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Issue 12 June 2006

Welcome to The Tax Intelligence Report!

The June 2006 issue of The Tax Intelligence Report highlights the career track of Joseph Householder, Senior Vice President, Controller and Chief Tax Counsel at Sempra Energy headquartered in San Diego, California. Mr. Householder’s perspective is particularly interesting because he leads the tax function of an organization that is a success story on its own. Sempra Energy understands and appreciates the value of good leadership. There is no doubt in my mind that this is the reason they selected Mr. Householder for this role. Everyone who knows Joseph Householder understands the value he places on high standards of performance and ethical practices. It is an honor to introduce our readers to another leader in the tax profession, Joseph Householder.

All the best,
Kathleen Jennings

Kathleen Jennings
Editor, Tax Intelligence Report
Kathleen@etsearch.com

IN THIS ISSUE

	High Performance Tax Teams
	"A Leader In The Tax Profession" Joseph Householder, Vice President of Tax Sempra Energry - San Diego, CA
	Verbal Intelligence

"A Leader In The Tax Profession"
Joseph Householder, Vice President of Tax
Sempra Energy - San Diego, CA

Joseph Householder is Senior Vice President, Controller and Chief Tax Counsel for Sempra Energy headquartered in San Diego, CA. Joseph Householder oversees financial reporting and controls; and financial planning and tax functions for all Sempra Energy companies. Mr. Householder previously served as Vice President of Corporate Tax and Chief Tax Counsel for Sempra Energy having responsibility to oversee Sempra Energy's worldwide tax affairs.

Prior to joining Sempra Energy in 2001, Mr. Householder was Tax Partner at PricewaterhouseCoopers in the firm's National Tax Office in Washington, D.C. Joseph Householder was Vice President of Corporate Development and Assistant Chief Financial Officer of Unocal until 1999. Joseph Householder joined Unocal in 1986 and was responsible for worldwide tax planning, financial reporting, forecasting and risk-management compliance. Mr. Householder also served as an Associate Attorney at the firm of Halstead, Baker & Olson from 1984 to 1986. Prior to that, Mr. Householder was at the accounting firm Maginnis, Knechtel & McIntyre from 1979 to 1984. Joseph Householder earned his Bachelor's degree in Business Administration from the University of Southern California in 1978, a Juris Doctorate from Loyola Law School in 1984 and is a Certified Public Accountant. Mr. Householder also completed the Executive Program at UCLA Anderson School in 1994. Joseph Householder is a member of the Tax Executives Institute, the American Institute of Certified Public Accountants, the California Bar and the American Bar Association.

KJ - You were given the responsibility to build a world class tax department. You now have one of the most technically talented tax departments in the country. What do you feel is important when building a team?

JH - Our good fortune is to be with a company that is an industry leader with sustained growth and profitability. We also benefit from our senior management’s high regard for the tax function’s contribution to the company. With those foundations, the most important issue for us is attracting and retaining great people. Our goal is to locate tax professionals that not only bring the skills we need but more importantly people who want to work in our collaborative environment helping the company and each other in our collective success.

KJ - What makes your tax department work so well together? In other words, what is the key to your tax department’s success?

JH - Well, Kitty, that is a great question and I have to tell you it takes work. Our tax department has grown from 25 to about 50 in just 5 years and there has been a fair degree of change within that original group as well. As we grew and incurred change, the camaraderie of the smaller group dissipated and while we were working hard and having good results, the people were looking for something more. Working with our Organizational Development group here at Sempra, we engaged the tax department in a series of activities that led to the formation of a number of teams. These teams were formed by and are led by members of different functional groups within the department. We have an innovation team, a communication team and a community building team among others. This has really paid dividends for us and the community building team sponsors events to bring the department together as one. As an example we have an annual tax Olympics in Balboa Park – it is a great day out of the office and gets everyone out of their shell, out of their work group and collaborating with their colleagues from other areas of the department.

KJ - How do you motivate your team to do the best job they can do for your organization?

JH - Aside from the normal rewards and recognition for outstanding performance, we try to ensure they are challenged and keep them informed of the department’s contributions to the company’s success. We work hard at constant communication – we have lessons at lunch every month and allow a person or group to teach the rest of us something about what they are doing. I try to be there often and tell them how the company is doing and keep them connected with the bottom line. One other, you might say corny, piece of motivation lies in our vision – a borrowed but working theme for us – Tax, I’m Loving It! We have it plastered all over the floor and, well, I do love it!

KJ - Sarbanes Oxley has completely changed the business landscape. How has this effected tax professionals and their careers?

