There is a clear global trend toward more active engagement by tax administrators to understand the tax risk management policies of their constituent taxpayers. In this Directorship article, KPMG tax leaders explore the trend by tax authorities around the world to understand corporate tax risk management policies, which is heightening expectations for board oversight.

Tax authorities realize that they need to become better at predicting taxpayer behavior and the consequent impact on tax revenue streams. They need to become better at allocating their limited resources to best effect. They also need to attract and retain a workforce with the diverse skills and abilities necessary to deal with the many different challenges that the broad spectrum of taxpayers presents.

The article also points out that it is surprising that the issue of board engagement in tax matters has not been a high priority for U.S. business before now. For many companies, taxes are one of the biggest expenses on the income statement, and for that reason alone boards need to engage in active oversight of tax matters.