The Conference Board Governance Center Blog

Jan
02
2014

Governance Considerations in Setting Corporate Tax Policies

By Marcel Bucsescu, Assistant Director, Governance Center, The Conference Board

Last month, The Conference Board Governance Center, in collaboration with Cleary, Gottlieb, Steen & Hamilton, hosted its most recent Governance Watch webcast. This edition of Governance Watch focused on Governance Considerations in BEPS. “BEPS”, the acronym for “base erosion and profit shifting”, has come into the news in the last few years through high profile cases, police raids, government hearings, and international policy summits.

There are very real pressures on boards and management to manage corporate tax rates, particularly in high-tax jurisdictions such as the U.S. Yet shifting public sentiment and softening government balance sheets complicate matters for companies as scrutiny increases in this area.

For a detailed discussion of the issue, you can view the complete webcast and background materials here. The discussion was moderated by Yaron Reich of Cleary and included Cleary Partners Nicolas Grabar and Daniel Weyde and Saul Rosen, Senior Tax Counsel and Managing Director at Citigroup, Inc.

But to get to the core of the discussion, here are five key measures from Nicolas Grabar for boards, management, and their advisors to consider:

  • Educate the team. Conduct training for senior tax team on how to address emerging enforcement and audit risks.
  • Educate the gatekeepers. Institute regular briefings on emerging tax risks – Audit Committee, senior legal team, financial reporting team.
  • Personnel. Review staffing of the tax function; consider incentives, reporting lines, cross-border integration.
  • Decision-making. Review process for decisions on tax strategy, sources of tax strategy and advice.
  • Communications.  Consider tax content of public disclosures; plan for emergency.

Given the G-8. G-20, EU and OECD initiatives with respect to tax policy, this is not an issue that will soon be resolved and will, in fact, be extremely dynamic with potentially substantial impact for both companies and governments. The five steps above are a great start to begin building a more robust and responsive tax policy for organizations and should be carefully considered.

About the Blogger:

Marcel Bucsescu, Assistant Director, Governance Center, The Conference Board

Marcel Bucsescu, Assistant Director, Governance Center, The Conference Board

Marcel Bucsescu is assistant director of The Conference Board Governance Center. In this role, he oversees all Center programs and leads several key efforts, including The Conference Board Governance Center Blog, Governance Watch webcast series, and The Conference Board Council of Chief Legal Officers.

 

 

 

 



You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply