Royal Ahold’s board of directors responded quickly to the crisis that engulfed the
company following Deloitte’s decision to suspend its 2002 audit.10 The board’s first
major decision was to fire Royal Ahold’s chief executive officer (CEO) and chief financial officer (CFO), each of whom had been implicated in the company’s accounting
irregularities. The board also announced plans to raise much-needed capital by selling several of its foreign subsidiaries. Finally, and most importantly, Royal Ahold’s
board pledged that it would fully cooperate with all law enforcement and regulatory agencies investigating the company’s financial affairs and take the appropriate
measures to ensure that the sources of the accounting problems were identified and
eliminated. These measures served to bolster the flagging confidence of investors and
lenders in the company.