In conversation with Nick Rodgers

Nick Rodgers is a highly experienced non-executive director and chairman, valued for his strategic advice and common sense approach to business.  With a background in corporate finance as a successful business enabler, he has advised on more than 100 acquisitions and disposals and 40+ IPOs and takeovers. He has considerable experience with businesses in the life science, med tech, technology and environmental sectors.

Nick is the board chair at Destiny Pharma plc, ZPN Energy Ltd, and South East Health Technologies Alliance (SEHTA). With a portfolio of several chairmanships and directorships, I wanted to find out what makes Nick such a valuable asset to businesses.

Sue Rees: Nick, it’s lovely to speak with you again. I’d like to start our conversation by finding out a bit more about your career journey. So, where did it all start?

Nick Rodgers: It’s a pleasure to chat, Sue; thanks for inviting me. My background is in accountancy, but that didn’t come onto my radar until I was in my second year of university and had a required meeting with their career advice service. I was studying at Leeds for a degree in Economics and History.  At the time, I didn’t have a plan of what I was going to do with it, and they suggested accountancy and arranged for me to go and have a chat with one of the Big Six (as it then was) in Leeds.

The irony was that my dad was an accountant, so up until then, that profession was probably the one furthest from my mind as an option! However, I had been persuaded, and by the end of my final year, I had four or five offers to begin my graduate training.

I trained in Leeds with Ernst and Young and then moved to their London office, working in the audit division. Then I got transferred to the corporate finance team – working on the accounting aspect of acquisitions, disposals, IPOs, and so forth. That’s where I first got exposure to this kind of deal, which was very attractive. I then was sent on secondment to the Stock Exchange (who were at that time the review body for corporate documentation of listed businesses), and that really cemented in my mind that I wanted to be more than just a bit player in these deals – I wanted to be more involved. So when I was approached by a number of brokers to join them after my secondment, I decided to make the move because it put me right at the centre of deals in a corporate finance department.

I ended up being jointly responsible for that department, but after nearly 15 years in that environment – partially driven by changes to the market, partly by changes to the firm – I started to explore the potential for developing a portfolio career, and I took the plunge and left my role in 2004 without another job to go to.

SR: That seems like quite a risky move?

NR: It might seem that way from the outside, but I’m an accountant – and one of the things accountants do is calculate risk. I’d calculated that I didn’t need to earn a salary for a couple of years due to previous financial decisions I’d taken and some share options I had earned that I could take advantage of.

And over the next 6 months, I found four or five non-executive directorships.

SR: Were any of those businesses you had become aware of through your role with stockbrokers and investment banks?

NR: I deliberately avoided approaching previous clients. For one thing, I didn’t want to change the relationship I had had with them. For another, I didn’t want anyone to have the perception that I was approaching people cap-in-hand.  The portfolio of NEDs I had started to build was with businesses where I felt I could add value and that interested me.

So, at 45, the calculated risk of pursuing a portfolio career had begun to pay off.

SR: When you embarked on your fledgling portfolio career, what was the motivation behind that? What benefits were you looking for?

NR: Well, I can tell you that what I thought was going to happen didn’t quite work out to plan, but then these things never do. I wasn’t looking to become semi-retired as some people thought; I was more looking to become “semi-employed”! Fundamentally, I wasn’t enjoying the world of investment banking anymore. My idea was to take on 5 or 6 non-exec positions in companies I found exciting and believed in and give them the benefit of my experience for two or three days a month each. So the plan was to enjoy a bit more personal and family time while doing work that interested and stimulated me and where I could make a difference.

SR: Were you drawn to any particular industries or sectors, and if so, why?

NR: The investment bank I had worked for was a generalist, so I’d had exposure to many different businesses, from traditional retailers to high-tech. In the mid-90s, I’d started to see a flow of life sciences opportunities coming through the door. None of my colleagues wanted much to do with them because they assumed they wouldn’t know anything about the product or the science. They’d just pass them to analysts for a general opinion.

My approach was a little different. I read the business plans – because that’s what I had been trained to do – and although there was always something in them I didn’t quite follow, a bit of science or tech or biological “dark arts”, I ended up with lots of these crossing my desk because I was prepared to take a look. Ultimately, I set up the firm’s first biotech and life sciences practice – although more by accident than design. That’s where my interest in life sciences began.

Now what continues to interest me is that if you look at what real added value “the City” brings, it’s not very significant. Those firms facilitate moving money from one hand to another. They are intermediaries. They may generate a lot of wealth and create an important marketplace but they don’t do much of value.

