o www.ahold.com/reports2009
How we manage risk - continued
Financial risks
Governance
Risks related to corporate responsibility
Increased regulatory demands, stakeholder awareness and the growing sentiment that
large retailers must address environmental and sustainability issues across the entire
supply chain mean that Ahold's brand and reputation may suffer if it does not adequately
address relevant corporate responsibility issues affecting the food retail industry.
Furthermore, if we fail to effectively increase the fuel and energy efficiency of our
operations or to reduce waste, our operational and cost competitiveness may be adversely
affected. Ahold continues to develop a broad range of coordinated and focused programs
to address issues such as climate change, energy efficiency, waste reduction, labor
standards in the supply chain, sustainability, healthy living, community engagement and
corporate responsibility reporting. If these programs are not successful or are otherwise
inadequate, Ahold's reputation and competitive position could suffer. See Ahold's
Corporate Responsibility Report 2009 for additional information about our policies and
programs in the area of Corporate Responsibility.
Risks related to business transformation
Ahold is making changes in its U.S. and European businesses to create a strong platform
for future growth. The reorganization in both continents delineates areas of responsibility
and will further simplify and standardize processes and structures so that the Company
can integrate acquisitions more easily. These projects are carefully planned and
implemented and proceed with a high degree of ongoing attention from executive
management. However, it is possible that some transformation initiatives will not be
completed in a fully effective or timely manner. Any inability to effectively implement
these changes could impact numerous processes and procedures across the organization.
Key associates might choose to leave Ahold rather than relocate, or prior to project
completion. Business and IT resource knowledge and availability are limited. The timing
of required changes across the business could conflict, causing processes to fail or
changes to be delayed. Therefore, these transformation activities could cause disruption
as systems, processes and resource talent changes and could adversely affect Ahold's
financial position, results of operations and liquidity.
Risks related to contingent liabilities associated with lease guarantees
Following the divestment of subsidiary businesses, such as BI-LO/Bruno and Tops, and the
closure of certain other facilities, Ahold has outstanding contingent liabilities to third parties
in respect of lease guarantees it has issued. For further information, see Note 34 to the
consolidated financial statements.
