Good Corporate Governance, Board Attributes, and Corporate Tax Planning: The Case of Nestle Nigeria Plc.

Abstract

This paper aims to investigate Board attributes as a subset of corporate governance and their effects on the tax planning of listed manufacturing companies in Nigeria, with special emphasis on Nestle Nigeria Plc. Since the Board is more accountable for overseeing corporate governance than any other organization, this paper discusses the roles of the Board in managing companies' financial plans, the subset of which is tax planning, and in whose interest is this done. By the nature of their business operations, manufacturing companies incur high costs. To meet their profit maximization objective, most of them engage in aggressive tax planning through various tax avoidance schemes and strategies, sometimes in violation of tax law. This paper investigates this subject by using the doctrinal legal research method, including the annual reports of the Company under investigation. The study also addresses similar earlier research conducted in Nigeria and other nations and their shortcomings in achieving the desired outcomes. After reviewing a few studies examining how the Board's characteristics affected corporate tax planning, their differing conclusions were further analysed. The paper concludes that board attributes have little bearing on tax planning. However, it recommends that independent non-executive, executive, and nonexecutive directors on corporate boards be suitably balanced to meet the Company's tax planning goals. It also advocates the representation of various skills and experience on corporate boards to achieve ideal tax planning and ensure corporate profitability without violating any tax law in force.