Decoding tax management: The role of corporate governance mechanisms

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Abstract

While tax pressure remains a major concern in corporate management, it is legitimate to ask whether tax has always been among the core factors of corporate governance (Chytis et al., 2020). This study aims to examine the influence of corporate governance on tax management practices within Moroccan firms listed on the Casablanca Stock Exchange (CSE). Focusing on three dimensions of corporate governance — board composition, audit committee structure, and external audit quality — we employed multiple regression analysis on data spanning 2014–2019 from a sample of 48 listed firms, totaling 288 firm observations. Significantly, board size, chief executive officer (CEO) duality, and external audit quality are found to be pivotal factors shaping tax management practices. Other corporate governance variables, notably the independence of the board of directors and the structure of the audit committee, do not appear to exert a significant influence on the tax management of listed Moroccan companies. Our study is one of the few to have addressed the issue of tax management in the Moroccan context. Moreover, it may also serve as a fundamental resource for researchers exploring the complex dynamics of tax practices in the organizational context.

Keywords: Tax Management, Corporate Governance, Board of Directors, Audit Quality

Authors’ individual contribution: Conceptualization — N.A.H.; Methodology — N.A.H.; Software — N.A.H. and S.S.; Validation — S.S.; Formal Analysis — N.A.H.; Investigation — N.A.H.; Resources — S.S.; Data Curation — N.A.H. and S.S.; Writing — Original Draft — N.A.H. and S.S.; Writing — Review & Editing — N.A.H.; Visualization — N.A.H.; Supervision — S.S.; Project Administration — S.S.; Funding Acquisition — N.A.H.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: H26, G30, G32, M42

Received: 18.05.2023
Accepted: 16.01.2024
Published online: 18.01.2024

How to cite this paper: Ait Hattani, N., & Sahbani, S. (2024). Decoding tax management: The role of corporate governance mechanisms. Corporate Governance and Organizational Behavior Review, 8(1), 83–93. https://doi.org/10.22495/cgobrv8i1p7