The Evolving Role of the CFO : An institutional conception of professional roles and identities

Abstract: An extensive discussion can be observed that addresses the role of the Chief Financial Officer (CFO) as an essential part of a company’s strategic function, whilst the professional origin lies in the technical area of accounting. In relation to the discussion, little academic research has been conducted on the CFO. The few that exist support the strategic orientation of contemporary CFOs but do not address the gap that is the evolvement from being an accountant to a strategic contributor. Specifically, no work has been done to explain the underlying processes of such a substantial transition of a professional role. This qualitative study conducts interviews that provide further evidence that the contemporary CFO is not only contributing but also consolidating strategy. In order to explain the addressed gap as well as the past and ongoing transition of the CFO, an alteration of Scott’s (1995) framework of regulative, normative and cognitive institutional pillars is elaborated that perceives these pillars not as distinct but as interdependent. This way, a conceptual model is provided that shows that the evolvement of professional roles can be explained by the interaction of this institutional concept. The foundation of professional roles is seen in the individuals, who occupy these roles. Therefore, concepts of identity creation are discussed and related to Scott’s institutional pillars. The elaborated relation between institutional pillars and identity creation proves as a valid framework for the processes that underlie the evolvement of the CFO’s role and its respective occupants. Furthermore, it is discussed how the evolvement of the CFO’s role affects others within the organization and that an application of the elaborated framework on other professional roles is possible.