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How we manage risk
Ahold takes a structured and consistent approach
to risk management and internal control by
aligning strategy, policies, procedures, people,
and technology to manage the uncertainties that
the Company faces.
Risk management and internal control
Ahold
Annual Report 2010
Group at a glance
Performance
Governance
Fi nancials
Investors
Ahold's risk management and control systems are designed to provide reasonable assurance
that the Company's business objectives are achieved.
Enterprise risk management
Ahold's enterprise risk management program is designed to provide executive management
with an understanding of the Company's key business risks and associated risk management
practices. At each operating company, management identifies the principal risks to the
achievement of key business objectives and the actions needed to mitigate these risks.
Committees comprised of senior executives at each operating company periodically review these
risks and the related mitigation practices. The findings are consolidated into an enterprise risk
management report that is presented to the Corporate Executive Board and the Supervisory
Board. Executive management at each operating company is required to review the principal
risks and risk management practices with the Corporate Executive Board as a regular part of
the business planning and performance cycle. In turn, the Corporate Executive Board provides
complementary insights into existing and emerging risks that are subsequently included in the
program. The outcome of the Company's enterprise risk management program influences the
formation of controls and procedures, the scope of internal audit activities, and the focus of the
business planning and performance process.
Ahold Business Control Framework
We maintain the Ahold Business Control Framework (ABC Framework), which incorporates risk
assessment, control activities, and monitoring into our business practices at entity-wide and
functional levels. The aim of the ABC Framework is to provide reasonable assurance that risks to
achieving important objectives are identified and mitigated. The ABC Framework is based on the
recommendations of the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
Ahold has developed uniform governance and control standards in areas such as ethical
conduct, agreements, and accounting policies. These and other Corporate Executive Board-
approved policies and procedures are incorporated into the ABC Framework as mandatory
guidelines for all of Ahold's consolidated entities. Within this framework, management is
responsible for local business operations including risk mitigation and compliance with laws and
regulations. Authority limits have been established to ensure that all expenditures and decisions
are approved by the appropriate levels of management.