Royal Ahold (Koninklijke Ahold NV) was one of the major success stories in the 1990s and is one of the major failures in corporate governance, suffering a complete meltdown in 2003. This clinical study analyzes Ahold’s growth strategy through acquisitions and isolates the cause of the failed strategy, i.e. the absence of internal as well as external oversight of management’s strategy. This study details the consequences of the strategy: bad acquisitions, an accounting scandal and the loss of investor confidence. It illustrates how initially a family and later professional management exploited the intent of the law and existing regulatory structures to maintain absolute control of the company. It analyzes in detail the applicable governance mechanisms of Ahold that were designed to hold the self-interest of the parties in check. It asks the reader to consider whether these governance mechanisms, properly implemented, might have helped prevent Ahold or a situation similar to Ahold.

corporate governance, financial economics, international economics, law and economics, regulation
Corporate Finance and Governance (jel G3), Market Structure, Firm Strategy, and Market Performance: General (jel L10), Business Administration and Business Economics; Marketing; Accounting (jel M)
ERIM Report Series Research in Management
ERIM report series research in management Erasmus Research Institute of Management
Erasmus Research Institute of Management

de Jong, A, DeJong, D.V, Mertens, G.M.H, & Roosenboom, P.G.J. (2005). Royal Ahold: A Failure Of Corporate Governance (No. ERS-2005-002-F&A). ERIM report series research in management Erasmus Research Institute of Management. Retrieved from