“My father was a great believer in careful due diligence and he helped me find out a bit more about economics. It reinforced my thinking that it sounded worth having a crack at. So, I enrolled in economics at the university and – within a couple of months – it felt like someone had turned the lights on.”
Challen believes that what he learned has had a far-reaching influence on his thinking throughout his career. “They say that economics changes your life – rewires your brain. I think that’s right. Economists do tend to think a bit differently from the rest of society. I was introduced to a series of concepts that really resonated with me – it’s been a part of my life ever since.”
After graduating from the university with first-class Honours and a Master of Economics, Challen was 15 years an academic economist. In 1980, he was instrumental in obtaining government funding for the Centre for Regional Economic Analysis (CREA) where he was Founding Director. He also served as Chair of CREA’s board for a decade from 1993.
After a two-year stint at the Office of the Economic Planning Advisory Council in Canberra, Challen returned to Tasmania in 1986 as Deputy Under-Treasurer at the Tasmanian Treasury. He was Managing Director of the Tasmanian Development Authority for two years and then appointed Secretary of the Department of Treasury and Finance in 1993. He served as Secretary for 17 years, working with six Premiers and six Treasurers of Liberal and Labor governments.
While he was in the public sector, particularly throughout his stint as head of the Treasury, he was asked to serve on several boards, both private and government. Challen says, “That really whetted my appetite for a career as a non-executive director…and what I’ve been able to do has been very rewarding. Initially, there were opportunities that were thrust on me, but it opened my eyes to the fascinating spectrum of activities that you can get involved in through a non-executive director role.”
He is currently Chair of the Motor Accidents Insurance Board and is Deputy Chair of the board of the Tasmanian Symphony Orchestra. In 2013 he was made a Member of the Order of Australia.
Looking to the future of Australian corporate governance, Challen notes that driving an appropriate and positive organisational culture will be a particular challenge. “Cultures are exceedingly difficult to change,” he says. “We tend to forget that human beings respond to the incentives presented to them. If you see behavior that you don’t like in groups of people or in companies, the best way to cure it is to change the incentives for people. Regulation is a very blunt instrument.”
Organisational culture has been brought into the spotlight by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. In his Interim Report, Commissioner Kenneth Hayne AC QC posed that further regulation would add “an extra layer of complexity” to an already complex regulatory regime. Challen agrees. “Individuals respond to incentives and the cultures of companies are the amalgam of the behaviours of the individuals working in them. Thus, in a fairly direct way, a company’s culture is the result of the incentives provided to its employees.”
While Challen’s career path has veered to take him through such a variety of professional experiences, his changing roles allowed him the opportunity to contribute throughout the development of one of Tasmania’s largest infrastructure projects: the Basslink electricity connection. He was involved in the project’s conception as chair of the public service steering committee, and then sat on the Basslink Development Board, which found the private developer, National Grid PLC, to design, construct and operate the project. Later, as a member of the board of Hydro Tasmania, he had a hand in the negotiation of the contractual arrangements between Hydro Tasmania and National Grid, which were essential for the project to proceed.
As Hydro Tasmania’s Battery of the Nation initiative investigates future expansion of Tasmania’s clean energy capacity, this piece of infrastructure could further embed Tasmania’s place in supporting energy supply to mainland Australia.
“It was fantastic to be involved in developing a crucial piece of infrastructure, right from the beginning through to the party that celebrated the first electricity flowing across…it’s very satisfying to be not just involved, but to have been involved in every stage of its development.”