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Learning to lead: a challenge to today's tax professionals.

First, let me offer my congratulations to each one of you. It is never easy to balance the demands of work, family, and the classroom, and that is particularly the case with a curriculum as rigorous as this one has been. You are truly to be commended for improving your own knowledge, enhancing the general level of expertise in our profession, and increasing your value to your colleagues, companies and firms.

So, why did you do it? Nothing better to do with your Fridays and Saturdays ... to improve your chances for a promotion or your value in the open market ... or perhaps something deeper? And now that you have completed the program, what are your responsibilities and what type of professional are you going to be? Anyone who completes a program as demanding as this one has learned. The question is: Are you ready to lead?

America's 35th President, John F. Kennedy, understood the linkage between learning and leadership. On that fateful November day in 1963, in comments shortly before he took his place in that doomed motorcade, President Kennedy said that "Leadership and learning are indispensable to each other."

Even if you are too young to remember JFK, you know of him and of his soaring words from the history books. You know that in his inaugural address he spoke of the torch passing to a new generation of leaders and you also know that his grave at Arlington National Cemetery is marked with an eternal flame. Upon your completing this program, the challenge I pose to you is the one he posed to America 45 years ago: Are you willing to take up the torch? Can you, will you be a flame for your organization? Can you, will you be more than just "the tax guy," but rather an integral, respected member of your management team? You wouldn't be here today if you weren't bright, ambitious, and hard working. My principal challenge to you is to be more than that: It is to be more than an expert; it is to take up the torch of leadership.

What does it take to be a tax leader? Do you have to alternately be Clark Kent, mild mannered tax guy, and then TAXMAN or WONDER WOMAN--able to run faster than a speeding IRS agent and to leap LILOs and SILOs in a single bound? No, I don't think it has to be that dramatic. Besides, you likely would look funny with a "T" on your chest and doubtless would have trouble finding a phone booth to make the transformation. To be a leader, I believe you must have certain traits and characteristics, and you have to approach your job in a certain way.

Be in tune, be in touch. To be a leader, you must know the tax environment in which you work and live, and more important, you must be attuned to changes in the business climate and in your corporate or firm culture in which you function every day.

What will this take? For some, it means moving be yond our comfort zones, leaving behind the green eye shades, and removing the blinders. For all of us, it means being in tune and in touch with today's business environment, warts and all. You cannot just work the numbers and read the regulations. You need to read the business page, the front page, and you must know the issues of the day. You need to put the "news" in context, and be able to comment and advise your management armed with a full picture, not just the tax component. In other words, you need to paint with the whole palette of colors, not just the tax hues.

To be a tax leader, you also must resist the temptation to live in the past and to long for "the good ole days"--before Enron, WorldCom, and Sarbanes-Oxley. All the joys and wonders of the brave new world of transparency have transformed the job of the tax professional into part priest, part penitent, and part recordkeeper par excellence. If you cannot accept that, you likely will not succeed.

Secondly, may I suggest that you a take a lesson from this compass. Some of you may not have been Boy Scouts or Girl Scouts and may be too young to remember, but a compass is what we used to find our way--like Russell Crowe in "Master & Commander"--to find our place and chart our course before GPS technology and that friendly voice of OnStar came along to let us know that a left turn is coming up.

To be tax leaders, each of us has to develop an internal moral compass to guide our daily jobs of overseeing and managing a tax function, the whole tax department of your company, or the tax division of your firm. In today's jargon, we need to align our own moral compass with that of our bosses, the CEO, or the head tax partner, as well as the company's culture and, yes, society as a whole.

Aligning our compass with those of our organization is essential to finding our way and charting our course. Let's take the example of a risk assessment of tax. Have you done one for your company or firm? If not, perhaps you can suggest one. Here again, the key is to move beyond reacting to being a leader. Be active. Lead.

As tax professionals, we are prone to focus on technical tax risks. This is not unusual, since this is what we have been trained to do and hence what many of us feel most comfortable doing. To be leaders in our companies, our firms, and in the profession, however, we must do more. We need to evaluate tax risks on several levels. For example:

You must know what you are ultimately trying to do as a business. Our tax strategies have to be aligned with our company's or client's business focus and its underlying business philosophy. Otherwise it is useless, or worse--counterproductive. For example, if your company's business strategy or that of your client is to move toward contract manufacturing, you do not want to suggest building a plant in a low-tax-rate jurisdiction. While such a move might accomplish the narrow tax objective of lower taxes, it would be at odds with the business objective of not wanting to spend capital on bricks and mortar.

You must know what the business effect of tax risk is, and strive to make your thinking as complete as possible in terms of how a strategy taken for tax purposes might effect the entire business. In other words, you must consider whether the company could be paying more down the road to achieve a savings today. Be sure to consider the effect of a proposed tax strategy on business processes and whether it will be too difficult and costly in the long run to administer.

