How we manage risk
Having a structured and consistent approach to
managing risks and uncertainties is key to being
able to fulfill our stakeholders' expectations.
Risk management and internal control
Code of Conduct
Ahold Annual Report 2012 53
Ahold at a glance
Our strategy
Our performance
Governance
Financials
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 important 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).
We have 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, local management is responsible for 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.
Our Global Code of Conduct (the "Code") was revised in 2011and
became effective in early 2012. The Code focuses on 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 have been trained and acknowledge compliance with the Code
on an annual basis. The full Code is available in the corporate
governance section of Ahold's public website at C? www.ahold.com.
