Management of an entity’s tax strategy has historically been down to finance directors and has received little attention from boards. However, the growing reputational risk attached to strategies that incur a notably low tax bite and the ensuing BEPS project has forced boards to focus on their taxes as much as they do other areas of corporate governance.
Corporate governance broadly refers to mechanisms, processes and relations by which corporations are controlled and directed. Today, society is defining that boards are explicitly accountable for the behavior of their employees and for the culture of their enterprise. Leading by example includes simple principles as ‘‘don’t lie, don’t steal and don’t cheat’’. Ad hoc decision making in challenging business environments is a dangerous game if the rules of corporate governance are not followed.
Innovating your strategy and business model starts with a common understanding of your current situation. You need to know your starting point before you can move forward. Constantly understanding what is happening in the world around you and the ability of your organization to adjust to your context determines your success.
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