Responsibility in Paradise? The Adoption of CSR Tools by Companies Domiciled in Tax Havens

Lutz Preuss

Journal of Business Ethics

September 2012, Volume 110, Issue 1, pp 1-14

• Introduction
• Defining a Tax Haven
• An Ethical Evaluation of Tax Havens
• Tax Havens and Corporate Social Responsibility
• Research Method
• CSR Tool Adoption
• Code of Conduct Content
• Mimetic Pressure in OFC Firm Codes
• Conclusions
• References

In contrast to the recent rise to economic importance of offshore finance centres (OFCs), the topic of taxation has so far created little interest among scholars of corporate social responsibility (CSR). This paper makes two contributions to addressing this lacuna. Applying a range of influential normative theories of ethics, it first offers an ethical evaluation of tax havens. Second, the paper examines what use large firms that are headquartered in two OFCs—Bermuda and the Cayman Islands—make of formal CSR tools. The emerging duplicity in tax haven-based companies professing social responsibility highlights once more the political nature of CSR, where at least some firms and/or industries can successfully limit government power to enact regulation as well as shape the discourse around CSR. The study of CSR in OFC-based firms thus calls into question the usefulness of the often quoted definition of CSR as going beyond the law.