How we manage risk continued
Risk factors
Declaration
Overview
Business review
Governance
Financials
Investors
Ahold Delhaize Annual Report 2016
Governance, Risk Management and
Compliance Committee
After the merger, the former Ahold
Governance, Risk Management and
Assurance (GRA) Committee was replaced
by the Governance, Risk Management
and Compliance (GRC) Committee.
The GRC Committee oversees the Company’s
governance, risk management and
compliance processes. The GRC Committee
is chaired by the Chief Legal Officer and (i)
advises the Executive Committee on matters
concerning the GRC Framework, including an
overall GRC vision and strategy, (ii) oversees
activities to develop and maintain a fit-for-
purpose GRC Framework and (iii) engages
with Ahold Delhaize’s senior management
on important developments in the context of
GRC. To support local management and feed
into the GRC Committee, each of our brands
operates a local GRC committee.
During 2016, the GRA and GRC Committee met
periodically. In addition to Ahold Delhaize’s
Chief Legal Officer (Chairman), the Chief
Executive Officer and the Chief Financial
Officer sit on the GRC Committee, along with
the heads of Legal of our main businesses and
other members of management responsible
for our governance, risk management,
compliance and assurance functions.
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 2016 financial
statements do not contain any material
misstatements. This assessment was based on
the criteria set out in COSO: Internal Control -
Integrated Framework 2013. 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, the Management
Board determined that the Company’s financial
reporting systems are adequately designed
and operated effectively in 2016 and provide
reasonable assurance that the financial
statements are free of material misstatement.
The following overview of risks relating to
Ahold Delhaize should be read carefully
when evaluating the Company’s business, its
prospects and the forward-looking statements
contained in this Annual Report. Any or more
of the following risks, when materialized,
could have a material adverse effect on
Ahold Delhaize’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 above statement on internal controls
should not be construed as a statement in
response to the requirements of Section 404
of the U.S. Sarbanes-Oxley Act.
Our principal risks remain substantially
unchanged from 2015. The risk related
to the Ahold Delhaize merger has been
updated to reflect the completion of the
merger and current focus on the integration.
The aggregation of risks to the Ahold Delhaize
enterprise risk management report did not
result in new principal risks, although nuances
have been identified and processed.
The risks described below are not the only
risks the Company faces. There may be risks
or additional risks of which we are currently
unaware 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 Delhaize’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.
No significant incidents, which substantially
impacted the business and its results, have
occurred during 2016.
The principal risk factors that may impede the
achievement of Ahold Delhaize’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
GRC Framework, and the monitoring systems
described above are the principal means by
which we identify and manage these risks.
Management is not aware of any critical
failings in these systems as of year-end 2016.
Annual declaration on risk management
and control systems regarding financial
reporting risks
Ahold Delhaize supports the Dutch Corporate
Governance Code and makes the following
declaration in accordance with best practice
provision II.1.5:
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