About the speaker

Ms Catherine Brighid Livingstone AO, graduated from Macquarie University in 1977 receiving a Bachelor of Arts in Accounting with first class honours. In 1992 she attended the International Program for Executive Development in Switzerland and was awarded the title of Eisenhower Exchange Foundation Fellow for Australia in 1999.

After qualifying as a chartered accountant and working with Price Waterhouse in Sydney and London, Catherine joined the Nucleus Group and spent 20 years working in the field of implantable medical devices, including six years as CEO and Managing Director of Cochlear Limited. Catherine was Chairman of CSIRO from 2001 to 2006 and Chairman of the Australian Business Foundation from 2002 to 2005. She has served on the boards of Macquarie Group Limited, Goodman Fielder Limited and Rural Press Limited.

Currently, Catherine is Chairman of Telstra Corporation Limited and a Director of WorleyParsons Limited, the George Institute for Global Health and Saluda Medical Pty Ltd. She is also a Member of the Advisory Board for the John Grill Centre for Project Leadership at the University of Sydney and the President of the Australian Museum Trust.

Catherine is a member of the Prime Minister’s Business Advisory Council and has worked on many government reviews over the past 10 years, including as a Member of the Advisory Panel for the Australia in the Asian Century White Paper and a Member of the National Innovation Systems Review Panel.

Throughout her career, Catherine has championed the importance of innovation in enterprise growth, particularly design led innovation, the role of corporate governance and the advancement of women in business, and she has held the position of President of Chief Executive Women from 2007 to 2008.

In 2002, Catherine was elected a Fellow of the Australian Academy of Technological Sciences and Engineering, and was awarded the Centenary Medal in 2003 for service to Australian Society in Business Leadership. In 2008 she received an Officer of the Order of Australia for service to the development of Australian science, technology and innovation policies, to the business sector through leadership and management roles and as a contributor to professional organisations. Catherine holds an Honorary Doctorate in Business from Macquarie University and an Honorary Doctorate in Science from Murdoch University.

Catherine is currently the patron of the Australian Design Innovation Network, an initiative led by CSIRO, the UTS Business School and the Design Innovation Research Centre. She has supported the launch of UTS research initiatives and has promoted UTS through active involvement in industry bodies, think tanks and forums. These include launches of the UTS Centre for Corporate Governance in 2003, and UTS authored reports such as the 2005 Australian Standards Publication Knowledge Management Guide.

Catherine has a strong interest in the emphasis UTS places on a practical and interdisciplinary approach to learning, and has encouraged a relationship between UTS and Telstra in this context. This connection was illustrated in her recent Clunies Ross Awards address for the Academy of Technological Sciences and Engineering, “Design thinking drives innovation” and her support of the recently launched CSIRO-UTS report Design for Manufacturing Competitiveness.

It is a great honour for the University of Technology, Sydney to award Ms Catherine Livingstone an Honorary Degree of Doctor of Business (honoris causa) in recognition of her commitment to leadership in design integration, science and technology innovation, corporate governance and her continued support of the advancement of women in business.

Speech

I Introduction

  • Chancellor,
  • Vice Chancellor,
  • Members of the Council,
  • Staff,
  • Distinguished Guests
  • Graduates,
  • Families and Friends.

It is a great honour to be here today, and to be receiving an Honorary Doctorate from the University which, I believe, has understood best the importance of engagement between business and the university sector. When I was CEO of Cochlear, we had many of the UTS engineering students, for example, come to gain experience for 3-6 months as part of their degree, and both company and student benefitted from the interaction.

II Experience at University

I actually started my undergraduate degree in 1973 – and yes, that was last century, in every sense!

Computers were huge machines which occupied whole rooms …

There were no such things as PCs, laptops, let alone smart Phones.

The public internet hadn’t even been invented.

In terms of my own studies – I was frighteningly naive.

I was focussed not on a career, but on getting a job which would enable me to travel.

I chose Accounting.

As for the subjects I took, in retrospect, and with apologies to Tolkien and Bilbo Baggins,

‘I didn’t know half of them as well as I should like, and I knew less than half, half as well as they deserved’.

But I did leave University very clear about one thing – that a, if not the, key skill is being able to frame the right question.

So this morning I would like to spend a few moments talking about Questions, Answers and Judgement.

III Questions

First, to questions.

I have to admit to having had an easy time at university, compared with those graduating here today.

Why was university easier?

There were fewer answers demanding to be known.

And to the extent that there were answers, they were at stable coordinates …

.. ie. they had a library catalogue reference number.

The challenge then – …

.. and the danger now, with the apparent sophistication of a ubiquitous internet and a world which is always ‘on’, with myriad answers looking for questions –

.. was that we might commit to an answer before fully considering the question.

