A Resolution the Family Board Can Sign: Approving a Three-Year Cocoa Responsibility Program With a Budget, Targets and a Way to Stop It
Student Name
American College of Education
CSR5003: Principles and Practices of Corporate Social Responsibility
Module 6 Assignment
Instructor Name
August 7, 2028
The Recommendation
The board of Marrow Creek, the family-controlled chocolate maker in this course, should approve a three-year cocoa responsibility program. Under it, the company will require its two cocoa traders, at the contract renewal eighteen months from now, to disclose the cooperatives supplying its program cocoa, to report household monitoring coverage and child labor remediation with independent verification and to keep at least three-tenths of its cocoa physically separate from other supply, traceable to program cooperatives, by the close of year three. The program's gross cost is about $1.18 million a year, of which the company would bear about $590,000 after co-funding from its largest retailer and concessions from its traders. The company will publish annual results under the reporting rules adopted in Module 5.
The earlier modules supply the reasons. Module 1 concluded that the company owes cocoa-farming families three things, knowing its supply, helping fund remediation and telling the truth about both, grounded in its ethical responsibilities and in international guidance that expects businesses to prevent or mitigate human rights harms linked to their products (United Nations, 2011). Module 2 found child labor, deforestation and farmer income to be the company's most material topics. Module 3 showed that the company cannot act on those topics while it knows only its cocoa's country of origin. The board is not being asked to solve child labor in West Africa; it is being asked to stop not knowing.
Why Now
The board might reasonably ask why a problem documented for two decades requires action this year. There are three answers. First, the problem has not gone away. The federally funded survey of the 2018 to 2019 season put the number of children doing child labor in cocoa-growing homes of the two countries at roughly one and a half million, most in dangerous tasks, and showed the rate climbing through a decade in which cocoa output grew (NORC at the University of Chicago, 2020). Second, the company's customer and one of its markets now require evidence of due diligence, turning a long-standing ethical question into a commercial deadline. Third, the trader contracts renew in eighteen months, and the terms written into them will set the company's knowledge of its supply for the following three years. If the board waits past the renewal, the next opportunity to change what the company knows about its cocoa will not come until the end of the decade.
Acting now also lets the company shape its approach rather than adopt whatever its traders or retailer eventually offer. A program designed by Marrow Creek, with its own reporting rules and exit conditions, is more likely to produce knowledge the company can use than a template imposed on it later.
What It Costs and What It Protects
At about $590,000 a year, the company's share equals about 1.8 percent of its operating profit of $33.6 million. In return, it protects a retail relationship that contributes about $25 million a year and meets much of the traceability the European deforestation rules require for 12 percent of sales, which would otherwise require separate spending. From the third year, a one-to-two-cent price increase on premium lines could shift part of the cost to consumers once results are verifiable. Evidence that performance on material sustainability issues is associated with better financial performance, while spending on immaterial issues is not (Khan et al., 2016), supports concentrating spending here rather than on broader programs.
The board should also understand the cost of the alternative outcome. The retailer has stated its requirement publicly, and a supplier that cannot show due diligence risks being replaced at the retailer's next category review, not immediately but predictably.
Three Alternatives Rejected
Doing only what the retailer's questionnaire requires, with a policy statement and a supplier code of conduct, would cost little. It would likely fail the retailer's first verification review and would leave the company exposed in Europe. More importantly, it would not tell the company anything about its cocoa. Buying all cocoa as certified on a mass balance basis would cost less than segregation and would allow a claim that all cocoa is sustainably sourced, but as Module 5 showed, that claim would not describe the company's own supply, and it would not produce the cooperative-level knowledge the program needs. Moving to 100 percent segregated, traceable cocoa immediately would be the most ambitious option, but the traders cannot supply it at that scale for eighteen months, and its cost, roughly three times the recommended program, would require price increases the retailer has said it will not accept this year.
The recommended program is therefore the most the company can do well now, with a clear path to expand.
Risks the Board Should Expect
Three risks deserve the board's attention. First, the program will find child labor. Monitoring that works identifies cases, and the first reports will show them. The board should expect this and should approve, as part of the program, a communication plan that explains to the retailer and the public that identified and remediated cases are evidence of the program working. Second, costs may exceed the estimate by up to a quarter, mainly if monitoring finds more children needing remediation. The resolution caps annual spending at $1.5 million gross without further approval. Third, a trader may refuse the new terms. The company would then shift volume to the other trader or to a third, which the market can support at its volume.
Governance and a Way to Stop
The program will be overseen by the board's audit committee, which already reviews the company's financial reporting and can review the independent verifier's reports. The chief operating officer will own the program and report to the committee twice a year on four measures: the share of cocoa traceable to cooperatives, monitoring coverage of supplying households, children identified and remediated and cost against budget. The board will review the program in full at the end of year two.
A recommendation a board can approve also needs a condition under which the board would change course. If, at the year-two review, monitoring coverage in supplying cooperatives remains below 60 percent despite the traders' contractual commitments, the committee will recommend either changing traders or redirecting the budget to a collaborative sector program with other chocolate makers, rather than continuing to pay for coverage the company does not receive.
The Resolution
Resolved, that the board approves the Cocoa Responsibility Program as described in the accompanying paper, including cooperative-level disclosure, verified household monitoring and remediation and a segregated share of at least 30 percent of cocoa purchases by the end of the third year; authorizes annual gross program spending of up to $1.5 million, with the company's net share not to exceed $750,000 without further board approval; directs management to negotiate co-funding with the company's largest retail customer and program terms with its cocoa traders at the next contract renewal; assigns oversight to the audit committee, which shall receive reports twice yearly on the four program measures; and directs that the program be reviewed in full at the end of its second year against a monitoring coverage threshold of 60 percent.
References
Khan, M., Serafeim, G., & Yoon, A. (2016). Corporate sustainability: First evidence on materiality. The Accounting Review, 91(6), 1697-1724. https://doi.org/10.2308/accr-51383
NORC at the University of Chicago. (2020). NORC final report: Assessing progress in reducing child labor in cocoa producing areas of Côte d'Ivoire and Ghana.
United Nations. (2011). Guiding principles on business and human rights. United Nations Human Rights Office of the High Commissioner.
How this CSR 5003 Module 6 example is structured
CSR 5003 Module 6 usually asks for one responsibility recommendation a board could actually approve; your classroom's instructions decide the format. This example states the recommendation first, then gives the board what it needs to decide: the reasons, the cost and who bears it, the alternatives rejected, the risks and how the program will be governed. It ends with resolution language, because a recommendation a board can actually approve has to be one it can vote on.
CSR5003 Module 6 questions, answered
What does CSR5003 Module 6 usually ask for?
CSR5003 Module 6 usually asks students to make one CSR recommendation that a board could realistically approve, drawing on their earlier analysis. Many sections expect cost, alternatives, risks and governance to be addressed. Your classroom's instructions decide whether it is a paper, memo or presentation.
What makes a CSR recommendation approvable by a board?
A clear scope, a cost with a cap, the financial and risk case, alternatives considered, named oversight, measurable targets and a condition for review or exit. Ending with resolution language shows the board exactly what it is voting on.
Should a CSR program plan for bad news?
Yes. Programs that monitor conditions, such as child labor, will find problems. Planning in advance how to explain identified and remediated cases protects the program from being judged a failure for doing what it was designed to do.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official American College of Education document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.