44
Ahold
Annual Report 2011
Groupata glance
Performance
(Governance
Financials
Investors
How we manage risk continued
Risks related to information security
Ahold's business operations generate and maintain confidential commercial and personal
information concerning customers, employees, suppliers, and the Company. Our information
security policy mandates that we implement and maintain controls, processes, and tools that
ensure confidentiality, privacy, and integrity of confidential and sensitive information. We also
manage and monitor compliance with our policy and with the various legal and regulatory
requirements. However, disclosure of confidential information to unintended third parties may
negatively impact Ahold's competitive position and corporate reputation or result in litigation or
regulatory action. This could have a material adverse effect on Ahold's financial position, results
of operations, and liquidity.
Risks related to business and IT continuity
A number of Ahold's critical business processes and functions are concentrated in a limited
number of centralized facilities and or are dependent on IT systems and infrastructure, key
personnel, outsourcing providers, and other key suppliers for which limited or no comparable
back-up is available. If any of these critical business processes or functions suffer a severe
disruption that renders such facilities, critical IT systems or infrastructure, key suppliers, or key
personnel unavailable, Ahold could experience disruption to its supply chain, store, and
administrative operations. We continue to invest in recovery plans and security initiatives for
the facilities and technology systems that support critical business processes and take steps
to mitigate the dependency risks associated with our key strategic suppliers. However, these
measures cannot fully prevent business interruptions that could have a material adverse effect
on Ahold's financial position, results of operations, and liquidity.
Risks related to food, non-food safety and social compliance
The growing internationalization of the supply chain, the increasing sale of own-brand products,
including vegetables and other non-branded products, in Ahold's stores, along with increased
regulation, continue to make food and non-food safety as well as social compliance one of the
Company's most significant business risks. We have product safety (food and non-food safety)
and social compliance policies and practices in place for our own-brand products. However,
Ahold may face product safety or social compliance problems, including disruptions to the supply
chain caused by food-borne illnesses and negative consumer reaction to any incidents, which
may have a material adverse effect on the Company's reputation, sales, financial position, results
of operations, and liquidity.
Risks related to corporate responsibility
Increased regulatory demands, stakeholder awareness and the growing sentiment that large
retailers must address sustainability issues across the entire supply chain mean that Ahold's
brands 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. We continue to develop a broad range of
coordinated and focused programs to address issues such as climate change, energy efficiency,
waste reduction, social accountability, healthy living, community engagement, and corporate
responsibility reporting. If these programs are not successful or are otherwise inadequate, the
reputation and competitive position of Ahold and the Ahold brands could suffer. See Ahold's
Corporate Responsibility Report 2011 for additional information about our policies and programs
in this area.
Risk related to social media
Social media and networking sites are now commonplace and their use has increased
enormously. Social media may be used by individuals or groups to comment on our company
or products. The speed at which social media operates can result in unrealistic expectations of
customer service and the loss of control by Ahold over the image of our brands. Furthermore
social media may be used by employees, who could disclose confidential information. Ahold
has prepared social media guidelines and is monitoring activity in the social media relating to
our banners and products.
