Abstract
We address the scarcity of empirical research on Shariah Compliance Disclosure (hereafter referred to as SCD) by presenting new evidence on the levels and range of SCD, of 807 bank‐year ...observation of Islamic Financial Institutions (hereafter referred to as IFIs) in 19 countries for the period from 2010 to 2020 and its determinants. Using an unweighted disclosure index measured by manual content analysis categorized into Shariah Supervisory Board (hereafter referred to as SSB) information, audit process, Shariah compliance review and Zakat, several outcomes are documented. In general, the SCD level is above average (57.38%) and hence evidence an overall growth during the sample period. Further, the study examines the relationship between corporate governance (CG) and SCD and the results indicate that foreign investors, institutional investors, board size, board independence, SSB reputation and SSB size are vital and influence the extent of SCD level. The study also conducted several tests to examine the main findings' robustness. The findings deliver valuable in‐depth empirical insights to regulatory bodies on the current SCD practises of IFIs to assist policymakers in modifying reporting frameworks or guidelines accordingly. In addition, this research can support academics, policymakers or standard setters and managers interested in seeking information about SCD and CG.
There is a growing concern about environmental issues, particularly carbon emissions, in many countries. Indonesia, with its huge population, also suffers from excessive carbon emissions. This study ...aims to investigate the effect of family businesses on environmental performance, specifically carbon emission disclosure. This study also explores the role of the family supervisory board and management on the quality of carbon emission disclosure. The study employed 62 non-financial family-listed firms in 2017–2019 (186 observations). The analysis found a positive and significant relationship between family enterprises and the disclosure of carbon emissions, implying that family firms expose more information about their carbon emissions. It also revealed a significant positive association between the family supervisory board and carbon emission performance, suggesting that having family members on the supervisory board aligns with policies for reducing and maintaining accountability for carbon emissions. In summary, the findings suggest that family enterprises prefer to exercise their indirect control by holding a position on the supervisory board and owning a substantial percentage of the company’s stock corresponding to their socio-emotional wealth agenda. Additionally, there is a non-linear association between family firms and the disclosure of carbon emissions. Carbon emission performance decreases as family share ownership rises to 53.1% but increases when family equity exceeds this cut-off point. Finally, family shareholders in non-polluted firms report higher quality of carbon emission disclosure.
Purpose -This study empirically investigates the function of Shariah Supervisory Board (SSB) in legitimizing the social and ethical existence of Sudanese banks through the dissemination of data ...onIslamic social in annual reports.
Design/methodology/approach -The paper examines a panel dataset covering the period 2006 – 2015 through the use of disclosure index and content analysis from 150annual reports of Sudanese banks. The role of SSB is expressed from the aspects of Corporate Governance mechanisms (i.e. board size, independency, doctoral qualification, cross- directorship, and the overall effect of SSB mechanisms).The current study employs the multiple regression models by using STATA-13 statistical toolin answering the research questions.
Findings -The empirical results indicate that the board size, doctoral qualification, and cross-directorship of the members were positively correlatedwith the disclosure degree of Islamic Corporate Social Responsibility (ICSR) in the annual reports of Sudanese Islamic banks, which is in favour of legitimacy theory. Meanwhile, results indicate that, in contrary to legitimacytheory’s assumptions,the independence of SSB members is found to negatively correlate with the ICSR level of disclosure of the sampled Sudanese banks’ annual reports. Furthermore, the overall effects of SSB mechanisms are found to positivelyimpact the ICSR disclosure level. The study’sfindings add new empirical evidence to support the view that social information disclosure by companies is influenced by country- cultural context within which the company operates.
Theoretical implication - In theory, this paper offers an analysis on CSR in Sudan from Islamic point of view. This paper is vital in view that social responsibility is highly regarded by Islam. Therefore, social responsibility must be adopted by all Islamic organizations, particularly the Islamic banks.
Originality/value – From the researchers’ perspective, this study is the pioneer thatinvestigates the role of SSB on Sudanese Islamic banks through social responsibility reporting using legitimacy theory.
We examine the differences in risk between Islamic and conventional banks with specific attention to the role of Shariah supervisory board (SSB) composition on risk in Islamic banks. Using a sample ...of banks from 28 countries, we find that Islamic banks have a higher liquidity risk, lower credit risk, lower insolvency risk, but encounter similar operational risk in comparison with conventional banks. Operational and insolvency risks in Islamic banks decline with an increase in SSB size and SSB members' academic qualifications, but increase with an increase in the number of reputed Shariah scholars on the SSB. The SSB attributes do not have significant influence on liquidity and credit risks. The findings are robust to alternative risk measures, and the use of a system GMM estimator.
•Examines the risk characteristics of Islamic and conventional banks•Evaluates the effect of the dual-board system on risk in Islamic banks•Investigates the resilience of Islamic vis-à-vis conventional banks to the GFC
Managing human capital, directing enterprises or institutions, as well as broadly understood management has always been a task requiring special skills. It is mainly about the knowledge of issues in ...the area of operation of a given entity, but also of widely developed "soft skills". Essential for the development of these competencies is - experience in executive positions, which the legislator very often requires from people applying for management positions in state units. The essential element of the work is to present the tasks of the members of the supervisory board, whose nature is the same or similar to the tasks of management staff. That is to prove the thesis set out in the title of the article that the function of a supervisory board member is a managerial function. The study contains an analysis of the principal legal acts from the systemic and institutional perspective in Poland. This article is a theoretical work, based mainly on cognitive research, using the historical-legal, dogmatic-legal and comparative methods.