JH – I believe the Sarbanes-Oxley legislation has transformed tax departments, improved their processes and is beginning to improve transparency into the tax expense of all major corporations. While it has placed a considerable burden on tax professionals and their companies, I believe it has increased skills for many tax professionals.

KJ - What trends do you see in tax planning versus tax accounting?

JH - I see tax accounting continuing to attract more scrutiny for several years – we have an entire new piece of tax accounting guidance about to be issued this quarter. I hope that new and better systems will be developed and implemented to deal with the volume and complexity of the work. Further, I hope that companies will allow the tax departments to invest the necessary capital to automate these processes and their tax compliance systems in an integrated manner – this should allow the tax professionals to better utilize their skills in tax planning. Until then, it may be that tax planning takes the back seat and more departments may be forced to outsource the work to experts that do not have the ever-increasing demands of tax provisions and tax compliance activities.

KJ - You have recently been promoted to take on more responsibilities. Can you tell me about your new role and it's impact on you and your
organization?

JH - I was recently promoted to Senior Vice President, Controller and Chief Tax Counsel. In my new role I am responsible for the external financial reporting function for Sempra Energy as its Chief Accounting Officer, oversee corporate financial planning and continue to oversee all tax affairs of the company. I see many new opportunities in this role to further integrate tax and accounting within the finance area and continue to add value for our shareholders. I am excited about the new challenges ahead and pleased to be able to continue my involvement with the great tax team we have here at Sempra.

KJ- Joseph, I want to personally thank you for the time you have taken to answer our questions. Your perspective is undoubtedly very valuable.

Kathleen Jennings (KJ)
Editor, The Tax Intelligence Report
Kathleen@etsearch.com

Joseph Householder (JH)
Senior Vice President, Controller and Cheif Tax Counsel - Sempra Energy - San Diego, CA
JHouseholder@Sempra.com

We welcome any comments you may have regarding The Tax Intelligence Report!

VERBAL INTELLIGENCE

Word of the day : Endogenous (en-DOJ-ih-nus)
Adj. Growing from within; originating within

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High Performance Tax Teams

My profession has allowed me to observe the personalities and characteristics of high performance tax teams for more than twenty five years. These high performance teams can be characterized as a group of tax professionals who have strong leadership, they have a sense of connection with each other and they have very high technical expectations for themselves. The increased productivity and innovation by these teams propels them to a higher performance and sets them apart from other tax departments. What are the characteristics of these high performance tax teams and what sets them apart from others? High performance tax departments have strong leadership that empowers these teams through clear vision and expectations. They guide their teams to reach their full potential by communicating their vision and expectations on a consistent basis. There are no obstacles to communicating the organization's goals or expectations, even across multiple countries or time zones. They communicate a clear vision of the department's goals and have expectations of accountability for each participant on the team. They understand that it is easier to lead the team to higher performance when expectations are communicated consistently. Another observable characteristic on these high performance tax teams is “inclusion”. The more each tax professional feels like part of the team, the more motivated each tax professional is to contribute to the team and the organization as a whole. In order to obtain the highest performance from your team you must utilize and include everyone and make them feel like an “insider” on the team. This month start to focus on those individuals who may not feel as included and watch the difference in the productivity for your tax team and your organization. Inclusion of the entire team benefits everyone in your organization. Did you know that one of the primary reasons people leave organizations is because they do not feel included? Make everyone feel included and you will have utilized the best talent retention strategy available to you. High performance tax teams understand the value of making everyone feel connected to each other!

In July 2002, the Sarbanes Oxley Act changed the landscape for all tax professionals. This sixty-six page Act encompasses eleven parts and is full of obscure and sometimes overlapping rules. The Sarbanes Oxley Act is viewed by many in the tax profession as difficult and demanding with stiff penalties and tight deadlines. Today more is demanded of tax professionals than ever before as they struggle with new rules and regulations promulgated by our governments each year. Having worked with tax professionals for more than a quarter century, we understand how highly educated tax professionals are required to be in today’s business environment. All tax professionals we encounter in corporations and national public accounting firms have an undergraduate degree and more than 75% have at least one graduate degree and are a Certified Public Accountant (Chartered Accountant). We acknowledge that tax professionals are high achievers academically and they continue this “high achiever” work ethic in the organizations that employ them. Sarbanes Oxley compliance certainly moves the bar even higher as the demand for technical knowledge increases each year. Multinational corporations understand that in order to be competitive in today’s business environment they must have a high performance tax team.

Kathleen Jennings
Kathleen@etsearch.com