Earning trust

Though initially conceived of as an institution of trust, tax and trust no longer seem harmonious. They are increasingly driven apart in the court of public opinion by a series of “scandals” which have commanded global media attention.

While the notion of trust is quite subjective, it is hard earned and hard-won. In a fast-moving, increasingly transparent, globalized world, trust is more fragile, and certainly faster to lose.

Tax is a critical trust issue

Tax is one of the most critical trust issues of our times. In an ever-more transparent world, being seen to pay what is considered ‘fair’ will only become more important, and failure to do so will become increasingly detrimental to an organization’s ability to earn and retain public trust.

But despite this fragility and while research such as the annual Edelman trust index informs us that trust in institutions and corporations appears to be in decline, the nature of trust itself has not changed. Key drivers remain honesty, competence and reliability, and trust can be intelligently placed and intelligently refused on this basis. For me, these attributes offer a pragmatic way for deciding who and how to trust. They also suggest a good basis on which to judge responsible tax and responsible tax advice.

But I think we can go further.

The need for transparency

In the past, institutions operated very much behind closed doors, literally and metaphorically; leadership was a top down and hierarchical, not networked; the greater good was defined not by the many, but by the few. Trust was being dictated from above, while revolutions, accelerated by the march of technology, were stirring from below.

The world has changed. It will go on changing – faster still.

The key drivers of honesty, competence and reliability remain. But transparency has been radicalized in recent years – and, for me, this is very much a good thing. Transparency drives a different working culture and a different trust environment – where organisations are more networked, more open and more adaptive – and where there is now no option but to champion honesty in every dimension. This is good for tax.

Critically, transparency enables us to invite others into both the discussion and the decision-making process – all the more important given the number of paradoxes and polarities that prevail in a competing, globalized world. There is rarely an easy or a fast solution – especially on tax – but we can and must listen to the voices of the many, not the few.

Important new conversations are emerging on this basis. If the trust fracture is acute at the intersection of business, politics, citizens and civil society, so this is where open and honest new dialogues are needed most. Complexities and contradictions - and the tax world is riddled with them - can be surfaced and discussed; disagreements and dissent (themselves trust-builders as part of the natural human condition) can be welcomed. New, better solutions can be found by working together for a better future – one that can only be negotiated, not imposed.

How the Responsible Tax initiative helps

Inviting these kind of conversations to take place is precisely what we are doing with this global Responsible Tax initiative. It speaks to the new normal in business, and posits that a first step in trust may be inviting everyone to have a perspective.