ABSTRACT
This study delves into the nuanced relationship between corporate governance frameworks and tax aggressiveness practices among multinational corporations in Nigeria. By comprehensively examining various aspects of corporate governance, including board size, diversity, meetings, and independence, and their impact on tax behavior, several significant findings have emerged.
Firstly, the data underscore the paramount importance of board independence in shaping tax aggressiveness practices. A board comprising a higher proportion of independent directors is associated with lower levels of tax aggressiveness, highlighting the crucial role of impartial oversight in promoting ethical tax behavior among multinational firms operating in Nigeria. This finding aligns with broader research emphasizing the necessity of independent governance measures in mitigating unethical business activities.
Secondly, the study highlights the positive influence of board diversity in mitigating tax aggression practices. Boards comprising directors with diverse backgrounds, experiences, and perspectives are shown to be more effective in addressing ethical challenges, including tax avoidance strategies. This underscores the relevance of embracing diversity as a means to enhance governance effectiveness and foster responsible business behavior in the Nigerian context.
However, the analysis also reveals significant complexities in the relationship between corporate governance and tax aggression. Contrary to expectations, no significant relationships are observed between board size and tax aggression practices, suggesting that the sheer number of directors may not be a key determinant of tax conduct. Similarly, the frequency of board meetings does not emerge as a significant indicator of tax aggression, indicating that the quality rather than the quantity of board interactions may be more critical in determining corporate tax strategies.
