A Model for Due Diligence Analysis of Non-financial Risks and Their Management - The DANFiRM Model

Abstract: This master thesis presents a qualitative model for performing a due diligence analysis of non- financial risks and their management, the DANFiRM model. The model includes a thinking process and a working procedure for identifying and evaluating the current non-financial risk exposure at the target enterprise and further required measures for altering risk exposure and risk management activities to meet the purchasing enterprise’s demands. The outcome of the analysis offers an overview of the risks, and further required measures, that threaten the strategic or profit goals of the acquisition. It could be used as an instrument in the negotiation process in connection to an acquisition. The model is based on background information from literature and interviews with representation from seven major enterprises.