You must know the effect of tax risk on your company's or client's reputation. A marketing person may call this the public persona publicity test. We commonly refer to this concern as the "Wall Street Journal" test. Would the course of action you recommend withstand the scrutiny of The Wall Street Journal or the court of public opinion? For example, would you hire Barry Bonds as a spokesperson these days?

In the tax realm, of course, the answer may not always be that clear cut. For example, your company may be able to reap significant tax savings by moving your headquarters and incorporating in some tax-friendlier country, but how would such a move be perceived? Would negative tax publicity result in a loss of customers, stir your unions to be more assertive, or trigger headline-grabbing congressional hearings? Would it strain relations with tax authorities, undercut your standing in the community, or antagonize the political powers that be?

The name you give your risk tolerance profile--a tax risk assessment or setting your risk guardrails--is not important, but the message, process, methodology you set is. It provides a framework in which you can discuss issues with your CFO, the Audit Committee, your Regional or Divisional Head Tax Partner, or your CEO. It allows you to set the agenda. It allows you to demonstrate that you are a leader.

Another way to meet your responsibilities and to lead is by making the time to--

Be Current, Stay Current. While it is important to be in tune with more than just the tax world, you cannot lose sight of the fact that you are the tax expert for your company or for your firm. It requires balance to operate effectively in today's environment; we need to be aware of the issues, be technically current, and understand the business and the backdrop in which we operate.

You need to remain current on tax developments, whether it's new regulations, rulings, or case law. If your company's scope is global, you must add the local foreign law update to your list. In addition, we must all be more than tax geeks. More and more today, we are expected to be knowledgeable about tax accounting and an alphabet soup of agencies beyond the IRS and DOR, such as the FASB, SEC, and PCAOB. And the list of rules goes beyond sections of the Internal Revenue Code to include FAS 109, FAS 5, 123R, APB 23, and on and on and on.

Beyond being technical experts, moreover, we must be effective managers. How do we organize our departments? Are our staffs competitively compensated? Do we have the right metrics, the right measurements to demonstrate to our CFOs and Managing Tax Partners that we are maximizing our resources efficiently and effectively?

How can you accomplish all these things? You might begin by brushing up on your speed reading techniques. You can attend seminars. You can pore over documents, directives, and data. And you can plug yourself in to colleagues and leverage some of the professional organizations around you.

I recommend the final option: Be involved and be engaged in your profession. Select a group--or groups--that meet your needs and at the very least attend the meetings. It could be TEI, Chicago Tax Club, MAPI, AICPA, IFA, the Corporate Executive Board, or the University of Chicago Annual Tax Symposium, to name a few. We are all resource constrained, so leverage these organizations and make your issues their issues. We tried to encourage this approach with the theme of "Be Effective, Stay Effective" that we adopted during my year as TEI's International President. There are three components to this theme.

First: Be Connected, Stay Connected. It is through our involvement in our selected tax professional organizations that we are able to take the temperature of our fellow tax colleagues regarding how they are approaching a particular challenge. Often they have already encountered the problem, and their experiences and comments will be right on the mark. And I am sure you will find--as I continually do--that the generosity of your tax colleagues is amazing and heartwarming. It's like we are in this together and the strength in numbers will allow us all to succeed. We want to make one another look good.

Second: Be a Voice, Have a Voice. This means participating in advocacy, whether it is through your own company's or firm's government relations function, through TEI, or through special ad hoc working groups. For example, TEI's advocacy efforts are helping to shape the IRS's refinement of its corporate e-filing mandate and TEI's steadfastness has helped forestall enactment of a provision requiring CEOs to either sign the corporate tax return or file a declaration concerning the company's return preparation.

This leads me to my final point: Be Involved, Stay Involved. All too often we use the excuse that we are too busy, already know enough, or cannot spare the time to become involved. My challenge to you is that you cannot afford not to be involved, not to develop your network, not to try to make your voice heard. If you take that first step of attending meetings and getting involved in a committee, you will be on your way to developing that important tax community network, which will benefit you, your company or firm, and your profession. I assure you that finding time to participate will yield great dividends to you and your company.

Again, leaders are connected, have their voices heard, and are involved. So, on Monday morning, think about the steps you need to take to be that Leader.

JUDITH P. ZELISKO is Vice President-Taxes for Brunswick Corporation and a former International President of Tax Executives Institute. On May 7, 2006, Ms. Zelisko delivered the commencement address to the first graduating class of the Illinois MS Tax Program of the University of Illinois at Urbana-Champaign. The text of her remarks follows. The 12-month program is designed for working tax professionals. Its curriculum features rigorous technical tax courses designed to develop the broader business and leadership skills needed for tax professionals to excel in today's dynamic global tax environment. The academic year for the program runs from May to May and classes are held in downtown Chicago. The program's director is Norma J. Lauder, formerly Senior Vice President, Director of Taxes of Bank One and a member of Tax Executives Institute's Chicago Chapter. She can be reached at
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Author:Zelisko, Judith P.
Publication:Tax Executive
Date:May 1, 2006
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