Saturday, May 9, 2009

The new chairperson of Telstra

The profile below is laudatory but other comments suggest that she is more of a bureaucrat than a business person

HAVING accepted the job of chairman at one of Australia's largest and most important companies, Catherine Livingstone is facing the biggest challenge of her career.

The former accountant has been widely lauded for her role in transforming the bionic ear-maker Cochlear into an internationally renowned business. And she is no stranger to public company boardrooms or to dealing with government, having chaired the Commonwealth Scientific and Industrial Research Organisation for five years.

But Telstra -- with more than 1.4 million individual shareholders, including the federal Government's Future Fund, and facing a critical time in its history -- is an entirely different beast.

Not that that should faze the self-confessed risk-taker, who lives on Sydney's lower-north shore with her husband, Saatchi & Saatchi finance chief Michael Sattherthwaite, and their three teenage children.

Those who have worked alongside Livingstone point out that she has taken seemingly large career jumps before, with repeated success. Her resume -- Telstra, Macquarie Group, Worley Parsons, and formerly Rural Press and Goodman Fielder -- speaks of an experienced and coveted commodity.

The Macquarie University honours graduate started her career at the accounting firm Pricewaterhouse in the late 1970s, working in Sydney and London, before making the switch to the publicly listed medical device group Nucleus, where she worked in various accounting roles.

Livingstone was soon promoted to chief finance officer and in 1994, following a takeover of the group by Pacific Dunlop, she was appointed chief executive of its subsidiary company, Cochlear.

One of her main tasks was to groom the emerging device maker for a public float.

One executive who worked closely with Livingstone throughout that period remembers her ability to communicate effectively with investors and the broader financial markets.

"She was able to build a phenomenal relationship with the financial community for the listing and then afterwards," said the executive, who declined to be identified.

"She's a very, very organised and systematic person -- very process driven, very detail-minded.

"She was also able to improve the internal processes within the company."

When Cochlear was floated for $125 million in 1995, it was bringing in $70 million a year in revenue.

When Livingstone left the company five years later, the device was being sold into 50 countries worldwide and sales had swelled to $150 million.

Its market capitalisation was almost $2 billion.

Born in Kenya in 1955, Livingstone had migrated with her family to Australia by the time she started school.

Her leadership skills emerged early, and as an 11-year-old she was appointed house leader for the school sports carnival.

Livingstone has said she was greatly influenced by her parents -- her mother was a teacher and her father served in the air force during World War II, later becoming an economist and investment banker.

In John Eales's book Learning From legends: Business, published last year, Livingstone recalls that her mother repeatedly emphasised to her: "If it's worth doing, do it properly."

"My parents have always influenced me strongly in terms of professionalism."

In a magazine interview published in 2007, Livingstone revealed that her parents had also encouraged her to take risks.

"You have to learn how to step out of your comfort zone. Being afraid is not something to be afraid of," she said.

Livingstone joined Telstra as a non-executive director in November 2000.

When the board ousted former chairman Bob Mansfield and later chief executive Ziggy Switkowski in 2004, she was briefly touted as a possible candidate for chairman but apparently declined to put her hand up for the role.

The job went instead to Donald McGauchie, whose surprise resignation yesterday has suggested that Livingstone's appointment didn't follow the orderly succession process to which boards typically aspire.

Some observers have highlighted her lack of direct telecommunications industry experience (outside of her Telstra board role), and some have questioned whether her fierce attention to detail could work against her in a role in which the big picture is important.

One of her key roles will be to rebuild the telco's fractured relationship with the Government, which hit an all-time low following its exclusion earlier this year from the tender process to build the multi-billion-dollar national broadband network. However, previous comments attributed to Livingstone suggest that she might be willing to take a more conciliatory approach to dealing with politicians than that of McGauchie and the company's outgoing chief executive, Sol Trujillo.

"You have to put yourself in other people's shoes and see how they're looking at something and then try and make the persuasive argument for the outcome you're seeking," she says in Eales's book.

"You can tell people what's happening but telling is not very constructive ... if you can persuade, that's better."

At her first press conference as Telstra chairman yesterday, Livingstone said the company was focused on "a very constructive engagement" with the federal Government.

Businessman Peter Yates, who chairs the board of scientific lobby group the Royal Institution of Australia, of which Livingstone is a director, praised her ability to deal with people.

"She's an extremely thoughtful person who inherently likes people and inherently gives people the opportunity to achieve their full potential," Yates said.

"I can imagine ... (that she) and the new chief executive, David Thodey, who I also know quite well, will make a very good team."

Chris Roberts, Cochlear's current chief executive, who worked alongside Livingstone in the 1980s, described her as highly intelligent, hard working and capable.

"As a shareholder of Telstra and someone who has known her for many years, I think she'll do a very good job.",28124,25450523-643,00.html

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