Ahold facing crisis of confidence

Related tags Fraud Corporate governance Board of directors

Anders Moberg, new chief executive of embattled Dutch retailer
Ahold, has his work cut out to persuade investors and shareholders
that he is the right man for the job - and merits the €10m salary
he will receive. His first task may be to remove a number of
Ahold's old guard and weaken his links with the company's troubled

Ahold's troubles seem unlikely to ease with the appointment of a new management team. The beleaguered retailer, struggling after the discovery of widespread accounting fraud, may have to undergo another change at the helm to restore confidence among investors.

Ahold's new chief executive, Anders Moberg, has already got off to a uncertain start. The former Ikea executive brought in to replace Cees van der Hoeven after the accounting scandal, has so far been reticent when it comes to explaining how he hopes to turn the business around - and how he can justify his €10 million salary at a time when the company is struggling financially.

This latter point threatened to derail Moberg's plan before it even got going, with shareholders at the company's EGM last week voting him in as chief executive only because not to do so would have been even worse for the company.

But while shareholders remain to be convinced that Moberg's salary is justified, they have, for now at least, turned their attention to the remaining Ahold executives, and in particular supervisory board chairman Henny de Ruiter.

Most of the company's supervisory board has remained unchanged since the accounting scandal, and Moberg's attempt to gain the confidence of shareholders will not be helped if he is surrounded by a team with links to the company's less-than-salubrious past.

As chairman of the board, de Ruiter's is most likely to be the head that falls, according to a report in the Financial Times​, although he is only likely to leave if he believes it will help restore investor confidence in the retailer.

With the company due to release its audited figures for 2002 - revised after the fraud revelations - by the end of the month, de Ruiter could step down before then to allow a new chairman to be elected at the subsequent shareholders' meeting.

Ultimately, whether de Ruiter stays or goes may not be down to him alone. If Moberg believes that de Ruiter's presence will do more harm than good, the chairman may be forced to leave, whatever his personal feelings.

Either way, Moberg and the remaining Ahold​ management team face a difficult task of persuading shareholders and investors that Ahold's glory days can be regained.

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