Let’s start with a disclosure: I have been deeply and proudly involved with the Responsible Tax movement since its inception in Spring 2014. My perspective cannot therefore be described as “independent”. Nonetheless, I believe that Responsible Tax is setting an important, new benchmark in how organisations approach policy development and stakeholder communications and, vitally, how they can take an activist, leadership role in the public interest.
Tax is a difficult domain
Tax is not an easy domain. It is fraught with both technical and geographical complexity and red-hot with politics. There is rarely an easy answer and always an alternative point of view. Tax nationalism – mirroring economic nationalism more generally – is on the rise, adding competition and complication to complexity. Tax has more often than not become a proxy for much broader conversations – on globalisation, on inequality and injustice, on disparities between the Global North and the Developing South. As such, tax runs to the core of the debate on ethics in business.
My personal viewpoint – shared by colleagues – is that tax is the entry fee we all pay for a civilised society. It binds the social contract between business, politics, citizens and society. Therefore, while tax remains a legal duty, it has a clear moral dimension.
Moral courage alone is not enough
But morality alone is not enough. Morality needs courage also. In this recent article for Management Today on why 2017 should be a year for activist leaders, I quoted the poet Maya Angelou on courage and Alexis de Toqueville on agitation, change and danger. Business leaders need to find the courage to openly embrace agitation, change and danger in making better decisions in the public interest, for the common good. As the publication noted: these “dangerous and turbulent times call for open, adaptable bosses willing to stick their heads above the parapet”.
Heads above parapets
Conventional wisdom – especially in business – tells us to mitigate risk, avoid vulnerability and silence dissent. Courageous leaders take the opposite path and will be more trusted for doing so. They need to put their heads above the parapets because, as is plain to see, their heads are getting shot at anyway. This means eschewing platitudes, sharing sometimes uncomfortable truths, making difficult decisions and stopping the stream of soundbites. It means being sometimes unpopular but always powerfully honest.
This unconventional mindset sits at the heart of the Responsible Tax programme, where moral choices and courageous leadership combine.
The less courageous alternative is for leaders to entrench or retreat. But this is no alternative at all. The global Financial Crisis of 2008 was a pivot point, after which no-one really listened and no-one really learned. 2016 was a pivot point with no turning back, when the world moved beyond the conventions of business-as-usual, tired Harvard Business School doctrines and exhausted 20th-century democratic institutions. Courageous leaders will therefore embrace what is now a chaotic and uncertain future and make decisions rooted in Common or Public Good. They will be challenged – but they will also inspire – on tax and elsewhere.
As the business world heads up the mountain to Davos later this month for the World Economic Forum, the words of Maya Angelou and Alexis de Tocqueville should echo loudly. Tax will no doubt be high on everyone’s agenda. Plato’s four cardinal virtues can provide the broad framework for moral, trusted leadership: wisdom and tolerance, justice and courage. But, of these, perhaps the greatest is courage.
“Courage”, wrote Samuel Johnson, “is the greatest of all virtues, because if you haven’t courage, you may not have an opportunity to use any of the others.”
Robert Phillips is the co-founder of Jericho Chambers, an advisor to KPMG, and author of Trust Me, PR is Dead (Unbound, 2015)