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Declaration
Ahold
Annual Report 2011
Groupata glance
Performance
(Governance
Financials
Investors
How we manage risk continued
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.
Our key control requirements are documented in Ahold Control Memoranda (ACMs). Compliance
with the ACMs is mandatory for all of Ahold's fully-owned entities. The ACMs cover controls
relating to financial reporting and various other business processes. They include the requirement
for management to assess the operating effectiveness of all key controls.
Code of Conduct
Our Global Code of Conduct (the "Code") was revised in 2011, and came into force early 2012.
The Code focuses on the Ahold's core value "Doing what's right" and establishes Group-wide
principles and rules with regard to employee conduct. It is intended to help each employee
understand and follow relevant compliance and integrity rules, and know when and where to ask
for advice or report a breach of the Code. The principles of the Code apply to all employees of
Ahold and its operating companies, as well as to third parties hired by or acting for and on behalf
of Ahold. Employees of defined grade levels acknowledge compliance with the Code. The full
Code is available in the corporate governance section of Ahold's public website at
www.ahold.com.
Monitoring
We use a comprehensive business planning and performance review process to monitor our
performance. This process covers the adoption of strategy, budgeting, and the reporting of
current and projected results. We assess business performance according to both financial and
non-financial targets and have a Group-wide management certification process in place to meet
business needs and the requirements of the Dutch Corporate Governance Code. Each quarter,
executive management of each reporting entity send letters of representation to the Corporate
Executive Board confirming whether they comply with Ahold's global Code of Conduct, policies
on fraud prevention and detection, accounting and internal control standards, and disclosure
requirements. Compliance with Ahold's corporate responsibility standards is confirmed through
bi-annual letters of representation. Our Internal Audit function helps to ensure that we maintain
and improve the integrity and effectiveness of our system of risk management and internal control
by undertaking regular risk-based, objective, and critical audits. Internal Audit also monitors the
effectiveness of corrective actions undertaken by management and has specific procedures in
place for following up on significant audit findings.
Governance Risk and Compliance Committee
The Governance, Risk and Compliance (GRC) Committee oversees governance, risk and
compliance activities within the Ahold Group and reviews relevant reports that are submitted to
the Corporate Executive Board, the Supervisory Board, and the Audit Committee. The GRC
Committee meets quarterly. Ahold's Chief Corporate Governance Counsel (chair) and Chief
Financial Officer sit on the GRC Committee, as do other members of management responsible
for key governance, risk, and compliance functions.
Annual declaration on risk management and control systems regarding financial
reporting risks
Ahold supports the Dutch Corporate Governance Code and makes the following declaration in
accordance with best practice provision II.1.5:
The Corporate Executive Board is responsible for establishing and maintaining adequate internal
risk management and control systems. Such systems are designed to manage rather than
eliminate the risk of failure to achieve important business objectives, and can only provide
reasonable and not absolute assurance against material misstatement or loss.
