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How we manage risk
Ahold's risk management and control systems
are designed to provide reasonable assurance that
the Company's business objectives are achieved.
We take a structured and consistent approach
to risk management and internal control by
aligning strategy, policies, procedures, people
and technology to manage the uncertainties that
Ahold faces.
Risk management and internal control
Governance
Enterprise risk management
Ahold's enterprise risk management program is designed to provide executive management
with an understanding of our key business risks and associated risk management
practices. At each operating company, functional management identifies the principal
risks to the achievement of key business objectives and the mitigating actions needed
to manage these risks. Business risk 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 are 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. The outcome of the Company's enterprise risk management
program influences the formation of our 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 Ahold 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.
Our key controls are documented in Ahold Control Memoranda (ACMs). Compliance
with the ACMs is mandatory for all of Ahold's fully-owned entities. The ACMs include the
requirement for management to assess the operating effectiveness of all key controls.
Ahold Annual Report 2009 28
