre stage. The polarisation of reaction to government, intervention with control of society, the flood of ‘printed money’ as well as the failure to be ready for a pandemic. The polarisation of opinion is very concerning as we seem to have lost the ability to respect other people’s opinions. Opinions are opinions and we need to be able to talk to each other to share perspectives and learn. The world always looks different through different ‘windows’ but it’s the same world. We need to have patience to allow others to hear our views and digest them. We also need to be prepared to change our views after listening to others.
Governments have one core role in my opinion, to protect its citizens and their freedom. From war and pandemics as well as those who are no able to look after themselves. The central enquiry in my view needs to be why were pandemic measures not funded and in place. So, we learn from this, for future pandemics as well as other ‘black swan’ events. The reason for inadequate preparation relates to my second topic, risk!
Society has been educated on risks, through the covid pandemic. It is like no other risk training program that has ever happened. We have all learnt about the ‘R’ rating and threshold. We have learnt about risk appetite, about risk trade-offs about risk mitigation as well as many other aspects. There are no rights or wrongs about risk. There is data, there are opinions, experts, political and personal and there are mitigations. We need to start applying this new knowledge to our daily lives. Our personal health, our financial stability, our lifestyle and our families. Life choices and risk are intimately intertwined. Governments choose not to fund pandemic preparation adequately resulting in great cost and lives. We all have choices for our personal risk mitigation.
Covid was like an earthquake on all businesses. It hit at the foundation of all and some survived and prospered, some got by and some failed. No one got their risk assessment totally right, but many got it totally wrong and only survived through government intervention. Businesses need to be able to survive without government intervention. We need some master classes on enterprise risks and routine reassessment of the risk appetite and controls and mitigations. One central theme of those who survived best was recurring revenue! This is possible in all businesses and those who are not operating a recurring revenue model, need to relook at their business models. More on this another day!
KRM22 was founded in 2018 to address risks in capital markets. Its offerings are pertinent to all industries, particularly its ‘Risk Cockpit’. As I hand over the CEO reins to Stephen Casner, so that I can take on the CEO role at Trading Technologies, the two companies are well placed to prosper and be great partner for you. They have recurring revenue, not reliant on government subsidies, and between them have a comprehensive understanding of risk, hedging and execution services.
Have a great festive season and we look forward to helping your business grow in 2022 and beyond.