Huffington Post article asks critical questions about CSR

Corporate Social Responsibility is growing by leaps and bounds but it seems that the second and third word of that phrase are perhaps being forgotten by some companies both large and small. In a very well thought out piece on the Huffington Post this week, Margaret Heffernan argues that while an active CSR program is important companies that are making profits should also be accountable for paying their taxes in a responsible fashion, rather than seeking creative methods to avoid doing so. Her complaints are a valid pursuit of fairness and raises numerous questions that should be answered, you can read the entire piece here.

Having read her piece and a few others that are related in the UK press recently which have specifically examined how many retailers have looked for various offshore avenues to reduce or even eliminate their tax burden within the country where they primarily conduct operations, I’m left feeling like an almighty game of ‘bait and switch’ has been performed by some companies. In an era where the lack of regulation in the banking sector led to a global financial collapse and the mechanisms of trust between the public and many large corporations are thin at best this is worse than bad news – it’s an outrage. Nor is such behaviour new, but when a company that her article takes good aim at (I won’t name names as the principle is really the issue I wanted to examine) who is one of the loudest campaigners for the importance of CSR withing their own operations is simultaneously looking to eliminate any tax burden in a purposeful and considered way the public are right to say ‘wait just one minute’. Corporate Social Responsibility is partially constructed around the value of community building and giving back, finding the correct balance between profit and people. Not just the people who work for you but the people in your community and in your orbit, which in my book includes paying tax on your profits – the same way I have to and no doubt you do too. The major company in question does possess an excellent CSR program, one that is considered one of the most impressive in the corporate world but just how devalued is that aspect of their business if their fiscal practices then appear to be so unethical? I’m on the outside looking in at such stories but if they are primarily accurate it creates a bad taste that will linger, an act that ultimately should also impact market share.

Moving operations to Switzerland or Monaco when your profits are created by consumers in Houston or Glasgow not only sounds contrived but it is 100% in opposition to the principles of CSR. Moreover its not as if the concept is tricky or easy to be misinterpreted, social responsibility aren’t words that can be placed on a banner by your public relations department and then ignored by your accounting department. As the Huffington Post article states this is a very risky game being practiced, we’ve entered into a new era in business where thankfully transparency and corporate ethics are being held up to the light and as the power of big business has grown so has the expectation that good ethics must play a part. It isn’t a reach to suggest that the practice of constructing a business model to avoid paying any income taxes is every bit as questionable as the actions of BP and the charges brought against them about poor safety standards which rightly made headlines in 2010. I’d suggest this is perhaps worse, as it is certainly with equal intent.

The sentence from the article in the Huffington Post that should concern everyone most is this:

“GE is not alone in making no tax contribution to the American economy. I have worked with several companies now whose stated aim (at least within their treasury departments) is a $0 tax return. And when the creative bean counters achieve this, there are slaps on the back all round and big bonuses”

Assuming that to be accurate, companies that behave that way should include it on their CSR page on their corporate website or better still – correct the actions.

For the latest CSR and nonprofit fundraising news please follow us on Twitter!