Purpose This study aims to examine the joint effect of accounting background and cross-membership of Islamic Supervisory Board (ISB) members on bank investment efficiency. Design/methodology/approach ...This study uses data collected from 36 Islamic banks across 15 countries globally, spanning the period from 2012 to 2021. This research uses an ordinary least squares regression and a comprehensive set of endogeneity and robustness tests. Findings The findings show a negative relationship between the accounting background of ISB members and investment efficiency. However, when ISB members with accounting backgrounds also have ISB cross-memberships, the banks exhibit high investment efficiency. These results suggest that ISB cross-membership plays a crucial role in facilitating Islamic banks’ access to timely information on investment opportunities. This enables ISB members with accounting expertise to thoroughly assess the benefits and risks associated with their investment prospects. These findings imply that ISB members with accounting backgrounds and cross-memberships have greater motivation and thoughtful considerations for making better investment decisions. Consequently, Islamic banks are better positioned to undertake high profitable investment projects, which enhance their investment efficiency. Practical implications The current study holds immense value for Islamic bank management in their selection of ISB members who possess an accounting background and cross-membership. Originality/value This study delves into a comprehensive investigation of the proficiency, underlying principles and unique characteristics exhibited by ISB members with an accounting background. Moreover, this study acknowledges the burgeoning global prominence of Islamic banks.
The purpose of this study is to examine the relationship between human capital (HC), quality of the shariah supervisory board (SSB) and performance of maqasid shariah-based Islamic banks. This study ...uses secondary data from the Bankscope database of 2014 to 2018. The research samples comprised 75 banks from a total population of 96 banks. Using the dynamic panel regression two-step generalised method of moments (GMM), this study revealed that HC has a significant and positive influence on sharia maqasid-based performance. SSB quality has a significant and negative effect on Islamic banks' performance. These findings support the resources-based theory that assumes more efficient human capital can facilitate the achievement of better organisation performance. The results may serve as a guideline for Islamic bank managers to enhance their bank human capital as it has a positive relationship with maqasid sharia-based performance.
This paper examines the impact of Sharia supervisory board (SSB) and governance structures on the extent of operational risk disclosures (ORDs), using a sample of 63 Islamic banks from 10 (i.e., ...Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, and the UAE) countries in the Middle East and North Africa (MENA) region for the fiscal years 2006 to 2013. Drawing on Sharia compliance, Islamic banking and corporate governance literature, our findings are as follows. We find that SSB, block ownership, board independence, and country-level governance quality are statistically significant and positively associated with ORDs. Our results are robust when controlling for several bank- and country-level variables. Our study has implications for policy-makers and regulators in the MENA region with respect to the development and implementation of SSB and governance mechanisms that can improve operational risk disclosures. Finally, the findings highlight the need to enhance current understanding of SSB structures and governance mechanisms that can best help Islamic banks towards engaging in effective compliance with recent governance and accounting reforms.
Purpose This paper aims to examine the effect of dual board governance structure, i.e. Shari’ah supervisory board (SSB) and board of directors (BoD), on the performance of Islamic banks (IBs) in ...Southeast Asia region versus banks in the Gulf Cooperation Council (GCC) region.
Design/methodology/approach This study uses a sample of 45 IBs over seven countries covering the period of 2007-2015 based on the GMM estimator – First Difference (2-step).
Findings The findings reveal that SSB and BoD for IBs in both regions are segmented in terms of ROA (negative interaction) and integrated in terms of Zakat ratio (Zakat on equity ZOE) (positive interaction) only for Southeast Asia region. Furthermore, SSBs positively affect multi-bank performance in Southeast Asia while its effect is absent for GCC. This suggests that Shari’ah governance practices for IBs in Southeast Asia are stronger compared to GCC IBs. Finally, BoD has a significant association with low ZOE for IBs in both the regions.
Research limitations/implications The implications of this research is that the unique agency theory depicted in this study can be inferred when analyzing how dual board structure affects IBs' performance.
Practical implications For regulators in both regions, SSBs must be given real power to monitor BoD. They should also balance the number of SSB scholars with experience in Shari’ah, as well as in law, accounting and finance. It is also important that such a balance of scholars with PhD in these areas be required for Southeast Asia IBs. For the GCC’s regulators, CG practices need to be improved by giving due importance to SSB characteristics and BoD structure.
Originality/value Though the effects of dual board structure on IBs' performance has been previously examined in the literature, only SSB size has been used as a single proxy of SSB governance. Furthermore, no empirical evidence is recorded to date on this issue in Southeast Asia and the GCC regions. One of the innovations of this paper is the use of multi-bank performance measures in the IBs performance and corporate governance.
Iako se o nadzornom odboru u dioničkom društvu puno pisalo, neka su pitanja i dalje otvorena u praksi, a propisi se tumače pogrešno, čime se čak narušavaju i temeljna načela upravljanja dioničkim ...društvom. Rad se bavi općenito temom članstva u nadzornom odboru, a napose odvajanjem funkcije vođenja poslova društva od funkcije nadzora nad vođenjem poslova, pitanjem zastupljenosti spolova u članstvu nadzornih odbora i nezavisnošću članova nadzornog odbora. Odvajanje vođenja poslova od nadzora nad vođenjem poslova društva ključni je element kojim se osigurava nezavisnost članova nadzornog odbora.
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