As a company's focus oscillates between the twin poles of performance and risk, staying out of trouble usually exerts a less powerful pull than improving the business ... until something bad happens. Then attention can quickly swing from growth strategies and process improvements to fending off the latest competitive threat or whatever new risk event just crossed the horizon. The risk/performance dynamic is a delicate balance, and the pivot is the office of the CFO.

Right now -- perhaps not surprisingly, given the gyrations in the markets and the current economic deceleration -- finance executives' eyes are on the risk management side of the equation. In a May Business Finance online poll, participants were asked whether they agreed with the statement that finance places a higher priority on supporting and managing risk than on performance management. About 58 percent said the statement was true.

At the same time, enterprise risk management still ranks low on finance's list of priorities, judging by responses to a second question that excluded nuts-and-bolts risk-driven activities such as finance-related compliance and internal control programs. When asked to select from six activities the one they thought tops the CFO agenda, only about 5 percent of respondents cited supporting, managing, and mitigating enterprise risk.

This result meshes with the findings of a recent survey of more than 1,200 finance executives by IBM Global Business Services. The study asked respondents to rate the importance of ten areas of responsibility to their finance organization. Processes around enterprise risk ranked ninth, far below performance-related activities such as measuring/monitoring business performance (which ranked first) and continuous process improvement/business improvement (third).

Yet a proactive approach to enterprise risk is a key differentiator of financially successful companies, according to the IBM study. And so is the bottom-ranked agenda item -- driving integration of information across the enterprise. What's more, these areas are linked in effective organizations. "Across the board, it is clear that they engage in more formal risk management activities than less effective organizations, including the use of monitoring, reporting, historical comparisons, evaluations tools, predictive analytics, risk-adjusted forecasts and process controls," the study notes.

IBM Global Businesses Services recommends that CFOs investigate techniques and disciplines that enable risk-adjusted performance management. Only one-quarter of companies focus on risk-adjusted performance today, but 38 percent will do so within the next three years.

Here are the results of the Business Finance poll:

1. Finance places a higher priority on supporting and managing risk than on performance management.

2. Which activity do you think tops the CFO agenda?

Access the IBM Global Business Services' Global CFO Study 2008: Balancing Risk and Performance With an Integrated Finance Organization here [1] (requires free registration).