Royal Ahold: A Failure Of Corporate Governance
AbstractRoyal Ahold (Koninklijke Ahold NV) was one of the major success stories in the 1990sand is one of the major failures in corporate governance, suffering a complete meltdownin 2003. This clinical study analyzes Aholdâ€™s growth strategy through acquisitions andisolates the cause of the failed strategy, i.e. the absence of internal as well as externaloversight of managementâ€™s strategy. This study details the consequences of the strategy:bad acquisitions, an accounting scandal and the loss of investor confidence. It illustrateshow initially a family and later professional management exploited the intent of the lawand existing regulatory structures to maintain absolute control of the company. Itanalyzes in detail the applicable governance mechanisms of Ahold that were designed tohold the self-interest of the parties in check. It asks the reader to consider whether thesegovernance mechanisms, properly implemented, might have helped prevent Ahold or asituation similar to Ahold.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam. in its series Research Paper with number ERS-2005-002-F&A.
Date of creation: 25 Jan 2005
Date of revision:
Contact details of provider:
Web page: http://www.erim.eur.nl/
corporate governance; international economics; regulation; law and economics; financial economics;
This paper has been announced in the following NEP Reports:
- NEP-ACC-2005-02-06 (Accounting & Auditing)
- NEP-ALL-2005-02-06 (All new papers)
- NEP-BEC-2005-02-06 (Business Economics)
- NEP-FIN-2005-02-06 (Finance)
- NEP-HIS-2005-02-06 (Business, Economic & Financial History)
- NEP-LAW-2005-02-06 (Law & Economics)
- NEP-REG-2005-02-06 (Regulation)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Degryse, H. & Jong, A. de, 2001.
"Investment and Internal Finance: Asymmetric Information or Managerial Discretion?,"
ERS-2001-86-F&A, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- Degryse, Hans & de Jong, Abe, 2006. "Investment and internal finance: Asymmetric information or managerial discretion?," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 125-147, January.
- Degryse, Hans & de Jong, A, 2006. "Investment and internal finance: Asymmetric information or managerial discretion?," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/101234, Katholieke Universiteit Leuven.
- Bauer, Rob & Braun, Robin & Clark, Gordon L., 2008. "The emerging market for European corporate governance: the relationship between governance and capital expenditures, 1997–2005," Open Access publications from Maastricht University urn:nbn:nl:ui:27-19321, Maastricht University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ERIM Series Handler at the ERIM Office).
If references are entirely missing, you can add them using this form.