War in Iraq was not the only issue that led people to suggest that Corporate Social Responsibility (CSR) and corporate citizenship was avoiding the most important issues about corporations' relations with society. In January the Observer newspaper lampooned the "the burgeoning Corporate Social Responsibility (CSR) industry" for having "comprehensively failed to make the fair and transparent payment of tax a core issue." What was the problem? Not-so-legal tax dodging, and not-so-illegal transfer pricing. Deloitte & Touche estimated that Europe-wide tax dodging was worth almost £100 billion a year. Meanwhile, one academic study estimated that transfer pricing has been costing the US Treasury $53bn, and well over $50bn a year to countries in the global South. Transfer pricing is the practice where one company reports that it sells products to another company in the same group at a higher or lower price to ensure the profits can be recorded in the company that faces lower tax rates. It is about moving money from one country to another to avoid tax. This practice is not without social consequences, given the poor state of national budgets in many Southern countries, and because governments have little option but to shift the tax burden onto labour, raising the costs of employment and reducing the take-home wages.

The Observer pointed out how difficult it is to obtain good information about the regional breakdown of corporate revenues and taxes: "It is impossible to know each territory in which a transnational corporation (TNC) operates, nor the amount of tax paid to each jurisdiction. And transfer pricing will flourish as long as there is no obligation to report the split between third-party and inter-group trading, despite the fact that 60 per cent of world trade takes place within these firms." 24

Isn't supporting a government, if not dictatorial or corrupt, through paying them taxes a corporate citizenship issue? Citizens pay taxes, after all. Craig MacKenzie, head of investor responsibility at Insight Investment, the asset manager of HBOS, told the Observer that "tax is not even on the periphery when it comes to responsible investing." It seems that corporate citizenship, or CSR, has yet to escape the mentality of "look at how much better I am - than the rest, and than I was before." Could corporate citizenship mature from being about trying to look nicer and actually grapple with systemic problems of the global political economy? Perhaps only if we change what we consider looking "nicer" means.

A report by the Association of Accountancy and Business Affairs (AABA) went some way in this direction. Richard Murphy, author of the report, questioned why financial reporting remains so narrow. 'What does big business have to hide? I can't think of a greater measure of corporate accountability than paying your dues. More openness and transparency will go a long way to restoring investor confidence.' Murphy claimed that reporting turnover and tax by territory would shine a spotlight on TNCs in a manner in which CSR does not. If companies would publish information on a) all territories where they operate b) the turnover to third parties in and out of each territory c) sales to group companies made from each territory d) tax rates in each territory e) actual tax paid in each territory, then we would know exactly how much the companies are avoiding paying by transfer pricing. Perhaps this could be a new dimension to George Soros's "Publish what you Pay" campaign?

The Observer suggests that the consultants working on corporate citizenship issues at the Big Four auditors will see AABA's proposals a little differently. "For behind the brochures and the stakeholder rhetoric sits a pinstripe mafia of tax planners and transfer price specialists whose raison d'etre is to maximise profits in an age of mobile capital."

The Observer article was touching on a key issue thinly hidden behind corporate citizenship - corporate power. Does corporate citizenship imply private enterprise entrenching its power in the global economy, by increasing its freedom to be helpful to others only as and when it so desires? Is it inherently anti-State and, therefore, anti-democracy? Or can it evolve to something more democratic? The Observer was clear on this: "big business should pay its dues and governments should spend the proceeds."

The questions of corporate power and democracy raised here in the context of war in Iraq and tax avoidance, but which have existed for decades have not been well dealt with by the management studies academe. The Academy of Management (AoM) intended to address this in the annual conference, in Seattle, with the core theme of 'corporations and democracy.' Whether the crucial issues would be discussed was to be seen. [See 'Beyond Management' for a report on this conference.]