Risk Management: “In the light of evolution”

Jacob Dahl Eriksen

Student thesis: Diploma thesis


This thesis has been prepared with the purpose of identifying the history of Risk Management and whether or not the modern types can be measured as valuable. This thesis also has anoth-er perspective, which is to look at modern Risk Management in the light of evolution. The rea-son for this, is to identify if there is any link between modern Risk Management and human’s natural instincts. The structure of this thesis is first to identify the critical evolutionary instincts which charac-terize the human behavior mostly. Afterwards the modern Risk Management’s history is being analyzed to identify the origin of the ideas. After the most relevant philosophies and ideas of modern Risk Management has been identified the thesis will analyze the theoretical ideas be-hind strategic and financial Risk Management to see how it is used in the practical strategic and financial planning of Danish C20 companies. Basically the thesis focuses on identifying two major themes in order to measure Risk Management as valuable. First the methods of in-ternal Risk Management systems are identified and afterwards the types of reported Risk Management (incl. Corporate Governance and CSR) are identified. The measurement of Risk Management as a valuable instrument in major companies is made on the basis of the types that are reported as part of the annual report or other supplementary reports. When all the major reported types of Risk Management are identified an analysis of the Dan-ish listed C20 companies’ annual reports and supplementary reports is conducted. The analy-sis will measure the potential value of Risk Management by the use of the key figure: 𝑆ℎ𝑎𝑟𝑒 𝑃𝑟𝑖𝑐𝑒𝑁𝑒𝑡 𝐴𝑠𝑠𝑒𝑡 𝑉𝑎𝑙𝑢𝑒 (𝑁𝐴𝑉) The analysis will compare the results from the companies’ key figure, as mentioned above, with the degree and level of reported Risk Management compliance. It is supposed that all the companies in all materiality complies with the regulation of Risk Management reporting. Therefore the analysis will especially focus on whether or not one or more of the reported Risk Management types is applied with an Auditor’s statement – to assess the degree of third party control/regulation over the reported Risk Management ratios and conditions. Finally the thesis will try to look at the potential uncertainties and limitations of (i) the use of effective Risk Management systems in practice and (ii) the reported types of Risk Manage-ment. The reason for this, is because this thesis will try to answer whether or not Risk Man-agement is a valuable instrument to use in the strategic and financial planning of companies. To answer that critical question modern Risk Management is put in to the light of evolution, by comparison of natural human instincts.

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
Publication date2015
Number of pages89