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welcome to in Good Company I'm Nikola

tangan the CEO of the Norwegian subone wealth fund now today I'm joined by

David schrimmer the CEO of eleg which

contains the London Stock Exchange now this company has been at the Forefront of financial markets for centuries

it's now a global Powerhouse

David is a New Yorker with a really interesting background and we'll explore some of that uh

but uh David I'm so happy that I managed to convince you to come on when

we l at dinner in London Nikolai it's a pleasure to be here thanks for having me

now eleg contains lond on Stock Exchange but it also does a lot of other things

so what what does the company actually

do let's kick off with the basics

so we are one of the world's or I'll say the world's leading financial markets infrastructure and data provider

we uh have a number of different businesses that serve customers buy side sell-side financial institutions and corporates governments across the trade life cycle across the value chain

so just in terms of the specific businesses that we are in we have uh data and analytics

we're the number one provider in the world of for example real-time financial data uh

we have an index business footy Russell uh which is one of the world's leading uh index businesses

we have a risk intelligence business which provides the leading content set for what banks use for background checks and kyc uh AML

you put all those businesses together that's our our uh data and analytics offering that's roughly 70% of our Revenue

we have uh Capital markets execution venues across multiple asset classes

so you touched on the London Stock Exchange uh a leading execution venue and equities

uh we have FX execution venues both dealer to customer and dealer to dealer uh in foreign exchange

and then we also are the controlling shareholder of trade web which is one of the world's leading electronic execution venues for fixed income

so what are the big macro trends that drive your business

so the uh inflation uh situation that we've had over the last several years moves in interest rates all those kinds of uh Dynamics have an impact on our business generally to the positive side

in other words volatility tends to be fairly good for our business

so we have this Foundation of um 70% of our Revenue very uh stable and growing and then we get incremental upside when there is volatility in the markets

but uh if you take a step back from that and uh get your question on the the different Trends uh data and demand for data uh obviously a lot of discussion about AI these days and how does that play into what we're doing uh

the quality of for example large language models is only uh is entirely uh dependent on the quality of the data that goes into them uh

and so there's more and more focus on data quality uh

and given what we do given our focus on data Integrity data lineage data a auditability uh that's proving to be a big driver uh for us as well

I think uh some of the geopolitical Dynamics also uh they tend to lead to uh more volatility and they tend to also lead to more demand for data as people are trying to navigate the global situation

we are seeing a bit of a trend U when it comes to UK companies moving to the US

why why do you think that is

well there is a uh there's a stronger narrative around that than the facts would actually suggest yeah

and I think it's important to recognize that

but having said that we have seen a few U moving to the US

there are a couple things uh driving that um

I think it's a little bit different in each case

in uh one or two cases it's been because of a sense of uh most of the market being in the US for certain companies uh

in some cases it has been people don't like to talk about this too much but in some cases it's been because of uh compensation standards in the US

so easier to pay easier to pay higher salaries

yes the salaries for executives in the US tend to be uh in some cases a multiple of what they are uh in the UK

so if you're a fintech or biotech company that's come out of one of the great universities in the UK and you can uh list in London um or you can list in New York

and you list in New York you might get paid three or four times more um than you get paid in London

and in London you might be criticized for it because of some of the cultural elements here which we should probably talk about that can create a a dynamic where people are um more attracted to the US environment

there are a number of factors uh and I think that this the pendulum will swing

there are number of factors that make the UK frankly a much more attractive listing venue uh

but there is a I'll call it a cultural discussion going on right now in the UK about this particular issue

from y Point how have you seen the the backlash against ESG considerations

so I think a lot of the underlying Trends or changes that are included in this uh unwieldy acronym of ESG are still moving forward

I think ESG as a concept is just becoming more sophisticated

I don't see there there's there's the politics in the US uh around climate uh and this sort of anti-woke dynamic uh in certain aspects of us politics

I think uh if you break it down in terms of the elements of what goes into ESG climate continues to be an issue

and although people are talking about it less I think companies are still focused on it and recognize it's a multi-decade challenge and we have to figure out how to work through a transition

