For those CFOs who have yet to discover the true value of the corporate tax department, I will give you a crash course on this valuable asset. Allow me to boldly state that I am an expert on what can go wrong and what can go right in your corporate tax department. How would I even know? Thirty plus years as an internationally recognized tax headhunter placing tax executives in multinational corporations all over the world through http://www.etsearch.com/clients.htm which has now been folded into my second company www.taxconnections.com executive search division. After hundreds of thousands of trusted and private conversations with tax professionals, I am an expert counsel to tax executives worldwide searching for corporate tax jobs.
What I will share with you today are real stories from corporate tax leaders, the stories no one may talk openly about at any time. Companies set the culture of their management organizations financial success with the selection of their CFO. A great relationship between the CFO and VP Tax will set in motion a revenue stream that will benefit the company for years to come. You will benefit from learning real stories of what goes on behind the scenes between CFOs and VP Tax executives. The reason I want to share these otherwise untold stories is for you to gain a more insightful understanding of the importance of the relationship between a CFO and the VP Tax.
As I have stated in previous blog posts, the company who has the VP Tax reporting to the CFO has the winning formula to succeed! The company who has the VP Tax reporting to a Controller will rarely get all the information they need to make the best business decisions. A rarely known secret companies do not know and I do from speaking privately to thousands of VP Tax professionals is that 75% of the VP Tax candidates will not even interview for a lead tax executive role if it reports to anyone other than the CFO. The tax executives who do take these roles do so knowing it is a risk; but the underlying sentiment is that they could create increased tax savings and revenue opportunities for the company with better access to the CFO.
The companies out there winning do not make business decisions without consulting their VP Tax first. You see, one of the secret mistakes CFOs make is not consulting their VP Tax on business decisions before a deal is structured. Over the years, lead tax executives and I have had discussions on the mess a CFO can make when they structured a deal without ever getting the VP Tax involved on the front of the deal, in other words, how the deal should be structured for tax advantage. The VP Tax who hears about these transactions after the deal is done, the company who has often lost millions of dollars in potential tax savings revenue. The VP Tax gets the following conversation from the CFO: “Please help me clean up this mess!” If I can help prevent even one CFO from making this mistake I will have saved a CFO and the company money and be very happy about it! The CFO who works closely with their VP Tax prior to any transactions will definitely be the company that wins.
One more story to share today is what I call the “The Truth Is”. The Truth is that most CFOs do not know anything about tax. Now there are a select group of corporations out there who have elevated the former VP Tax to a CFO role and they are doing an outstanding job! I can think of a dozen that come to my mind now and these companies are performing extraordinarily! However, most CFOs who do hire me do not understand tax. I must admit I simply love the CFO who straight up tells me privately “I do not know a thing about tax so please help me find someone who can explain it in a language I can understand.” These are the CFOs who are smart enough to know what they do not know. The key is finding a VP Tax who can explain the highly technical area of tax to the CFO and management and staff in a language they can understand.
Although I will not mention his name, one of my favorite stories is of a VP Tax who had the ability to make his CFO understand what the tax department accomplished every year. Each year he had a different way of demonstrating the value of the tax department. He walked into the CFO of a company and he had millions of dollars of fake money and placed it on his CFOs desk and said “You want to know how much money we made you this year? Well look at this as a reminder of what our team accomplished this year for the company! This VP Tax knew how to make his CFO laugh and visually understand the facts and the value in a language every CFO can understand. He also did this each year a month before the tax departments reviews. 🙂 LOL
Each month I will share my favorite perspectives and stories on corporate tax departments. Please forward this blog post on and if you want to hear more of my secrets register to receive TaxConnections Blogs located at the top of the Tax Blog Page.
When you need to hire a Chief Tax Officer/VP Tax/Tax Director, you will find it valuable to work with a retained tax search firm specializing in locating lead tax executives for your corporate tax department.
Please contact Kat@taxconnections.com or call 858.999.0053.