The Effects of Board of Directors’ Characteristics on Tax Aggressiveness

Abstract

There is an increasing expectation that investors are aware that tax aggressiveness has a detrimental impact on their investment returns. Corporations try to demonstrate to investors their compliance with tax regulations. This paper examines the effects of board of directors’ characteristics on tax aggressiveness. The study is based on the analysis of a sample of 73 French companies on the SBF 120 index for the period 2006-2010. A regression analysis was used to determine which variables that can reduce tax aggressiveness. Results showed that the board size and the percentage of women in the board affect the activity of tax aggressiveness. Return on assets and size of the firm are significantly and positively associated.

Keywords: tax aggressiveness, board of directors, governance, investors, SBF 120