I think on the social and governance um most companies are focused on uh creating an inclusive environment in the interest of attracting employees uh

it's a it's an employee value proposition uh

and so I think the political noise or backlash will continue uh sort of in its own sphere uh but if you are a company looking to attract Talent you want to make sure you have an attractive environment

have you got a view on block chain a Bitcoin yes uh

uh

we did not move aggressively into uh Bitcoin in its early uh boom years we sort of expected it to have I don't want to say we we were predicting uh the decline but uh when you have that kind of bubble or boom uh inevitably then it tends to flame out and then there's uh a return of a more sober approach and probably a more regulated approach

and we're kind of seeing that that play out in the environment today

so uh we work with uh digital Assets in a number of different areas uh

first of all I mentioned earlier that we are the number one provider in the world of real-time pricing that includes pricing of digital assets

we also are uh working through regulatory approval to clear digital assets through our clearing house uh

each of these areas is really about trying to facilitate instit tional customers dealing with digital assets whether that's Bitcoin or or other digital Assets in a very credible regulated manner uh

and so we're not uh given who we are we're a highly regulated institution uh we're very focused on working closely with The Regulators

we're not going out there trying to build something in the world of defi uh that is unregulated uh

we're very focused on doing things in a transparent way uh that institutions that are highly regulated are comfortable with

we are also working on building uh and this is a longer term project but building digital Market infrastructure uh

and doing it with the industry and building uh what we describe as an asset class agnostic digital Market infrastructure so that the industry can use it

that means it will have the full value chain so tokenization up front execution basically uh settlement and then custody built into that market infrastructure uh

doing it in partnership with the industry is the way we typically work doing it in a regulated Manner and doing it in a way that can be applicable as I said uh across different asset classes

it's just the infrastructure that would work with any particular asset class

David moving on to CEO pay which is something we feel pretty strongly about

what what kind of Reflections do you have when it comes to C

so from our perspective and this ties in uh importantly with the notion of London as a Global Financial Center uh

we think that it needs to be globally competitive and that then quickly gets into a uh a discussion around what's going on in the US uh is the as CEO pay in the US uh excessive

is is it excessive

I would say there there are uh some examples where you look at the numbers and you say does why does someone need to be paid that amount for for what they're doing

fundamentally it's uh it's about creating value for shareholders uh that's how I think about it personally uh and that's how we think about it conceptually

but we operate in a global market uh

and so whether it's CEO pay or whether it's uh pay for senior Executives we have been bringing in a lot of talent as we've been transforming Elsa uh

and a lot of the talent that we have been looking at uh is working in the US uh and we need to make sure that we can compete uh in terms of attracting that Global Talent uh

I think that applies to us but that that applies to companies across the UK uh

and I think there's needs to be a there's a a cultural aversion uh in the UK and this you see this in the media you see this in some of the proxy agencies and a very different standard to pay in the UK uh versus pay in other jurisdictions particularly in the US

and so our uh we have been involved in a growing dialogue uh on this topic in the UK because I think it's a very important element to making sure that the UK continues and London continues to remain globally competitive and attracting worldclass Talent

do you think American cosos are better than um European cosos

uh I would not make that generalization no

speaking as an American uh I I don't but I don't think think I can make that generalization now no

but certainly when you look at the pay difference you would have thought there'd be a heck of a lot better right

if the pay difference was the indication uh you would think

I do think there are some cultural differences between American corporate culture and uh UK corporate culture

what do you think is the essence of the difference

I think in the US success is more celebrated and failure is more tolerated

and I think there is greater RIS risk aversion uh in the UK and they sense that uh it's better uh to avoid failure uh and take less risk uh in the UK

and there's less celebration of extraordinary success in the UK

and well you should you should you should come to Norway and visit

I imagine it's different uh uh in many different cultures but uh in terms of that kind of comparison between uh the US and the UK and I've certainly noticed the difference in my time here

do you think shareholders actually have a an impact here and what they say on cop

I mean we've been vocal for a long time it's it's uh it's not really moving

well I think you know we pay attention to it

I can't uh can't speak for others we certainly pay attention to it

as I mentioned earlier I think it's about aligning the pay of Executives with the shareholder experience uh

and I would say it's important that that is aligned over the medium to longterm within the construct of what I was saying about um Global competitiveness uh

