A Conceptual Framework for Aligning Corporate Tax Governance, Regulatory Compliance, and Responsible Financial Management

Abstract

Corporate tax has moved from a technical back-office function to a board-level matter of strategy, risk and reputation. Public scrutiny of multinational tax practices, the OECD/G20 Base Erosion and Profit Shifting (BEPS) project, cooperative compliance programmes and expanding transparency regimes have raised the cost of treating tax governance, regulatory compliance and financial management as separate domains. Yet the literature remains fragmented: tax avoidance research focuses on incentives and outcomes, compliance research on enforcement and taxpayer behaviour, and corporate finance research on value and risk. This paper develops an integrative conceptual framework that explains how the three domains can be aligned. Drawing on agency, stakeholder, legitimacy and institutional theories, together with enterprise risk management logic, the framework specifies three pillars (corporate tax governance, regulatory compliance and responsible financial management), four alignment mechanisms (strategic, structural, informational and cultural), contextual antecedents and expected outcomes. Eight research propositions are derived, and a typology of alignment profiles is offered. The framework contributes a common vocabulary for researchers, a diagnostic tool for boards and finance leaders, and a basis for policymakers designing cooperative compliance regimes.