Nearly 100 tax, finance and company leaders from around the world joined Navigant and Bloomberg BNA for a webcast on an exciting topic that is attracting attention of late: the emergence of the Tax Chief Operating Officer (Tax COO). While many participants were learning about the Tax COO position for the first time, an online poll noted that more than a quarter (27%) of the participating organizations have a Tax COO, are considering one now, or are likely to consider one.
The growing prevalence of Tax COOs is in part a result of major changes in tax departments that are shifting the responsibilities of Chief Tax Officers (CTOs) away from operational responsibilities towards more strategic activities. According to Phil Murphy, Tax Executive Search Leader at Spencer Stuart and one of the webcast panelists, “Today we are being asked to look for CTOs who can work with members of the C-suite on mission-critical initiatives such as M&A transactions or market expansions. A lot of companies also want individuals with global experience and those who can manage other functions such as accounting and treasury.”
As CTOs take on these new responsibilities, they have less time to spend on important operational issues, including fostering cross-departmental relationships and developing talent within the tax organization. Bringing in a Tax COO to shoulder operational leadership responsibilities has benefits beyond freeing up the CTO to focus on strategic demands, said Murphy. It also signals to the market that the company is committed to the tax function, and serves as a competitive differentiator to attract top tax talent. Members of the audience agreed: two-thirds (67%) believe that a Tax COO who can align employees with their strengths will help attract high-performing leaders to the tax department.
Panelist Leslie Fox, Global Tax Chief Operations Officer, HP Inc. underscored this sentiment, explaining that it is her job to understand everyone’s role within the tax team. She keeps a pulse on department morale and finds ways to keep people engaged. Much of that engagement hinges on relieving tax department personnel of certain duties--such as identifying the sources of key data or identifying potentially relevant individuals in other departments--that may not play to their strengths. This allows them to focus on what they do best—using their tax technical knowledge to add value to the organization.
Rob Wentland, Tax Controversy Practice Leader at Navigant, who moderated the panel, presented several compelling statistics from recent Gallup surveys. One Gallup survey found that employees who use their strengths every day are six times more likely to be engaged at work, 8% more productive, and 15% less likely to quit their jobs. When polled, one-third (33%) of the webcast’s audience said that low engagement was due to excessively time-consuming tasks (identifying people or data) or constantly shifting priorities. These are both areas that can be addressed by a Tax COO, according to Fox. Not only does she set priorities and ensure that the tax team stays on course, she also serves as a single point of contact for both departmental leaders and the CTO.
While the potential benefits are tremendous, the panelists and audience acknowledged that there are a number of challenges when instituting a Tax COO role. The audience highlighted one obstacle above all others: over 40% of the audience believe that longstanding cultural norms are the single-largest obstacle to implementing an effective Tax COO.
Clearly, a number of organizations are finding that a Tax COO can address the challenges facing today’s tax departments and CTOs. Navigant is exploring this topic in greater depth by partnering with Bloomberg BNA to conduct a first-of-its-kind survey on the topic of tax department COOs. The survey will be distributed to over 7,000 tax and finance leaders to gain a broader perspective on the key skills and responsibilities, benefits, and challenges to establishing the Tax COO role. The survey will launch on May 9, and results are expected to be available in July.
If you were unable to register for the webcast, you can click the link below or contact Rob Wentland at firstname.lastname@example.org.
 “Employees Who Use Their Strengths Outperform Those Who Don't”, October 8, 2015. Copyright © (2015) Gallup, Inc. All rights reserved. The content is used with permission; however, Gallup retains all rights of republication.