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How we manage risk (continued)
Ahold's principal risks and uncertainties
Description of risk Strategy Key risk drivers
Simplicity
Responsible retailing
Risk mitigating actions
Potential consequence
Ahold at a glance I Business review I Governance I Financials I Investors
Information security (O) Better place to shop
A lack of security around, or non-compliance
with, privacy requirements for customer data
might negatively impact strategic initiatives
relating to customer loyalty
- Consumer confidence
- Sensitivity of data
- Changing privacy regulations
- Use of third parties to process and store data
- Global security threats
- Growth of online sales
Legislative and regulatory environment (C)
A changing legislative and regulatory
environment increases the cost of doing business,
tax levels and the complexity of our operations
Product safety (O, C)
The consumption of own-brand products or other
food or non-food products, or food fraud in the
supply chain could result in our customers' injury,
illness or death
- Compliance deadlines
- Increased and targeted enforcement
- Government budget deficits
- Public opinion pressure
- I nternational Tax Developments
(e.g. OECD and EU regulations)
- Internationalization of the supply chain
- Incidents across the world
- Increased number of own-brand products
- Speed of communications (social media)
1 Risk objectives: strategic (S), operational (O), financial (F) and compliance (C) risks listed in alphabetical order.
Ahold
Annual Report 2014
- Strategic and tactical information security
policy and guidelines
- Information security governance
- Control standards for information management
and security
- Payment Card Industry (PCI) and privacy
compliant control framework
- Information security capabilities
- Information security awareness program
- Cyber insurance coverage
- Knowledge and awareness of regulations
- Monitoring, review and reporting on changes
- Operational procedures and guidance
Ahold's business operations generate and
maintain confidential commercial and personal
information concerning customers, employees,
suppliers and the Company. Disclosure of
confidential information to unintended third
parties may negatively impact Ahold's corporate
reputation and competitive position or result
in litigation or regulatory action. This could
have a material adverse effect on Ahold's
financial position.
Ahold's activities are subject to various laws
and regulations in each local market where it
operates. The cost of compliance with any of
these laws could impact Ahold's operations and
reduce its profitability. See further discussion of
consequences of the legislative and regulatory
risks below.
- Product safety policies
- Control standards for food and
non-food products
- Standard operating procedures
- Dedicated product integrity departments
at Group level and in the business
- Monitoring of performance in the business
Though it has mitigating actions in place,
Ahold may face product safety problems,
including disruptions to the supply chain caused
by food-borne illnesses and negative consumer
reaction to incidents, which may have a material
adverse effect on the Company's reputation,
results of operations and financial position.
- Third-party certification