Ethical Reflection and Financial Decision-Making of Chief Financial Officers for Corporate Sustainability
Main Article Content
Abstract
Corporate finance has evolved beyond traditional profit maximization toward a more holistic model that integrates ethical reflection and sustainability principles into decision-making. Within this shift, financial executives particularly Chief Financial Officers (CFOs) face increasing tension between profitability demands and long-term sustainability goals. Despite extensive quantitative studies on the relationship between environmental, social, and governance (ESG) factors and firm performance, little is known about how CFOs experience and interpret this balance in their professional lives. This study addresses that gap by asking: How do CFOs perceive and make sense of the equilibrium between profitability and sustainability in corporate financial strategy? Using an Interpretative Phenomenological Analysis (IPA), the research explores CFOs’ lived experiences to uncover the reflective, ethical, and emotional dimensions of financial leadership. A purposive sampling strategy was employed to recruit CFOs with a minimum of ten years of strategic financial leadership experience, ensuring that participants possessed sufficient insight into long-term sustainability–profitability tensions. Data were collected through semi-structured interviews with seven CFOs and subjected to a systematic IPA analytic procedure, including line-by-line coding, development of emergent themes, and cross-case interpretative convergence to enhance analytic rigor. Reflexive memoing and peer debriefing were incorporated to strengthen the credibility and dependability of the analysis. The findings reveal that CFOs construct meaning through reflective equilibrium balancing ethical responsibility with financial rationality and experience financial decision-making as a process of moral negotiation and emotional awareness. These results extend existing theories of corporate finance by reframing executive decision-making as a moral and experiential phenomenon rather than a purely analytical one. The study highlights the importance of integrating reflective and ethical consciousness into corporate governance practices and invites future research to further explore the phenomenological dimensions of financial leadership across different organizational and cultural contexts.
Article Details
Section
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Campino, J., & Rodrigues, B. (2024). From CFOs to crypto: Exploratory study unraveling factors in corporate adoption. Financial Innovation, 10(1). Scopus. https://doi.org/10.1186/s40854-024-00661-z
Carreiras, H., & Castro, C. (2012). Qualitative methods in military studies: Research experiences and challenges (p. 194). Taylor and Francis; Scopus. https://doi.org/10.4324/9780203099223
Chou, H.-I., Pan, X., & Zhao, J. (2023). Executive pay disparity and cost of debt financing. International Journal of Managerial Finance, 19(5), 1076–1097. Scopus. https://doi.org/10.1108/IJMF-04-2022-0192
Cort, T., & Esty, D. (2020). ESG Standards: Looming Challenges and Pathways Forward. Organization and Environment, 33(4), 491–510. Scopus. https://doi.org/10.1177/1086026620945342
Daly, K. J. (2007). Qualitative methods for family studies & human development (p. 293). SAGE Publications Inc.; Scopus. https://doi.org/10.4135/9781452224800
Fan, M., Chen, D., & Lei, Y. (2025). How government accounting supervision affects corporate financialization? Evidence from random inspections by China’s ministry of finance. International Review of Economics and Finance, 103. Scopus. https://doi.org/10.1016/j.iref.2025.104462
Fife, W. (2020). Counting as a Qualitative Method: Grappling with the Reliability Issue in Ethnographic Research (p. 140). Springer International Publishing; Scopus. https://doi.org/10.1007/978-3-030-34803-8