I think it's important to be able to compete on a global stage uh and attract Talent globally

but within that construct I think uh the UK Market people pay a lot of attention to that uh and I would say perhaps so much attention to that uh when these differential standards are applied across geographies it makes it hard to attract Talent from the US

moving on to um data analytics you know a huge part of your business is in this field

how how will AI change your business

so we are embedding AI in a number of different parts of our business

it's uh a capability that we have been working with in a few different areas for a while uh and whether it's uh improving our operations uh improving our customer service improving some of the customer products

let me give you a couple examples uh

we have we get over a million customer queries a year given the breadth of our product offering uh

we get questions about all kinds of things

so someone may call us up or email saying how do I uh get pricing and then uh to a chart for uh Indonesian versus Malaysian government fonds um

that's something that what we're doing now we're using basically large language model capability to answer that question for our customer service reps

and as that model gets better and better we are going to expose that directly to the customers um

and so that's one example

we have a uh due diligence business that does due diligence reports for uh our customers

one of the complaints we got uh about the product was that the reports were not written well enough the English writing was not good enough uh

we now have uh those being written WR using llm capabilities makes the the actual writing much better

and then we have the people going through the reports who might English might not be their first language but they're factchecking them and making sure that the quality of the data in them is accurate and better

so uh those are a couple examples

we're of course embedding AI functionality in the different products that we're building with Microsoft which is going to uh bring a whole new capability to uh what has historically been uh you know I'll say a fairly clunky space in terms of user interface um whether that's desktop products or others uh in the financial sector

so what kind of functionality will you have

now I'll give you a specific example uh

we are rolling out a product called meeting prep uh doing this with Microsoft

what will that be

on your screen you'll have a little button uh you click on the meeting prep button you it opens up a box you input the name of the person you're meeting with uh and maybe the company she's from and then you ask for the meeting prep memo

within 15 seconds or so it will pull up and craft a memo however long you want it to be based on public data financial data research data corporate data from us and then using uh some of the AI functionality pulling all the data that uh you make accessible to it from your email your files your CRM system

oh and I think we all know in in these various Industries when you have a meeting with someone you you may have someone on your team preparing that kind of memo over the course of a few hours uh

and this will be ready in 15 seconds or so

and if it if it doesn't have everything you want or if you wanted to refocus on a certain new area you can just ask it to

pretty handy for my podcast preparation

it would uh it would the use cases are uh kind of amazing when you think about it

David uh we touched on um corpa culture

what have you done with the Cora culture at the eleg

culture has been a big part of the change that we have been going through

so when I arrived at eleg uh it was in in many ways it was a collection of great assets uh

it was not really operating as an integrated company uh and so

really from day one uh or actually I'll say uh three months in because I spent my first three months just talking to people and and learning my way around and understanding a lot of the issues I was very focused after that those first few months I was very focused on creating a common culture for the organization

how would you do that

well you have to Define it uh in terms of what your aspiration is what your intent is

so at eleg I mentioned it was a collection assets we were uh we had some great businesses uh but they were operating in a siloed way or a segmented way

so we had to make it clear that we wanted people to operate in a more connected way uh and a more integrated way

we had an environment where in certain parts of the business people were very comfortable operating the way they had always been operating um and it had been fine uh

so we were very focused on creating an environment where people were willing to change that and we're willing to disrupt themselves

and then we also had parts of the business that were operating spectacularly well and then we had other parts of the business that uh were really more comfortable with mediocrity uh to be blunt about it

and so we talked about the fact that we wanted to raise the bar across the organization uh

this was all before we went through a significant acquisition uh of a business called reative um

and that added a significant level of uh challenge in terms of creating a common culture

but but I mean how do you go about it

I mean you can't just say hi guys uh now we're going to work harder and really lift the bar and we're all going to make a lot more money

what specifically do you do

you have to model it at the senior Le leadership level you have to talk about it all the time you have to embed it in all the different processes that you have

and that means you have to evaluate people on whether they are living up to your cultural aspirations so

uh one of the processes that we went through this past year uh was an exercise of really engaging the whole organization in talking about what are our values at ELC uh

and um we had a massive survey and we uh had focus groups Etc and our people came up with the values of the organization

and that's an important underpinning it's real Foundation of our culture and making sure that our people are living in line with those values

if you think about what what is culture it is the uh it's the rules of behavior for an organization often Unwritten rules

