Tax in Governance

Tax in Governance

As we have said above, external stakeholders are increasingly interested in a business’s corporate income tax behaviours and evidence of the level of tax responsibility it adopts in terms of aggressive tax strategies as well as the level of economic contribution the business makes to society. 

With this in mind, businesses are increasingly adopting and articulating clear tax principles, aligned to their broader ESG agenda.   

There is a large amount of guidance as to what ‘Responsible Tax’ behaviours look like – from the B Team Principles, to Global Reporting Initiative (GRI) 207 to the Principles for Responsible Investment.  Essentially, these can be distilled into three key areas: 

  •  Strategy – a tax policy signed at board-level which establishes the company’s approach to tax and how this is aligned to its broader corporate values, its tax risk appetite/approach to tax planning and its relationship with the taxation authorities. 
  •  Governance – an explanation of the control framework, risk management, tax risk escalation process and responsibilities/accountabilities which support the tax strategy and ensure minimum standards of behaviour apply across the business 
  • Transparency – details of compliance with specific obligations (such as Country by Country reporting) and broader contribution to society – taxes paid (eg corporate taxes) and taxes collected (eg payroll taxes / social security contributions) 

One central option for businesses is to present a publicly available tax contribution report, as part of the wider corporate reporting agenda. Organisations should view this as an opportunity to engage meaningfully with their stakeholders rather than a simply a compliance box ticking exercise and truly integrate tax transparency as part of a responsible tax strategy and good governance framework.

We interviewed David Murray, the Head of Tax Policy & Sustainability at Anglo American and the Chair of the Chartered Institute of Taxation (CIOT)  International Tax Committee in UK to see how his organisation is putting this into practice and challenges that he sees arising.

‘‘Amongst the broader discussion that is going on about the role of business in society, ESG and sustainability, Tax is not the only metric, but it is a very tangible metric that people are asking questions about and want to hear more about. It’s a great place for the conversation to start.’’

David Murray, Head of Tax Policy and Sustainability, United Kingdom   



Designing and implementing good governance structures relating to tax could be viewed as challenging and potentially slow-moving. Organisations should look to get ahead now by addressing barriers and beginning analysis and reporting to stakeholders as early as possible.



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