Gillan, S. L., Koch, A., & Starks, L. T. (2021). Firms and social responsibility: A review of ESG and CSR research in corporate finance. Journal of Corporate Finance, 66. Scopus. https://doi.org/10.1016/j.jcorpfin.2021.101889
Herli, M., Tjahjadi, B., & Hafidhah, H. (2021). Gender Diversity on Board of Directors and Intellectual Capital Disclosure in Indonesia*. Journal of Asian Finance, Economics and Business, 8(1), 135–144. Scopus. https://doi.org/10.13106/jafeb.2021.vol8.no1.135
Hillman, W., & Radel, K. (2018). Qualitative methods in tourism research: Theory and practice (p. 294). Channel View Publications; Scopus. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85050434848&partnerID=40&md5=7ea1e3f0b2027993b53f6a795804ee51
Iosifides, T. (2016). Qualitative Methods in Migration Studies: A Critical Realist Perspective (p. 266). Taylor and Francis; Scopus. https://doi.org/10.4324/9781315603124
Islam, M. U., Baharom, B., & Shahid, M. N. (2025). ESG activities and bank performance with the moderating influence of competition and regulatory quality: A study in the organization of Islamic countries. International Journal of Islamic and Middle Eastern Finance and Management, 18(2), 441–466. Scopus. https://doi.org/10.1108/IMEFM-01-2024-0052
Jing, F., Muhamad, H., Said, R. M., & Daud, Z. M. (2024). Green Credit Policy and Firms’ Green Total Factor Productivity: The Mediating Role of Financial Constraints. Theoretical and Practical Research in the Economic Fields, 15(4), 871–884. Scopus. https://doi.org/10.14505/tpref.v15.4(32).07
Kawamura, Y. (2020). DOING RESEARCH IN FASHION AND DRESS: An Introduction to Qualitative Methods, 2nd edition (p. 166). Bloomsbury Publishing Plc.; Scopus. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85188589040&partnerID=40&md5=b3db406659cd1ea5b20e05664bec39a3
Khan, M. K., Abdul Rasid, S. Z., Bardai, B., & Saruchi, S. A. (2023). Framework of affordable cooperative housing through an innovative waqf-based source of finance in Karachi. Journal of Islamic Accounting and Business Research, 14(3), 379–397. Scopus. https://doi.org/10.1108/JIABR-05-2021-0140
Lee, J. W. (2020). Green finance and sustainable development goals: The case of China. Journal of Asian Finance, Economics and Business, 7(7), 577–586. Scopus. https://doi.org/10.13106/jafeb.2020.vol7.no7.577
Liang, Y., & Zhang, Q. (2025). ESG equity or green credit: Financing strategies for green transformation in the supply chain under consumption subsidies. International Journal of Production Economics, 280. Scopus. https://doi.org/10.1016/j.ijpe.2024.109491
Liu, C., & Wu, Y. W. (2023). Gender diversity and bank risk-taking: Female directors and executives. Managerial Finance, 49(5), 761–788. Scopus. https://doi.org/10.1108/MF-01-2022-0059
Longhofer, J., Floersch, J., & Hoy, J. (2012). Qualitative Methods for Practice Research (p. 224). Oxford University Press; Scopus. https://doi.org/10.1093/acprof:oso/9780195398472.001.0001
Lutz, W., & Knox, S. (2014). Quantitative and qualitative methods in psychotherapy research (p. 448). Taylor and Francis; Scopus. https://doi.org/10.4324/9780203386071
McNabb, D. E. (2015). Research methods for political science: Quantitative and qualitative methods: Second edition (p. 426). Taylor and Francis; Scopus. https://doi.org/10.4324/9781315701141
Migdal, A. B. (2018). Qualitative Methods in Quantum Theory (p. 460). CRC Press; Scopus. https://doi.org/10.1201/9780429497940
Mukhlis, L. (2025a). A Phenomenological Study of Personal Spiritual Experiences in Navigating Religious Pluralism within Interfaith Communities. Irfana: Journal of Religious Studies, 1(6), 212–220.
Mukhlis, L. (2025b). Spiritual Grounds for Economic Growth: A Qualitative Exploration of Rural Indonesian Women’s Transformative Journeys Through Mosque-Led Empowerment Programs. Servina: Jurnal Pengabdian Kepada Masyarakat, 1(8), 289–298.
Mukhlis, L., & Abdullah, M. N. (2025). Hukum Keluarga Islam di Indonesia (1st ed.). Mukhlisina Revolution Center.
