Abstract

Ahold is a major retailer in the US and Europe. The accounting scandal at Ahold’s US Foodservice destabilized the company and sent its share price and market standing for a toss. The scandal prompted the company to order an internal investigation which unearthed other irregularities at its operating companies in the US, Latin America and Europe. The series of frauds and mismanagement affected the company badly. The company forced its top management to resign. However, a new management and a forward-looking strategy have helped it bring it back from the brink of financial ruin. The case discusses the accounting scandals and its aftermath. The case throws light on the efforts made by Ahold after the scandals to improve its control and reporting systems so as to enhance its corporate governance structure. The case emphasizes the importance of good corporate governance practices in the long-term growth of companies.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• The importance of good corporate governance practices in business
• The need for a control and reporting system to foster good governance
• and The importance of strong ethical standards in business.

Keywords

Ahold NV, US Foodservice, WorldCom Inc, Enron Corp, Accounting Scandal, Dutch Corporate Governance Code, Albert Heijn, Jerónimo Martins Retail, Velox Retail Holdings, Disco supermarket chain, Sara Lee Corporation, ConAgra, Securities and Exchange Commission, Deloitte & Touche, Joint Venture, Merrill Lynch, Standard & Poor, PricewaterhouseCoopers, Cees Van der Hoeven, Michael Meurs, Tabaksblat committee, Corporate Governance