David you spent a lot of time in Goldman saxs MH

is the culture at eleg different from Goldman Sachs or are you aspiring to bring the Goldman Sachs culture into eleg

very different cultures uh

there are parts of the Goldman Sachs culture uh that I think uh I have been trying to bring a little bit more into such such as

well so

in my I think it was I had only been at eleg a couple months and I was visiting the Paris office of eleg and uh someone raised a question what did you learn in Goldman Sachs that is helpful for us here at lch SAA

and I said that's really interesting in my 20 years at Goldman Sachs no one ever asked me about their specific legal entity or operating unit

that has been an important part about creating a more connected eleg uh in terms of making people whether they're in Paris or Tokyo or Cape Town and we operate all over the world

so how do you how do you build down those silos so a couple things uh

when when I arrived at ELC we didn't have a common uh review process

the reviews were done within each business unit and the head of the business unit would uh make decisions about his or her people and that was that uh

we have now created a common review process across the organization we calibrate across the organization

we've created a group of senior leaders basically our top hundred people we get them together once a month so they all know what's going on across the organization

we have um done a number of different structural things like that uh to make sure that people are thinking across the organization

we have thought about do you embedd it in your compensation uh structure uh we haven't actually had to do that because uh it's actually working in terms of uh people in one part of the business actually helping introduce um someone in the other part of the business to a strong customer relationship

but you have to model it uh and you have to really focus on embedding and it doesn't it it's not quick it's a multi- multi-year process

so what kind of people do you promote to achieve this

you have to promote people who are living that culture and living those values

it's been another interesting change for the organization

we historically have been in an organization of very impressive subject matter experts given the kind of business that we are in and the important of expertise in our business uh

and the amount of subject matter expertise within eleg is extraordinary across a broad range of of aspects of financial markets

and one of the things that we've been very focused on over the last few years is in some cases taking those subject matter experts and making them helping them training them and turning them into leaders of people and leaders of businesses

and in some cases we've also been bringing that talent in from outside uh

so uh a big focus on the development of our talent

how easy is it to make a subject expert into a general leader

not easy no not easy

if but it's a really interesting debate

I mean we of course have it here in the font as well we got some incredible experts and many people like to be led by experts to have the credibility and someone they love to be led by experts

there is a really it's a really two-side the discussion this and frankly there are some people where they add and and there are some roles uh that are right for people who are subject matter experts but may not be great people leaders that's okay

but you have to have the right mix and importantly in the roles that require leadership and require real management of teams and require the development of talent you have to make sure that the people in those roles do have those skills

now to make this all um tick what is your leadership philosophy

to bring in great people or to have great people on my team to get them aligned around the Strategic Direction and then to give them uh a lot of running room

and then I uh I like to periodically drill down into the details of certain areas not as a micromanager but more just because I I like knowing what's going on and I like getting into the specifics of things

but as I said I'll do that not in a micromanaging way but understand what's going on and then uh pop back out

oh are you sure you're not Market managing

I think uh I I think so yeah

I haven't that that has not been an issue that uh has come up in in my reviews

now the CEO of um Goldman's um said that we had him on the podcast that leadership is to take people where they don't want to go

now where are you taking people at eleg where they don't want to go

I I think a part of leadership uh can be taking people in a New Direction uh

I'm not sure it's necessarily where they don't want to go it may be where they didn't know they did want to go yeah um

and so I'll give you an example

when we acquired the refini of business so uh this was an acquisition that we closed on uh at the at basically end of January 2021

and at that point uh refinitiv had about 25,000 people eleg had about 5,000 people uh

so it was a massive acquisition for us

the refini of business was growing at one or 2% a year on the back of a 2% annual price rise

and Ela had prior to that had had a strong track record of high growth

so there was an enormous question in the marketplace and frankly within eleg how do we take this massive business and get it to change and and grow

and so there's there's a lot that we went through uh to do that

we now have that business growing you know at attractive rates uh as of the last quarter was about 7% growth

so massive change over the last few years that's something that we had to change a lot of how people operated and a lot of how that organization worked

and there was some resistance institutional bureaucratic uh but we now have people incredibly excited about the direction that we're going in

so I think it's uh leadership is more about communicating where you're trying to get people and then showing them how you're going to get there than uh taking people where they don't want to go

when you uh make a big decision how important is gut feeli or pattern recognition relative to analysis and numbers I

think gut feeli is important in the context of having a really good understanding of the situation uh

and so you're never going to have perfect information uh

and I think in most of these situations where we're dealing with complex decisions or complex systems uh you often have to make a judgment call

I'm very comfortable making a judgment call uh you know or or using gut feel if you will in a situation where I've I feel like I understand the broader situation and understand the underlying drivers uh