Mukhlis, L., Arifin, T., Ridwan, A. H., & Zulbaidah. (2024). Integrating Artificial Intelligenceand Maqāṣid al-Syarī‘ah: Revolutionizing Indonesia’s Sharia Online Trading System. Computer Fraud and Security, 2024(11), 301–309. https://doi.org/10.52710/cfs.238
Mukhlis, L., Arifin, T., Ridwan, A. H., & Zulbaidah. (2025). Reorientation of Sharia Stock Regulations: Integrating Taṣarrufāt al-Rasūl and Maqāṣid al-Sharī‘ah for Justice and Sustainability. Journal of Information Systems Engineering and Management, 10(10s), 58–66. https://doi.org/10.52783/jisem.v10i10s.1341
Mukhlis, L., Arifin, T., Ridwan, A. H., Zulbaidah, Rosadi, A., & Solehudin, E. (2025). Reformulation of Islamic Stock Law: The Application of Taṣarrufāt al-Rasūl and Maqāṣid al-Syarī‘ahto Develop a Dynamic and Sustainable Islamic Capital Market in Indonesia. Journal of Posthumanism, 5(3), 1–13. https://doi.org/10.63332/joph.v5i3.913
Mukhlis, L., Janwari, Y., & Syafe`i, R. (2023). INDONESIA STOCK EXCHANGE: THEORETICAL AND PHILOSOPHICAL ANALYSIS OF MUDHARABAH AND MUSYARAKAH CONTRACTS. Yurisprudentia: Jurnal Hukum Ekonomi, 9(2), 243–264. https://doi.org/10.24952/yurisprudentia.v9i2.8466
Mukhlis, L., Maryam, S., & Sormin, S. A. (2023). Model Pembelajaran Living History Berbasis PjBL Untuk Meningkatkan Keterampilan Histografi Mahasiswa. Jurnal Educatio FKIP UNMA, 9(4), 1800–1809. https://doi.org/10.31949/educatio.v9i4.5595
Mukhlis, L., & Saidah, Y. (2025). Dynamics of Nature-Based learning in Developing Children’s Motoricic Skills: Teacher and Parent Perspectives. HUMANISMA: Journal of Gender Studies, 9(1), 64–79. http://dx.doi.org/10.30983/humanisme.v4i2.9366
Mukhlis, L., Suradi, Janwari, Y., & Syafe`i, R. (2023). Sosialisasi Saham Syariah sebagai Instrumen Pengembangan Ekonomi Masyarakat di Badan Kontak Majelis Taklim (BKMT) Kabupaten Mandailing Natal. Jurnal Pengabdian Multidisiplin, 3(2), 2–9. https://doi.org/10.51214/japamul.v3i2.604
Pezzulli, B. (2025). ESG: From Hype to Scrutiny—Legal Challenges to Fiduciary Duties and Shareholder Value. Journal of Environmental Law and Litigation, 40, 43–84. Scopus. https://www.scopus.com/inward/record.uri?eid=2-s2.0-105009945291&partnerID=40&md5=032c27dfb3ce85758ab75d057481984b
Rabbani, M. R., Kiran, M., Cepni, O., & Naeem, M. A. (2025). Fortune favors the green: Role of green investment in mitigating climate risk and the moderating role of ESG performance. Quarterly Review of Economics and Finance, 103. Scopus. https://doi.org/10.1016/j.qref.2025.102028
Ramdani, A., Raji, R., & Ahmad, M. K. (2024). Exploring the concept and the communication principles of negotiation among Islamic corporate organizations. Journal of Islamic Marketing, 15(4), 1115–1135. Scopus. https://doi.org/10.1108/JIMA-01-2023-0027
Waliszewski, K., Solarz, M., & Kubiczek, J. (2024). Factors Influencing the Use of Buy Now Pay Late(BNPL) Payments. Contemporary Economics, 18(4), 444–457. Scopus. https://doi.org/10.5709/ce.1897-9254.548
Yang, K., Lau, R. Y. K., & Abbasi, A. (2023). Getting Personal: A Deep Learning Artifact for Text-Based Measurement of Personality. Information Systems Research, 34(1), 194–222. Scopus. https://doi.org/10.1287/isre.2022.1111
Yang, L., & Liu, Y. (2025). How the negative list system affect enterprises’ overseas merger and acquisition? Finance Research Letters, 85. Scopus. https://doi.org/10.1016/j.frl.2025.108085
Yol, N. (2025). How a French corporate tax reform raised wages: Evidence from an innovative method. International Tax and Public Finance, 32(2), 387–428. Scopus. https://doi.org/10.1007/s10797-024-09846-9
Yu, E. P.-Y., Luu, B. V., & Chen, C. H. (2020). Greenwashing in environmental, social and governance disclosures. Research in International Business and Finance, 52. Scopus. https://doi.org/10.1016/j.ribaf.2020.101192