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How we manage risk (continued)
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Declaration
Risk factors
Ahold at a glance
Our strategy
Our performance
Governance
Our Global Code of Conduct (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.
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 www.ahold.com.
Monitoring and assurance
We use a comprehensive business planning
and performance review process to monitor the
Company's 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. In order to meet
business needs and the requirements of the Dutch
Corporate Governance Code, we have a Group-
wide management certification process in place,
which requires that the executive management
team members at each of our reporting entities
send letters of representation to the Chief
Corporate Governance Counsel on a quarterly
basis. These letters confirm whether they are in
compliance 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
responsible retailing standards is confirmed through
bi-annual letters of representation. Both our Internal
Control and Internal Audit functions help to ensure
that we maintain and improve the integrity and
effectiveness of our system of risk management and
internal control. Internal Audit undertakes regular
risk-based, objective and critical audits. These functions
also monitor the effectiveness of corrective actions
undertaken by management, including significant
audit findings.
Governance, Risk management and
Assurance Committee
The Governance, Risk management and Assurance
(GRA) Committee oversees governance, risk
management and assurance processes. The GRA
Committee is chaired by the Chief Corporate
Governance Counsel and (i) advises the Executive
Committee on all matters concerning the GRA
Framework, including an overall GRA vision and
strategy, (ii) oversees activities to develop and
maintain a fit-for-purpose GRA Framework and
(iii) engages with Ahold's senior management on
important developments in the context of GRA.
During 2013, the GRA Committee met twice.
In addition to Ahold's Chief Corporate Governance
Counsel (Chairman), the Chief Financial Officer
sits on the GRA Committee, as do other members
of management responsible for governance, risk
management, compliance and assurance functions.
Financials
Investors
Ahold Annual Report 2013
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 Management 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.
With respect to financial reporting, management
has assessed whether the risk management and
control systems provide reasonable assurance that
the 2013 financial statements do not contain any
material misstatements. This assessment was based
on the criteria set out in COSO: Internal Control -
Integrated Framework. It included tests of the design
and operating effectiveness of entity level controls,
transactional controls at significant locations, and
relevant general computer controls. Any control
weaknesses not fully remediated at year end were
evaluated. Based on this assessment, management
determined that the Company's financial reporting
systems are adequately designed and operated
effectively in 2013 and provide reasonable
assurance that the financial statements are free of
material misstatement.
The principal risk factors that may impede the
achievement of Ahold's objectives with respect
to strategy, operations, financial and compliance
matters are described in the following section.
The enterprise risk management system, the
governance and control standards incorporated
within our ABC Framework, and the monitoring
systems described above are the principal means by
which we manage these risks. Management is not
aware of any important failings in these systems as
of year-end 2013.
The following overview of risks relating to Ahold
should be read carefully when evaluating the
Company's business, its prospects and the forward-
looking statements contained in this Annual Report.
Any of the following risks could have a material
adverse effect on Ahold's financial position,
results of operations and liquidity or could cause
actual results to differ materially from the results
contemplated in the forward-looking statements
contained in this Annual Report.
The risks described below are not the only risks
the Company faces. There may be additional
risks that we are currently unaware of or risks that
management believes are immaterial or otherwise
common to most companies, but which may in the
future have a material adverse effect on Ahold's
financial position, results of operations, liquidity
and the actual outcome of matters referred to
in the forward-looking statements contained in
this Annual Report. For additional information
regarding forward-looking statements, see the
Cautionary notice.
