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

KRM22 listed on AIM, via an 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: enterprise, market, compliance, operations and technology, shareholder feedback, debt provider feedback and employee participation which has led to a clearer definition of KRM22’s 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 its business develops to fit the necessary criteria.

In adopting Principle 1, KRM22 is assisting investors to obtain superior returns.

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

The Company’s CEO and CFO meet institutional shareholders, fund managers and analysts at least twice a year to understand how the strategy and the Board’s decisions impact on and are received by investors.

The Annual General Meeting provides an opportunity for all shareholders to meet the Directors and raise any questions.

finnCap act 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 advisor of the business.

Broker: finnCap is also the appointed broker of KRM22.  In this role finnCap facilitate communications with existing and potential new investors.  The CEO and CFO 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 communications within the Annual Report.

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

In adopting Principle 2, KRM22 assures investors that the Company is aligned to their needs, expectations and values.

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

The Board believes that KRM22 should be seen as an asset to its stakeholders, aligned with their values.  This is why the Board plans to establish of an Environment, Social and Governance (“ESG”) programme.

KRM22's ESG programme will be centred around meeting the United Nations 17 Sustainable Development Goals (“SDGs”) (https://sdgs.un.org/goals).  In order to work towards these SDGs, KRM22 will promote a culture of transparency and discussion amongst all four stakeholder groups.

The first phase of the ESG programme, which KRM22 is in the process of undertaking, is an exercise to benchmark the Company against the SDGs with the aim of establishing the areas of focus for the remainder of the programme.  During this benchmarking phase, each stakeholder group will be considered and if necessary, consulted to establish alignment with their views and values.

In addition to the ESG programme, KRM22 continually gathers feedback from all stakeholder groups.

Methods of two-way communication include:

Investors: see Principle 10.

Customers: Regular meetings with existing and potential customers by the Revenue and Customer Service teams.

Team: KRM22 communicates regularly with the cross-country, multi-national and diverse team in multiple ways.  Monthly internal company meetings are held where the Executive team update all staff on business-wide issues and encourage team participation.  In addition, KRM22 uses centralised internal systems including team-wide easy-to-use communication tools, formal performance appraisals are completed two times a year, with informal appraisals completed throughout the year, and “all-employee” announcements (for example, on acquisitions/investments, new customer contract wins, customer projects and other business-wide news).

Principle 3 provides the main methodology of meeting KRM22’s ESG goals across all four stakeholder groups.

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

Good effective risk management is part of KRM22’s DNA and the Company has built the Enterprise Risk Cockpit as a product to market and sell and also use internally to effectively manage risk throughout the Company.  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, compliance risk and enterprise risk experts.  As a company dedicated to risk management technology, the KRM22 team has a high understanding and experience in managing risk.

Enterprise Risk Cockpit: The Enterprise Risk Cockpit is an application that KRM22 has developed to allow CEOs and their teams to see real-time risk statuses and enable them to take action.  KRM22 has implemented the Enterprise Risk Cockpit internally to monitor and manage risks.

Controls and processes: The Directors are continually reviewing controls and processes in all key areas on an ongoing basis.  When an acquisition is completed, the acquired company’s control’s and processes are reviewed and are aligned with group policy as quickly as possible, with a target of within three months from the date of acquisition.

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

There is clear division of responsibility between running of the Board and executive responsibility for running the Group’s business.  The principal role of the Chairman, Keith Todd, is to manage and provide leadership to the Board of Directors of the Company and is accountable to the Board.  The principal role of the Chief Executive Officer, Stephen Casner, is to make major corporate decisions, manage the overall operations and resources and act as the ultimate point of communication with stakeholders.  There is one other executive director, Kim Suter, Chief Financial Officer of the Company.

The Company has three independent non-executive directors: Sandy Broderick, Garry Jones and Steve Sparke.  The non-executive directors normally do not have any day-to-day involvement in the running of the business but are responsible for scrutinising the performance of management in meeting agreed goals and objectives and monitoring the reporting of performance.  All directors are able to allocate sufficient time to the Company to discharge their responsibilities as directors.

The Board believes strongly that a mix of professional skills, risk management experience and capital market understanding make a difference, as does diversity, and one of the responsibilities of the Nomination Committee is to undertake an annual assessment of Board Effectiveness which includes a review of skills, experience and composition.

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 the maturity and growth stage and for an AIM-listed business.

Skills: Of the six Directors, five have worked within capital markets, two are qualified accountants and one is a qualified lawyer.  All six 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.  The last assessment was completed in April 2022.  The Non-Executive Directors assessed the Board on:

• Risk management (including Going Concern);
• 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; and
• Director induction and training.

The Nomination Committee regarded the Board’s performance, effectiveness and composition as appropriate considering the size of the Company however they will continue to monitor the Board’s construction and remit.  

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

KRM22 has brought together different business and nationality cultures, through acquisitions and its own organic growth, and therefore the Board is very people-focused, including all stakeholders whether internal or external.

Team

The aim of the Directors is to build and maintain 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; and
• Clear accountabilities for all.

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

KRM22 has adopted corporate policies, staff handbooks and accounting policies which are aligned with the needs of the Group, 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.  Each member of the team is expected to sign and adhere to certain policies, including the Business Code of Conduct which outlines key responsibilities in terms or ethics.

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 CFO.

As discussed in Principle 3, KRM22’s ESG programme is focused on meeting the United Nations 17 SDGs which promotes a strong ethical culture within all areas of the Company.

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 fulfil 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 Board is provided with monthly financial and non-financial information for monitoring performance and to make strategic decisions.  The Board has a formal schedule of Matters Reserved for the Board including acquisitions, share subscriptions and approval of the annual budget, together with standing items such as health and safety, conflicts of intertest and concerns reported through whistleblowing procedures.  The Board meets for scheduled Board meetings ten times per year, plus ad hoc meetings as required.

Risk Management

The Company uses its own Enterprise Risk Cockpit software tool to assess and monitor risks.  This has gradually replaced 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 KRM22 as a whole.

Independence

The Board is comprised of three Executive Directors and three Non-Executive Directors.  Three of the Non-Executive Directors are considered independent as they 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.

Board committees

The Directors have 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 and not be part of the decision making.

See the committees here

Principle 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 is published in the investor information section of the KRM22 website.  This includes AIM rule 26, significant shareholder information and details of our Directors’ roles and experience.

The CEO and CFO meet with institutional fund investors to communicate progress and plans at least twice a year and have met them at other times where appropriate.  In addition, the CEO and CFO meet with Kestrel Partners LLP (the “Security Agent”) to report on financial covenants and forward-looking compliance information as part of the reporting obligations of the Convertible Loan Agreement dated 15 September 2020 (the “Convertible Loan”).

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

The report of Board Committees is included in our Annual Report and Accounts each year.  When General Meetings are held, the Directors publish the results of votes on the KRM22 website in the Investor Information section.