Karl Diacono has been at the helm of the Fenlex Group – which incorporates a regulated corporate and trust services firm together with Talent Base, a new recruitment agency, and Fenlex Compliance Advisory, offering consultancy services – for the past 15 years, nurturing its growth to a 75-person strong organisation, and fostering its reputation as a leader in the field. Looking ahead, this is a drive he intends on retaining as 2023 continues to unfold.
“I’ve reached a stage in my career where my role has become that of a mentor,” Karl Diacono, CEO of corporate services firm Fenlex explains, pointing to the “excellent managers” working at the company who are “the future of the organisation.” It is due to their commitment to the enterprise that Karl feels he can “start letting go of the reins” and entrust his team with more responsibilities, so that he’s “there to guide them more than anything else.”
This is high praise, indeed, from a professional who has spent the past 40 years honing his capabilities. Karl started his career in hospitality and travel, over four decades ago, moving into technology a few years later and cultivating a reputation as someone who gets things done well. This came to the attention of Fenech & Fenech Advocates, one of the island’s most renowned legal firms, who wanted to tap into Karl’s expertise to help them run the firm’s administration.
“I received a call from one of the law firm’s partners, who offered me the job,” he says. “It started, however, as a very different role – essentially managing projects and the office administration which also incorporated a small corporate services provider. I slowly got more involved within the CSP as time went on, introducing new service lines and technologies,” he recalls.
“Fenech & Fenech were and still are a forward looking firm, that in the 1980s decided to set up a specialised, separate entity to oversee the non-legal services provided to clients. It was a wise decision, since Fenlex was one of the early birds, and, over time, by working diligently, we’ve grown to become a leader in the field. Since then, we’ve bolstered our staff complement from three to 75 people,” Karl asserts, adding that, as a result, “we have grown to be one of the largest independent corporate service providers in Malta.”
His efforts paid off and, 15 years ago, he was asked to run the group. This was a few years after Malta joined the EU and the eurozone, with both developments seeing increased growth in the sector.
Over this period, Karl has seen his team flourish, not only in terms of numbers, but also when it comes to their skills and capabilities. “Today we have asked members of staff to sit with us on the board of directors. We are a learning organisation and invest heavily in giving the team the tools they need to grow as professionals. I’m very proud of the people we have as well as the many people who started their career with us and have also grown their careers elsewhere,” he continues.
Karl’s commitment to his team’s development is no surprise: the CEO views his business as one which is centred on building and maintaining human relationships. “We are a people organisation. We don’t manufacture anything; we provide services through our people. What I enjoy the most is working with the team and helping them to keep the organisation evolving. We invest a lot of time and effort in our human resources and we, then, enjoy the fruit of that investment as an organisation,” he explains, adding that “we also want to make sure that the team benefits from professional and career growth possibilities.”
There’s nothing like a typical day for Karl. “We handle so many different types of clients, and that’s what keeps the job interesting. We are dealing with different situations, requests, individuals, cultures and sectors every single day. We’re in the relationship business – we create and cultivate them,” he attests. And, today, the firm offers an expansive range of services, with 98 per cent of its business dedicated to foreign clients. “We’re essentially a net exporter – we sell a lot of services to overseas clientele,” he states, explaining that the firm’s success is in no small part due to its culture, wherein the personal prevails. “We really see our business as that of building connections, and we have clients who have been with us since the early days; this is because we seek to give each client personalised assistance.”
This does involve some challenges. “I think the biggest issue we face, nowadays, is human capital,” he says, going on to explain that “finding the right people isn’t easy. There is talent – just not enough of it, unfortunately.” Moreover, ensuring the talent stays with the firm, “growing with you”, is also key. “You need to create an environment which is conducive to the development of staff; we spend a lot of time, money and effort doing this,” he explains. This has been a priority for Fenlex for many years, Karl says, and it will continue to be so throughout 2023 and beyond, particularly as more and more people opt to move out of the island. “Before we can ensure our youth remain in Malta, we need to fix the issues which make them look elsewhere. We need to stop this haemorrhage of talent,” he insists.
However, in the meantime, and in order to mitigate these difficulties, “finding new tools to remain efficient and effective,” is imperative, Karl says. “We need to become more process-driven. Using technology allows us to stay lean and, yet, still fulfil what we need to do in terms of our service promise,” he explains.
Innovation has always been at the heart of Fenlex’s operations – “a few years ago, we sat down with a software house to develop a compliance tool, which, today, is also used by a larger number of institutions in our sector. We always want to be at the forefront of our industry. We cannot work without such systems, particularly since we need to be fully compliant with evolving regulation, and this takes a lot of effort,” he explains. “We have a very low risk tolerance and work in a highly regulated environment, so we invest a lot of time and money in ensuring we work within the regulatory framework that is imposed upon us.”
To this end, Fenlex is also in the process of acquiring a new Customer Relationship Management (CRM) platform and adding functionalities to its Enterprise Resource Planning (ERP) software. “This will allow us to manage client requests more efficiently, and to introduce automation for the processing of documentation, since we’re still very much a paper-driven industry.”
For the rest of the year, Karl is looking to maintain the growth Fenlex has seen over the past years. “We’ve never had a year without growth, so we’d like to retain this. The challenge, now, will be to continue building our revenue at the same rate and preserving profitability in spite of the huge inflationary pressures ahead,” the CEO states. “We shall also be working hard to make sure our new services lines, namely recruitment and compliance advisory, grow.
Ultimately, he says, Fenlex is geared towards the continued provision of personalised service to its customers. “Our work mostly comes from client and international intermediary referrals, so our task is to make sure we, and Malta, always remain relevant and competitive. We need to manage capacity with human resources along with the technological capabilities we have,” he asserts. For, he insists, concluding, “there are always good opportunities out there – you just need to make sure you can deliver the service promise.”
This article is part of the serialisation of 50 interviews featured in MaltaCEOs 2023 – the sister brand to MaltaCEOs.mt and an annual high-end publication bringing together some of the country’s most influential business leaders
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