Ahold tightens corporate governance
bolted, Dutch retail group Ahold has today announced that it is to
introduce strict new rules on corporate governance a year after the
discovery of a €1 billion hole in its accounts.
Ahold's new management team, led by former Ikea man Anders Moberg, has moved rapidly to distance itself from the transgressions of the past - vital if it is to restore consumer and investor confidence - and the new rules will give shareholders a greater role in the running of the company.
"With these proposals we reaffirm our strong commitment to corporate governance throughout the new Ahold," said Moberg. "Instead of waiting until next year before reporting on the company's 2004 corporate governance policy, we decided to announce our position today.
"The proposed changes to the Articles of Association, the rules for the Supervisory Board and its committees (audit committee, remuneration committee and selection and appointment committee) and the rules for the Executive Board, as well as the proposed general remuneration policy, substantially satisfy the requirements of the Tabaksblat code [the official Dutch recommendations on corporate governance]."
Moberg said that Ahold was the first company in the Netherlands to convene a shareholders' meeting devoted to corporate governance - planned for 3 March 2004. "Jointly, Ahold and its shareholders can face the future with a confidence born of transparency and constructive cooperation," he said - something that was evidently lacking in the past and a major factor in rapid fall from grace of what was Europe's second largest food retailer after Carrefour.
The rule changes will be sweeping. Shareholder rights will be enlarged, allowing them to play a much larger role in important decisions such as the appointment and removal of Executive Board members and Supervisory Board members. Voting rights have also been changed, with holders of preferred shares (rather than common shares) seeing their votes reduced from 19 per cent of the aggregate votes to approximately 6 per cent, shifting the balance of voting power away from investment bodies towards individual shareholders.
There will also be changes in the composition of the Supervisory Board and Executive in order to ensure greater independence, while the remuneration of Executive Board members will be approved by shareholders - a nod to the concerns raised by shareholders at Moberg's appointment and the seemingly excessive salary he was granted.
Ahold has added a special section to its website on corporate governance, which features all the relevant documents. New changes on corporate governance will also be published on the website.