Year-End Review: Progress on Many Fronts ... Due to the Efforts of Many, Many People
David M. Penney, TEI International President
TEI - 5/15/2012

Early in 2011 when Paul O’Connor of the New England Chapter was in the middle of his term as TEI’s president and I had been named to succeed him, I approached him and several past TEI presidents to ask for advice as I developed my goals for presentation to TEI’s Board of Directors. Their collective observations and recommendations not only confirmed the Institute’s good fortune to have had them as its leaders, but they have relevance for me far beyond TEI. First, they said, be prepared for the year to go by incredibly fast. “You’ll look at the calendar one day, and it will be March.” Second, and related to the first, they urged me to resist the temptation to do too much. “Pick a few things,” they recommended, “and concentrate on them. They can — they should — be important things, but focusing on a few big projects would be more effective than ‘trying to do it all.’”

Third, every single person I talked to, without exception, reminded me that I didn’t have to do it alone. “You have a great team of volunteers at all levels of TEI — chapter, region, and at the Institute level. And you have a staff that is second to none in skill and loyalty. Trust them to embrace your goals as their own — indeed, to refine and improve upon them. Be confident that your team will work diligently to move the Institute forward.” Finally, they said, have fun.

It was sound advice. As I reflect on my term as TEI’s 2011-2012 President, I am filled with satisfaction and gratitude — satisfaction for what the Institute has been able to do and gratitude for the support and efforts of everyone who made our progress possible.

First things first: Yes, the year goes by very fast. Second, what the Institute has accomplished this year is due to the efforts of a dedicated cadre of volunteer leaders and a talented staff. Importantly, TEI’s leaders don’t do it for themselves. They plan educational meetings, they work on advocacy projects, they build up the organization, they assist on special projects — they do all of these things — for the Institute and its 7,000 members. They do all that they do for the vision of our founders. I thank them all for their service to the organization.

Vision 20/20 Task Force

The vision of our founders — advancing the role, stature, and professionalism of in-house tax professionals by education, networking, and advocacy — is why TEI is special. And it was to ensure the founding vision that one of the Institute’s major initiatives this year was the development of a new strategic plan for the organization.

The core purpose of TEI’s Vision 20/20 Task Force was to define the “ideal TEI” for today and the year 2020 and to develop a strategic plan that allows the Institute to remain responsive to the needs of the in-house tax community. The last time the Institute undertook a strategic planning initiative was at the turn of the century. It was then that the Institute formally defined itself as “the preeminent association of business tax professionals” and adopted the mission of making TEI “an association of business tax professionals serving its members and their employers through education, networking, and advocacy.”

It wasn’t dissatisfaction with the mission that prompted the Board of Directors to charter the Vision 20/20 task force. Indeed, I don’t think a single member of the Board envisioned a major overhaul of either “why we exist” or “what do we want to do.” Rather, the goal of the task force was to test the emphasis we place on particular goals and objectives and, perhaps more dramatically, to consider adapting the “how” of achieving those goals. The complete plan — which was approved by the Board of Directors on June 14 — is reproduced in this issue of the magazine, and upon reviewing it, I trust you will agree that it charts a clear course forward for the Institute.

I want to thank the fourteen TEI volunteers and three staff members who — with much effort and countless hours (as well as support and direction from our outside consultants from Association Management & Marketing Resources) — produced a thoughtful, comprehensive, and forward-looking strategic plan for TEI. (The members of the task force are listed at the front of the plan.)

An indispensable part of our 20/20 initiative is the research that undergirds it. The plan is founded on evidence gathered from surveys, interviews, and focus groups of members and other significant stakeholders, as well as on the fundamental values that members of the task force articulated.

What flowed from all the research and the task force’s three meetings was confirmation of the goal areas in which TEI should focus. They are not surprisingly very familiar: Education; Advocacy and Government Liaison; Global Operations and Initiatives; Marketing, Communications, and Public Relations; Membership Recruitment, Retention, and Networking; Chapter Development and Relations; and Governance and Management. To further the goals, the task force developed a number of Objectives under each Goal area.

In a very real sense, what the task force did was easy: We listened to our members. The difficult job is the Institute’s next steps: To “operationalize” the plan with Tactical Initiatives and related Tasks and then to determine the priority to be given to each one this year and in the coming months. Thus, the challenge was not identifying “what” TEI needs to do, but rather “how” and “when” to do it.

I am extremely pleased that my successor, Carita Twinem of the Wisconsin Chapter (and co-chair of the Vision 20/20 Task Force)and her leadership team have already set about to do that. As next year’s plan is announced (in the next issue of the magazine), please keep in mind that the strategic plan the Board approved in June is not static. This is a living document. And remember, too, that it is not my strategic plan. Or Carita Twinem’s. Or the Board’s. It is all of TEI’s. It is yours. Thanks to all of you who contributed to its development and, please, help keep TEI the preeminent association of in-house professionals worldwide by staying engaged.

Global Tax Advocacy Task Force

A second major initiative during the year involved taking a look at TEI’s advocacy activities and processes on a global basis. We have long had a goal of “exporting” the success of its advocacy efforts from North America to other areas of world. Taking into account the growing globalization of business (and tax), we chartered a Global Tax Advocacy Task Force.