I think the notion of making a gut feel in a situation that you otherwise don't know much about or don't know enough about can Verge on into the realm of of Reckless uh

but I think you absolutely have to make some judgments with imperfect information uh and that's effectively what uh whatever you want to call it judgment um got feel you have to exercise that and you have to be willing to do that and you have to be willing frankly to make mistakes

I think if you if you go into a decision process knowing that you're going to make some mistakes you want to make more good decisions than bad decision decisions but you got to keep moving forward that's okay

how would you deal with mistakes

try to acknowledge them openly and address uh what the issues were sort of Lessons Learned you know

we we have a we have a great process internally within eleg um where you know if there's a problem if there's an outage if there's an issue you know we do incident reviews uh

we try to do Lessons Learned we try to track all we track the serious incidents but we also track the less serious incidents because they're the ones where you can learn a lot from and make sure that you address issues before they become serious incidents

so and we have this is another aspect that we are really building into and embedding in our culture because eleg pre reative a a strong risk management culture

refinitiv came out of Thompson reuter which was a media company uh and Views itself as effectively a media company there was very little concept of risk management in the way that the financial sector thinks about risk management

David I'd love to um end with some personal questions

how do you deal with setbacks personally

I think you just have to recognize it's it's all part of the game if you will not that life is a game but like setbacks happen

and what's been your main setbacks in life

I would say uh know things things go wrong all the time uh

from a career perspective um you know it's funny you asked earlier about Goldman Sachs um

I think I must have applied to Goldman Sachs three times before I got a job there over the course of several years um uh

so that that's just an example of yeah setback okay you didn't get it

Jack ma in um applied to Harvard 10 times he never got in

you did you you did you did actually get into Harvard

I I did for law school yes um

I think but it's it's just the point of like setbacks are part of life you have to sort of assume there will be setbacks and you keep going

and uh can you get discouraged in certain things

or if if there's something that you're going for that's just not realistic and you you sort of change direction that's okay um

but I think you have to expect and then it's sort of a question what's what's your personal resilience and do you want to just keep trying do you want to keep going uh or do you change course

how important is your personal Network

I think huh interesting um

you know when I got to the UK I I was not a part of the network here at all oh

you know I have be I've gotten to know more people and gotten more embedded in the community and whether that's from a government perspective the corporate world the the media world and have uh built more and more of that Network

I think networks are important uh and helpful and I think it is it can be an important part of how someone can develop or rise up through organizations

and I think a lot in this world for good or for bad is based on personal relationships and so it is important to build those relationships

and what's what's the key to to doing that to building relationships yeah

I think look everyone's going to have their own style um

my style is to be straightforward try to be clear

I believe in decency if I can put it that way uh I think it's important to treat people well uh

humility is really important to me I don't have a lot of patience or interest in in dealing with big egos

those are some of the areas that uh with in terms of how I approach uh relationships

I do think it's more important to be respected than liked

how do you avoid becoming a big eagle

I think you just keep your feet on the ground uh

it's really helpful to have kids and a partner perhaps yes uh

you know they don't care how important your job is or how people treat you at work uh

and they're uh they've got their own issues and their own needs so uh

I think it's it's just a value set in terms of uh it's a really interesting question um

I think modesty and humility is is uh it's just an important way dealing with people

I don't think there's a justification is kind of how I would answer there's no rationale or justification for someone to have a big ego that seems almost like it's a it's compensation for insecurity is kind of how I think about it yeah

how do you relax

like spending time with my family I like getting exercise and I love reading

what do you read

all kinds of things

I love reading histories I like books about how how people think

almost finished with a a relatively new book about the uh the Japan war crimes tribunal called Judgment at Tokyo um

really interesting

but I love reading I also like just reading current events uh reading articles in in different Publications

so favorite publication

oh I'm not sure I would name a favorite uh and I read a few different newspapers few different magazines

I don't know if you do endorsements here on on your podcast so

and David last last question what is your what is your advice to young people

don't set your own limits

I think in so many situations people don't even go for something because they're scared they won't get it

and that is such an unnecessary limitation on what people might go for

so I think that's really important

the environment will make sure there were enough limitations

exactly exactly the environment takes care of that so you shouldn't add it add to it yourself

very good David

there seems to be very few limitations for eleg we wish you um all the best and it's been really fantastic to have you on

big thanks thank you Nikolai pleasure to be here

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