The other week, Richard Murphy who is a colleague that writes about ‘tax justice’ and I penned a reply to an article that appeared in the January 3rd issue of the FT. The title of the original piece was: Accountants face up to the moral maze. Our response is here (it is behind the FT paywall) but you can see the full text at my personal weblog.
The thrust of the FT argument was that training solves ethical problems. Our response was that there has been a marked shift in the ethical compass among professional accountants and that this needs addressing before concerns around training. In short, we were taking on the big guns and calling them to account.
Regardless of the various arguments, this exchange opens an interesting question that anyone managing GRC or CSR projects needs to consider. To what extent should ‘we’ take notice of the fact there are diametrically opposed opinions about a topic area?
This can be tricky, especially when you’re looking at topics as delicate and emotive as taxation. Both Richard and I share strident views that frequently run counter to the mainstream but that doesn’t make them any less valid. As a source on issues around the impact of tax corruption for instance, our views are seen as arcane in many quarters. In my opinion, the fact Richard has recently been funded to undertake a two year research project on this topic speaks for itself.
What should we do? What is the position of those who are advancing the CSR agenda in the context of a company that sells software? For me the answer is simple. Being aware of the fact that people like Richard are respected for the views they hold, we should seek to help customers understand the potential risks. In the tax arena, my work indicates there is often a disconnect between provisions made in reported accounts, amounts paid and the consequent deferred tax. This is what Richard refers to as the Tax Gap. I see it as indicative of process failure.
By thinking about how business processes feed not only into the determination of the various numbers but the audit and compliance work that should accompany these figures, we are providing a non-judgmental way of approaching the problem. I believe this helps the customer decide for themselves the risks they face across what are often multiple jurisdictions.
In considering how CSR and GRC initiatives are fed between business, process and technical development people, I believe we pave the way for developing sustainable solutions with broad appeal.
I have used a tough issue as illustrative of the difficulties people face when trying to wrestle with GRC issues. That should not frighten us away. It should encourage us to develop solutions that will be welcomed as not only groundbreaking but of lasting value.
Of one thing we can be sure. As the GRC/CSR agenda unfolds, there will be many such scenarios. Are those of us who truly care about these issues ready to face what I belive are some of the most interesting business challenges? As the title says: where do we draw the line?