Should Tax Advisers Take a Seat in the Boardroom?

In the corporate world, tax advisers are like the savvy tech whiz in a spy thriller—often out of the spotlight, yet crucial to the plot. You don’t always see them upfront, but boy, do they play a pivotal role in the plot! Should they be part of the boardroom ensemble? Kevin Flynn from EY throws in a resounding 'Yes!'. And here’s why keeping your tax guru closer than your coffee cup might just be the next smart move.

Is Tax Savvy = Business Savvy?

Who knew tax talk could be as strategic as a chess move in the business world? It’s not just about crunching numbers; it’s about steering the ship clear of financial icebergs. According to a recent EY survey, a whopping 49% of businesses recognized that savvy tax planning is crucial for greasing the wheels of cash flow. Yet, tax considerations often get the cold shoulder when the bigwigs huddle up in the boardroom.

Tax is a beast that touches everything from your morning coffee supply chain to the nitty-gritty of employee payrolls. Ignore it, and you might just find yourself missing out on juicy tax credits and incentives that could save the day when the budget gets a bit too wobbly.

When Tax Policy Shakes the Strategy Tree

Ever notice how a change in tax policy can deeply impact the corridors of power faster than gossip in a high school cafeteria? With the U.S. Congress poised to shuffle the tax deck in 2025, companies are perking up. The potential extensions of the Tax Cuts and Jobs Act (TCJA) alone are estimated to toss around a hefty $4.6 trillion price tag. That’s a lot of zeros!

But it's not just about what's happening stateside. Global maneuvers, like adjusting trade policies or revising tariffs, can also affect a company's tax strategy. That’s why having a tax adviser in the room, someone who can decode these changes, is like having a translator when you're trying to order dinner in a foreign country. It’s just plain smart.

The CFO Shuffle

And speaking of crucial roles, let's not forget CFOs—the maestros of money, the captains of capital. With CFO turnover on the rise, whether from poaching, planned retirements, or juicier C-suite carrots being dangled, companies are feeling the pinch. According to the Fortune/Deloitte CEO survey, chief executives are eyeing regulation changes with a mix of caution and opportunity.

Here’s where it gets spicy: M&A activities are on the table, and without a steady hand at the financial helm, deals could go south faster than a snowbird in winter. Companies need to be grooming the next line of financial wizards who can juggle more than just numbers—they need to be strategic, tech-savvy, and operationally astute.

Tax Advisers as Strategic Chiefs

Tax professionals are uniquely positioned to guide strategic business decisions, thanks to their deep dive into the intricacies of tax laws and economic trends. To elevate their roles, they should be present at strategic planning sessions, advocating for tax considerations to be a cornerstone of business strategy. By maintaining a proactive stance—continually educating themselves and staying abreast of legislative developments—tax advisers can forecast changes and their potential impacts effectively.

Being visible and vocal in these discussions ensures that tax strategy is integral to business planning, helping to uncover tax efficiencies and navigate complex implications of business decisions. Building strong relationships with other departments enhances a tax professional's influence and integrates tax considerations across the business, making their role in the boardroom not just helpful but essential.

Keeping it Real: No Succession? Big Question!

Tax strategy integration isn’t a one-and-done deal. As companies evolve and roles shift, the established processes for tax consultation need a fresh look. Is the current tax team equipped to handle the growing complexities of regulatory changes? Maybe it’s time to beef up the squad or consider co-sourcing to stay sharp on the tax front. Regular check-ins and strategic consultations should be inked into every executive’s calendar, ensuring tax strategy isn’t just riding shotgun but helping to navigate. So, what’s your take on this? As a professional group, are we ready to step up and make a strategic move? Stay tuned for more such insights, and don’t forget to subscribe to our weekly newsletter to stay in touch this year!