Sutherland was born in Geelong, Australia, but brought up in South Africa where she attended Roedean School in Johannesburg, then the University of the Witwatersrand, where she studied history under Professor William Macmillan. She graduated with first-class honours in 1924, then was elected as the Herbert Ainsworth research scholar for a year.
She then moved to read modern history at Somerville College, Oxford, where she again achieved first class honours. In 1926 she was the first woman undergraduate to speak at the Oxford Union, winning applause for her opposition to the motion 'That the women's colleges ... should be levelled to the ground'. After she graduated Somerville appointed her a tutor, and later elected her to a tutorial fellowship in Economic History and Politics (1928-45). She was principal of Lady Margaret Hall, Oxford, 1945-71. She was a pro-vice-chancellor of the University 1961-69, the first woman to hold that office.
At a time when the women's societies were advancing towards the full collegiate status finally accorded them in 1960, it was of immense benefit to the Hall to have at its head a woman of Miss Sutherland's statesmanlike vision. Her wisdom and far-sightedness, her clear understanding of financial matters, her business-like handling of committees, her vigorous realism, tempered by discretion, all combined to make her an ideal chairman. ... By virtue of her personality, no less than of her gifts as scholar and administrator, she was outstanding among the academic women of her generation.-- Obituary, The Times
In parallel with her academic work, Sutherland also became involved in government administration. In 1941 she was offered a principalship at the Board of Trade, and by 1945 had the rank of assistant secretary. After the war she chaired a Board of Trade working party on the lace industry (1946), and was on a committee of inquiry into the film industry (1949), a royal commission on taxation of profits and income (1951), a committee on grants for students (1958), and the University Grants Committee (1964-99). She was also involved with educational administration and was chair of the Girls' Public Day School Trust. She left an art collection to LMH on her death.