Royal Ahold: A Failure of Corporate Governance and an Accounting Scandal

A. de Jong, D.V. DeJong, G.M.H. Mertens, P.G.J. Roosenboom

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Abstract

Royal Ahold (Koninklijke Ahold NV) was one of the major success stories in the 1990s and is one of the major failures, suffering a complete meltdown, in 2003.We investigate the strategy, accounting transparency and corporate governance of Ahold; elements which jointly drive the firm s performance over this period of time.In general, the corporate governance, accounting transparency, strategy and firm performance relationships are complex.There is not a fully specified model available to address the inter-relationships, including the endogeneity problem.The econometrics are difficult and constrained not only by the lack of a fully specified theory but also by data availability. Our clinical study overcomes these problems by providing an in-depth analysis of the inter-relationships among corporate governance, accounting transparency and strategy that lead to Ahold s downfall.We provide insights into these relationships and their complexity that present theory and empirical studies cannot address.
Original languageEnglish
Place of PublicationTilburg
PublisherAccounting
Number of pages57
Volume2005-57
Publication statusPublished - 2005

Publication series

NameCentER Discussion Paper
Volume2005-57

Keywords

  • international economics
  • financial economics
  • financial reporting
  • law and economics
  • corporate governance
  • regulation

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