In my university years we all laughed at the answer to the ultimate question …

.. which every fan of The Hitchhiker’s Guide to the Galaxy of course knows is 42.

Unfortunately, we didn’t recognise that Douglas Adams was prescient, and that the joke would be on us.

My Professor of Accounting during my Honours Year was a harsh task master in this regard.

He would mercilessly demolish our case study critiques and demand that we come armed with the questions which would lead to the 2nd right answer.

Only then would he accept that we had really thought through all the possible questions.

If only the same thinking had been applied in the lead up to the Global Financial Crisis, for example.

Considering the GFC from a Question and Answer scenario: the answer was derivatives, because the question was assumed to be spreading the risk.

Alarmingly, derivatives was also the answer because, in many cases, the question was simply ‘what is everyone else doing?’

While derivatives certainly helped spread the risk, it appears no one asked the question as to how derivatives actually helped manage the risk.

The difference between managing and spreading was critical.

Had the focus been on the managing rather than the spreading, perhaps there would have been the recognition of the critical, implied assumption with regard to liquidity.

And it is painfully clear that the liquidity question was not asked.

This is why Diversity is so important – and not just of gender, but also of professional discipline, career experience, nationality, geography and age.

The greater the diversity of thinking, the greater the chance that the right questions will be asked.

IV Answers

But having identified the right questions, the next challenge is to find the right answers.

I would like to use the issue of Business Regulation to explore this point.

Some of you here will already have encountered such Regulation; …

.. regrettably, all will, at some point, have to deal with potentially counterproductive Regulation; …

.. hopefully, many of you will have the opportunity to influence the shape of future Regulation so that it becomes a positive incentive rather than a negative sanction.

The problem is that, almost inevitably, Regulation answers yesterday’s question: …

... secure in the certainty that comes with hindsight, Regulators tend to apply a forensic disaggregation of the question in search of the perfect answer.

The outcome, all too often, is a Regulatory answer which is, at best, a micro management of the problem, and, at worst, suffers from the reductionism trap, and doesn’t answer the problem at all.

The Sarbanes Oxley Legislation, and the Basel II Capital Adequacy framework for Banks are both excruciatingly detailed – yet we still managed to have the Global Financial Crisis.

I recall, in my final year, our Accounting professor opening a lecture by holding up a copy of the first two of these new things called Accounting Standards.

They seemed harmless enough at the time, and led to a suitably academic discussion of the concept of profit and owners equity.

There was plenty of room for interpretation.

Little did we realise what a monster had been unleashed.

Annual reports are now hundreds of pages long; …

.. the Remuneration Report requires disclosures on the disclosures; …

.. and companies have to resort to using analyst presentations to explain the results because the Annual Report is so hard to understand.

In short, in their quest for the perfect answer, Accounting Standards Regulators have lost sight of the original question.

There is a risk that regulation compromises the very governance it is trying to achieve.

Good Regulation is an essential ingredient of a well functioning economy.

It provides certainty and complements the broader legal framework.

At its best, Regulation can provide incentives for desired outcomes and for the building of capability.

At its worst, it stifles innovation and erodes national competitiveness.

And Regulation is at its worst when it seeks to provide the perfect answer.

The reality is that the perfect answer is rarely the right answer.

V Judgement

The essential ingredient which is missing here is judgement.

It’s judgement which brings balance to the process of finding the answer.

It helps weigh up intended and unintended consequences in a thoughtful way.

Judgement is informed by technical knowledge and by experience, particularly the experience gained through making mistakes.

We all make mistakes – hopefully in situations where there is enough damage control protection – but it’s through this experience that we develop the reserves of judgement on which we can later draw.

The benefit of mistakes is that they provide the best learning. So I would encourage you all to seek challenges, be prepared to make some mistakes, but if you are working with talented people whom you respect, they will help you learn from those mistakes. The irony is that we rarely learn from our successes.

The other foundation to judgement is the ethical framework.

In this context we should not be proud that the latest World Economic Forum Report on Global Competitiveness placed Australia 15th in its ranking of the ethical behaviour of firms.

As the well-known ethicist Attracta Lagan has observed, most ethical breaches are unintended, and she notes,

‘Business managers could make a different choice but they don’t have time to think about it. They rarely canvass several options.’

My challenge therefore to all of the graduates here this morning is this:

Ensure that you make enough space and time to acquire and deepen judgement skills.

Turn off the laptop, the smart phone or the iPad – and just think.

Think about the questions, …

.. think about the answers, …

.. and think about the judgements you need to make.

VI Conclusion

In closing, and on a less salutary note, I would like to congratulate all the graduates – and their families – on their very significant achievement. I wish you well in your future endeavours and, having heard the accolades as the degrees were conferred, I am confident that the future is in very capable – and thoughtful – hands!