Barry Callebaut (A): To Follow the Chair?

Published 26 Jul 2019
Reference 6440
Region Africa
Summary

This case puts participants in the shoes of the directors of Barry Callebaut (BC), a cocoa-sourcing and chocolate manufacturing company. Chairman Andreas Jacobs is passionate about cocoa sustainability in West Africa – ensuring the cocoa crop (endangered by poor farming and climate change) and the farmers who grow it will survive and thrive. However, in response to a falling share price, the BC board has shifted strategy to achieve cost leadership. Moreover, customers have been unwilling to pay a premium for sustainable cocoa beans. Given the scale of the problem, the company cannot ‘go it alone’. Nonetheless, when the CEO steps down in 2008, Jacobs sees an opportunity for BC to embrace sustainability and urges the board to go beyond goodwill gestures – like its earlier building of schools in Ivory Coast – and take “real action”. Should the board follow his lead? What would “real action” mean?

Teaching objectives

1. How business should be involved in sustainability and the challenges involved in taking real, impactful action (not simply paying lip-service). 2. Consider sustainability challenges in the context of business challenges – seen through the eyes of the board – and the role of the board in driving sustainability initiatives. 3. Evaluate the extent to which board members should follow the lead of a strong chairman pursuing a personal passion. 4. Identify solutions to the sustainability challenges faced by Barry Callebaut.

Keywords
  • Sustainability
  • Corporate governance
  • Boards
  • Cocoa
  • Chocolate
  • Supply chains
  • Côte d’Ivoire
  • Africa
  • Child labour
  • Poverty
  • Q41819