The 2018 National Multistate Tax Symposium Take the lead Tax reform and fortifying state positions. February 7-9, 2018

Transcription

1 The 2018 National Multistate Tax Symposium Take the lead Tax reform and fortifying state positions February 7-9, 2018

2 Positioning with the C-Suite Tips for Tax department professionals John Mimlitz, Express Scripts, Inc. Marilyn A. Wethekam, Horwood Marcus & Berk Chtd. Jason Wyman, Deloitte Tax LLP February 7-9, 2018

3 Agenda C-Suite What do they really want? Build your story - Visualization Open discussion 3

4 C-Suite What do they really want? 4

5 5 C-Suite s view of the Tax function? Role of the Tax function in general Financial value Cost center v. profit center Revenue generation Drive competitiveness through tax policy 5

6 6 C-Suite s view of the Tax function? Management of risk and reward for the corporation Avoid schemes and strategies harmful to brand Never accept tax laws as they are embrace policy opportunities. Role in corporate strategic decisions 6

7 Current CFOs face a changing business context Business model changing and disruption, technology and digitization, regulatory and macroeconomic demands impact the context for CFOs Business model and competitive issues New disruptive competitors and business models Convergence across industries and obliteration of traditional industry boundaries Products or services to products + services Competing on design and experiences Activism and capital allocation Finance operations issues Managing the digital finance opportunities: Cloud, Robotic Process Automation, Blockchain, Cognitive and In-memory Accounting for complex product service combinations Developing the next generation of leaders across multiple/different locations, cultures and generations Talent: changing workforce demographics, inclusion, diversity, and the gig economy 7

8 Current CFOs face a changing business context Business model changing and disruption, technology and digitization, regulatory and macroeconomic demands impact the context for CFOs Technology-driven issues Real-time connectivity driving transparency The Internet of Things drives new levels of asset efficiency and new models of competition Social, mobile, analytics, cognitive and cloud transforming competition Digital initiatives demand capital Fracturing of countries, markets and regulations globalization and its discontents Increasing regulatory demands Tax reform? The bathtub recovery, new normal and contestable markets Resource constraints water, energy, minerals Aging populations Regulatory, demographic and macroeconomic issues 8

9 This changing business context drives increased expectations of CFOs as a catalyst and strategy partner to the CEO Catalyze behaviors and change across the organization to execute strategic and financial objectives Catalyst Threshold performance CFO Strategist Provide financial leadership in determining strategic business direction, M&A, financing, capital market and longer-term strategies vital to the future performance of the company Protect and preserve the critical assets of the organization and accurately report on financial position and operations to internal and external stakeholders Steward Operator Balance capabilities, talent, costs, and service levels to fulfill the finance organization s core responsibilities efficiently 9

10 As C-Suite demands grow we observe three different CFO archetypes Traditional finance and technical skills are necessary, but change management, influence and strategy skills are more vital going forward Traditional CFO focused on finance The CFOO The chief financial and operating officer focused broader (IT, real estate Procurement, etc.) Each archetype is likely to have a different career journey, different levels of tax expertise, different relationships with the board and audit committee, and different needs of tax from a communications perspective. Most CFOs want the following from Tax No tax surprises and good tax stewardship and operations Foresight into what is likely to happen and plans to mitigate risk The CFSO The chief financial and strategy officer Value from effective tax planning Support for their strategist catalyst roles as a CFO A positive brand ambassador of finance to the business 10

11 Aligning the role of the CFO with the role of the board Specific areas align to the relationship and opportunities The four faces of the CFO Governance framework Strategist Catalyst Steward Operator Performance, strategy, governance Performance, strategy, talent Governance, integrity, risk Performance, talent 11

12 The audit committee: The CFO is the primary management contact Audit committee top issues Specific areas of oversight A few emerging areas of emphasis Audit committee effectiveness Risk management: Who is responsible for risk oversight and how do boards make sure nothing gets missed? Reputation/crisis management is an issue of increased relevance Internal controls and financial reporting Risk oversight and understanding the business External/Internal audit and management Ethics and compliance IT strategy, risk and security Global tax planning, treasury and cash management Overseeing finance talent/succession planning Emerging markets, including FCPA implications Delegation of authority refresh Effective utilization of internal audit COSO framework Revenue recognition standard Lease accounting standard Agenda setting and prioritization Executive sessions Information management Other committee coordination Meeting type and frequency Managing the size of the gallery Performance evaluations and selfassessments Cyber and technology: In addition to cyber security and risk, aspects of broader technology come up often. Potentially, the existence of legacy systems have increased risk for error, post-merger integration of systems, etc. General effectiveness: How do audit committees cover everything required and allow time for deeper discussions on risk, strategic topics, the future? How do they also making sure that they have people with the right skills to address the issues coming at them? How do they ensure the materials provided to the committee effectively and efficiently convey the information needed to make decisions? 12

