How not to mount a professional project: the formation of the ICAEW in 1880

This study addresses ‘the inevitable dilemma facing [leaders of] an occupation’ seeking to progress the professionalisation process through organisational formation, namely that ‘if too many are included as eligible, it may downgrade the whole membership, while if the line is drawn too narrowly, those left out may be of sufficient ability to form a rival body’ (Macdonald, 1995: 192). It examines this dilemma in the context of the formation of the Institute of Chartered Accountants in England and Wales (ICAEW) in 1880 through the merger of five accounting societies formed during the previous decade. We show that creation of the ICAEW was engineered by London City-based accountants, primarily those who had directed the affairs of the ICAEW's elite predecessor body, the Institute of Accountants. We will argue that, through organisational fusion, the ICAEW's leaders expected to achieve organisational closure of the public accountancy profession in England and Wales, but this endeavour was flawed because of their failure either to adopt a sufficiently inclusive strategy at the date of formation or to address that deficiency in the years that immediately followed. This created an alienated population of ‘country accountants’ and left available a substantial reservoir of public accountants from which the first competitor organisation formed—the Society of Accountants—was able successfully to recruit.