Life science is different in those things that I did – and do – as an adviser could make a direct difference to patients ultimately. Because my involvement could directly lead to getting new drugs to the market that could make a concrete difference in people's lives, for instance, I found that very rewarding.

SR: You’ve got a lot of experience chairing boards now. What do you think makes a good chair? What are the key requirements?

NR: I think it’s critical that you can devote the appropriate amount of your time to the company at any point. That means being very flexible. When I was a corporate financier, I was writing a funding document for a business. I remember asking the chairman whether I should put their title down as executive or non-executive chairman. He told me, “I am just the chairman”. I never quite understood what that meant until I became the chairman of Oxford Biomedica during some tough times between 2010 and 2016. I then realised what being “just the chairman” meant because a good chair will always be on a continuum between exec and non-exec, depending on the business's needs. At times you can be having a weekly chat with the CEO, ensuring the board is functioning as it should and that strategic decisions are being followed through, but otherwise, you are not really getting involved. At the other end of the scale, you might find yourself down in the trenches with the CEO trying to make the business work and sorting out problems in a pretty hands-on way. Not with an “executive” hat on, but pretty close to it.

You can’t have too big an ego. As well as being prepared to get your hands dirty, you’ve got to respect that the CEO is the one running the business, and it’s not about you. The chair can have a quasi-figurehead role, but the primary role should always be that of the CEO. I don’t think chairs should be figureheads unless it’s with the CEO’s request and blessing in specific situations. The CEO should be the one building the key internal and external relationships most of the time.

An essential qualification for a chairman is common sense. I think my accounting and investment banking experience gave me exposure to a lot of businesses and how they operate, and that has been very useful. But a lot of accountants aren’t exposed to that during their careers. I think that most lawyers don’t tend to make good non-executive directors. There are, of course, exceptions, but in general, they don’t know as much about how businesses really tick. So your professional background is far less important than having a lot of common sense and a fair bit of humility.

Another important skill a chairperson can have is to be a good mentor. Some chairs aren't. They don’t necessarily listen, and they aren’t very interested. The CEO’s job can be incredibly lonely and pressured at times. Quite a number of CEOs don’t realise how isolating the role can be, so the chair’s ability and willingness to mentor is vital. They need someone to bounce thoughts, ideas and concerns off. If they aren’t talking to you, then you need to be talking to them. I often say that my primary role as a chair is to keep my CEOs sane.

SR: As someone who regularly speaks to investors involved in the life sciences sector, what is the sentiment in the market at the moment?

NR: “Uncertain” is probably the best word to describe it. A classic example was the impact of the Liz Truss/Kwasi Kwarteng mini-budget. It added vast amounts of uncertainty as to where inflation and interest rates were heading. With certainty, markets can plan and react accordingly. With uncertainty, investors will sit on their hands. Whatever the inflation or interest rate number is isn’t the issue (it’s not like we haven’t been here in the past); it’s the fact that no one knows where it’s heading.

A lot of investors out there are following market trends rather than leading the way, and that means they get overly worried by uncertainty, and that means things aren’t great at the moment. Getting any funds raised or deals done is extremely challenging at the moment.

SR: And given that, what are the challenges you are facing as a chair at the moment?

NR: In our sector, it’s always about funding. You can’t get away from that. It’s always about deals, and it’s always about people. Without the right team, you won’t attract funding. And without funding, you can’t attract the right people. It’s a perennial chicken and egg problem.

It’s particularly difficult at the moment given the uncertainty in the market we’ve mentioned, but that’s when your business and mentoring experiences prove your worth as a chair.

SR: Just finally, one of the things I’ve been very interested in recently is the lack of female representation on boards and in investment houses. Why do you think there are so few female chairs at the moment?

NR: It’s simply because there aren’t enough women with the level and breadth of experience. If you think about the typical profile of a chair, it’s someone in their 50s or 60s. That means they’ve got to have had experience in senior positions for the last 20 years or more. Many women will not have had the chance to get into those top jobs over that time. There were very few female directors then, so there are relatively few female chairs.

I’m sure those people will start to come through naturally, and the balance will become more representative. Now you could try and force it because in the pool of capable people available now, there are more men than women due to the history I mentioned. I’m not sure that’s the right approach. But I think that biotech is going to be a leader in that change because more women in junior and senior management positions are rising to the top here than in almost any other sector. We should quickly start to see the composition of our boards and their leadership more fairly represent society’s gender balance, and I welcome that.