13 Be prepared to answer the following questions when with the audit committee A demand for more transparency and an increased focus on reputation and risk drives the increased relevance of tax executives in the boardroom How is management keeping current on global tax issues and the potential for changes in tax policy? Does the company have adequate resources (funding and skills) to address responsibilities and opportunities related to the changing tax policy and legislative landscape? How can legislative changes and tax policy affect the company s effective tax rate, tax reserves and financial reporting? Are the company s tax disclosures in its financial reporting accurate, understandable and complete? What are the company s most significant tax risks related to process and technical issues? What assumptions are embedded in transfer pricing, UTP, and establishing reserves? Source: Taxes In The Boardroom, Thomson Reuters, July

14 Some observations on communications Strong communications are vital for the influence essential to execute the catalyst and strategist roles The C-suite and boards expect Clear and concise communications Strong communications skills requires listening Effective communications demand you adjust and adapt to the listener know thyself and the other Influence without authority is predicated on likeability, trades, and capacity to coalesce the power to persuade Functional skills are the table stakes getting to the next level demands change skills 14

15 Build your story - beginning a visualization 15

16 Data visualization is the presentation of data in a pictorial or graphical format. It enables decision makers to see analytics presented visually, so they can grasp difficult concepts or identify new patterns. Definition from: 16

17 Data Visualization: How do we do it correctly? Creating compelling data visualizations takes five steps 1 Know Your Audience (Design Thinking) What are their challenges? What motivates them? What do they need? 2 Know Your Data (Data Science) Review information, collect data, correct errors, and prepare for analysis 3 Find Your Message (Data Storytelling) Understand the purpose, find the story, and sketch it out and wireframe it 4 Build It Out (Visualization Tools) Execute your plan, leverage the right technology, and make a prototype 5 Make It Effective (Design Principles) Engage your audience, draw attention, and show your point of view clearly 17

18 Step 3: Find your message Creating compelling data visualizations takes five steps 1 Know Your Audience (Design Thinking) What are their challenges? What motivates them? What do they need? 2 Know Your Data (Data Science) Review information, collect data, correct errors, and prepare for analysis 3 Find Your Message (Data Storytelling) Understand the purpose, find the story, and sketch it out and wireframe it 4 Build It Out (Visualization Tools) Execute your plan, leverage the right technology, and make a prototype 5 Make It Effective (Design Principles) Engage your audience, draw attention, and show your point of view clearly 18

19 Open Discussion 19

20 Contact information John Mimlitz Express Scripts, Inc. Marilyn A. Wethekam Horwood Marcus & Berk Chtd. Jason Wyman Deloitte Tax LLP 20

21 Visualization examples - appendix 21

22 Know your message Simply visualizing data is not always enough to show the true significance to the audience. While determining the proper visualization, consider providing the data in a context to emphasize a point. Key visualization questions Are you displaying information in a simple and intuitive way? What is the theme or focus? Are you trying to make a point or persuade your audience? Is the objective and your stance on the topic presented clearly? Copyright 2018 Deloitte Development LLC. All rights reserved. 22

23 Find your message: Drafting Capturing high-level ideas without being constrained by tools Sketching Sketches aim to visualize ideas and concepts that will be shared with others to obtain feedback before investing time and resources in building Tools: Whiteboard, Paper, Pens, and Post-it Notes Wireframing Wireframes are page-level diagrams designed to communicate ideas and content for the visualization, website, infographic, or app Tools: Microsoft PowerPoint, Axure, Illustrator, and Balsamiq Resist tools initially though comforting to jump into a known tool, sketching first could impact your solution and change the tool you use Copyright 2018 Deloitte Development LLC. All rights reserved. 23

24 Step 4: Build it out Creating compelling data visualizations takes five steps 1 Know Your Audience (Design Thinking) What are their challenges? What motivates them? What do they need? 2 Know Your Data (Data Science) Review information, collect data, correct errors, and prepare for analysis 3 Find Your Message (Data Storytelling) Understand the purpose, find the story, and sketch it out and wireframe ith 4 Build It Out (Visualization Tools) Execute your plan, leverage the right technology, and make a prototype 5 Make It Effective (Design Principles) Engage your audience, draw attention, and show your point of view clearly Copyright 2018 Deloitte Development LLC. All rights reserved. 24

25 Step 5: Make it effective Creating compelling data visualizations takes five steps 1 Know Your Audience (Design Thinking) What are their challenges? What motivates them? What do they need? 2 Know Your Data (Data Science) Review information, collect data, correct errors, and prepare for analysis 3 Find Your Message (Data Storytelling) Understand the purpose, find the story, and sketch it out and wireframe ith 4 Build It Out (Visualization Tools) Execute your plan, leverage the right technology, and make a prototype 5 Make It Effective (Design Principles) Engage your audience, draw attention, and show your point of view clearly Copyright 2018 Deloitte Development LLC. All rights reserved. 25

26 Your data is only as good as your ability to communicate it. (and design can help you do that.) Copyright 2018 Deloitte Development LLC. All rights reserved. 26

27 TaxPOV Executive summary 27

28 TaxPOV Income summary 28

29 This presentation contains general information only and the respective speakers and their firms are not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. The respective speakers and their firms shall not be responsible for any loss sustained by any person who relies on this presentation. 29

30 About Deloitte Deloitte refers to Deloitte Tax LLP, a subsidiary of Deloitte LLP. Please see to learn more about our legal structure. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright 2018 Deloitte Development LLC. All rights reserved.