The task force, which was ably co-chaired by Vince Alicandri of the Toronto Chapter and Janice Lucchesi of the Chicago Chapter, had members from around the world, and collectively they reviewed TEI’s practices relating to multijurisdictional activities and made numerous recommendations consistent with promoting TEI and serving its members.

The task force’s report has been posted on TEI’s website and was formally presented to the Board of Directors in March. Among the topics covered are optimizing member involvement in activities of the Organisation for Economic Co-operation and Development (OECD); responding to developments in the BRIC countries (Brazil, Russia, India, and China), and identifying organizations such as the OECD and the United Nations that have significant effect on tax administration and assessing how TEI can best respond to their initiatives. The task force also proposed that TEI become more involved in responding to treaty developments, especially in respect of transfer pricing matters.

Finally, the Task Force reviewed the development and approval procedures for the TEI technical submissions originating in the EMEA and Asia chapters (and related committees) and evaluated several practical recommendations for improvement. Consideration was given, for example, to creating a Global Tax Committee to coordinate our cross-jurisdictional projects, but ultimately we decided not to do so. Similarly, the task force concluded that there is no current need for the Institute to place staff outside TEI’s offices in Washington in order to serve the advocacy interests of the membership at large.

Ensuring TEI’s Fiscal House Remains in Order

It is no secret that the economic downturn of 2008 tested the Institute. With our members’ travel and training budgets very much constrained, attendance at educational programs shifted from the Institute-level to chapter and regional events. Similarly, like virtually every organization we benchmark with, we experienced declines in our membership, sponsorship, and investment income.

While these developments did not prompt TEI to waver in its commitment to its members, it did prompt a careful examination of both our expenses and our sources of revenues, and over the last couple of years it led to modest adjustments in dues, the amount charged for educational programs, and sponsorship fees. It also led us to evaluate the appropriate level of financial reserves and — earlier this year — to revise the Institute’s investment policy. With respect to this last item, I thank the team — led by Teri Wielenga and Mark Silbiger and including Sandy Macfarlane, Timothy Mc- Cormally, Eli Dicker, and Debbie Giesey — for their thoroughness, commitment, and balance.

I’m pleased to report that the cumulative result of the changes — complemented by our efforts to control costs and expand our sponsorship cadre — has enabled the Institute to return to profitability. Given the uncertain recovery, it is important to remain vigilant, but I am confident that TEI is on a solid footing going forward.

Changing of the Guard

Last but not least, I am pleased to report that Eli Dicker, our Chief Tax Counsel since 2005, will become TEI’s Executive Director in January 2013 when Timothy McCormally retires. This staff transition comes at the end of a formal, long-term succession plan that ensures continuity of operations.

Eli, of course, has been TEI’s lead technical tax adviser since he joined the staff. In that role, he oversees Institute advocacy efforts and initiatives including those related to pending or proposed tax legislation and regulations, treaties, administrative, and judicial decisions. He has also participated in the overall management of the organization, and was, for example, a key member of our Vision 20/20 Task Force. With his energy, drive, and deep knowledge of the Institute and the tax system, TEI is well positioned for the future.

Likewise, the Institute owes Timothy McCormally a large debt of gratitude. He joined TEI as its first Tax Counsel in 1982. He has been at the forefront and worked hard behind the scenes of this organization for the past three decades, and he has been its most important leader — the Executive Director — for the past 11 years. TEI’s reputation for excellence and effectiveness in tax policy and administration is due to Timothy’s dedication, commitment, and skill, as well as his successfully recruiting top-notch professionals like Eli and the other lawyers on our staff —Jeff Rasmussen, Dan De Jong, and Ben Shreck.

Because Eli and Timothy have worked side-and-side for eight years — and because the entire staff is unparalleled in skill and dedication — our members can be assured that the Institute will remain the firstclass advocacy, education, and networking organization it is.

Concluding Remarks

TEI is a very special association for most members, and I have been honored to be its 2011-2012 president. One of the most gratifying aspects of my role this past year has been the opportunity to meet so many rising TEI leaders at both the Institute and local level. The Institute has been able to accomplish all that it has because of the dedication of countless extraordinary people — from Executive Committee members, Board members, and chapter presidents to committee chairs and all active members. Over the years and in particular in the last few years, time has become a very precious commodity. Staff reductions and a tough economy have made travel difficult and even impossible for many members, and it has also made it challenging to participate in our advocacy program and other initiatives. That so many people were able to volunteer so much time is a tribute to them. It is also testimony to the vitality of our founders’ vision.

In my inaugural column as TEI President, I wrote that my joining TEI two decades ago was not an instance of “selfless enterprise.” I also wrote that TEI has been the most single most rewarding — and valuable — professional association I have experienced. As I end my term as president, I think that even more strongly: I have received more from TEI than I could ever repay. I thank you all for the honor of serving as well as for the courtesies extended to me throughout the year. I also wish to take this opportunity to thank my wife, Jan, and my colleagues at General Motors, for their support.

Finally, I want to return to the last piece of advice I received a year ago: Yes, I had fun. Thank you for that, too.