•We investigate the unique agency relationships and dual board structure.•We use cross country sample over the period 2006–2014.•We find evidence of the scope of operation hypothesis.•The greater the ...size of unrestricted contracts the higher the agency costs.•The paper has clear policy implications regarding the design of governance mechanism.
We investigate the influence of the dual board structure on the financial performance of Islamic banks. The paper also investigates the unique agency relationships using a sample of 90 Islamic banks across 13 countries over the period 2006–2014. We find that the larger the Shari’ah Supervisory Board (SSB) the better the financial performance and this result reinforces the fundamental role of the SSB to certify permissible financial instruments and products. We also find evidence of the scope of operation hypothesis with respect to both the board of directors and the SSB as Islamic banks are characterised by a higher degree of complex operations. Interestingly, we find that a larger SSB size may result in lower agency costs and that the greater the size of the unrestricted contracts, the higher the agency costs. This implies that unrestricted profit-sharing contracts are one of the main sources of the unique agency relationships in Islamic banks. The paper has a number of policy implications for regulators including the design of governance mechanisms in Islamic banks and the dynamics of unrestricted contracts.
This paper examines the relationship between corporate social responsibility (CSR) and financial performance in Islamic banks. Using a comprehensive CSR index covering ten dimensions, we analyse the ...CSR disclosures in a sample of 90 Islamic banks across 13 countries. The CSR disclosure index shows that Islamic banks engage across the range of social activities, both as individual banks and as countries. However Islamic banks seem to show more commitment to the vision and mission, the board and top management, and the financial product/services dimensions, whilst least attention is paid to the environment dimension. Islamic banks also show a considerable awareness of the mandatory disclosure recommendations of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) however, they pay less attention to the voluntary CSR disclosure. Moreover, we find a pronounced emphasis in Islamic banks strategy towards more universal disclosures, suggesting the legitimacy of these banks is reinforced through disclosure to the wider stakeholder community. The empirical analysis highlights a positive association between CSR disclosure and financial performance. We also find a positive and highly significant association between the Shari’ah supervisory board (SSB) size and CSR disclosure index. Finally, the results of the three-stage least squares estimation show that the causality between the two endogenous variables runs from financial performance to CSR disclosure. Thus CSR disclosure is determined by financial performance.
The corporate governance framework comprises of a supervisory board, which acts as a liaison between numerous investors with varying interests, influences and motives, and the management. The ...supervisory board has a crucial role to play in the corporate governance system, as they adopt strategies that are vital for the survival and growth of the business. This paper examines the role of the supervisory board in corporate governance, the factors that determine its effectiveness, and the representation of women on these boards. The paper analyzes the characteristics and performance of women on supervisory boards, the barriers they face in securing membership on these boards, the concept of the glass ceiling, and prior research on the relationship between gender diversity and the performance of supervisory boards. Based on the results of regression analysis, it is determined that there exists a weak yet positive correlation between the number of women on the supervisory board and the profits realized by large companies in the Republic of Croatia.
A Notary in Indonesia is a public official appointed by the Minister of Law and Human Rights of the Republic of Indonesia. Its function is crucial in ensuring certainty, order, and legal protection ...in the realm of civil law. In carrying out their duties, a notary is obliged to maintain the integrity and dignity of their profession by avoiding violations stipulated in the Notary Office Law and Code of Ethics. Administrative sanctions can be imposed on a notary who violates the rules, such as written warnings, temporary suspension, honorable discharge, and dishonorable discharge. Finally, dishonorable discharge can be applied when a notary faces the threat of imprisonment for five years or more. However, if the threat of imprisonment is less than five years, the notary still has the opportunity to resume their profession after serving the sentence. The issue arises when the Notary Office Law does not provide clear provisions regarding the imposition of penalties if a notary faces a criminal threat of less than five years more than once. This situation creates a legal norm vacuum and ambiguity in the role of the Notary Supervisory Board in determining sanctions against notaries who commit such violations.
Based on the notion that a diverse board takes a more balanced perspective and pays greater attention to financial reporting oversight, this paper examines the association between board gender ...diversity and financial reporting quality. Specifically, we study the enablers that allow women to add value to the monitoring activities in the context of limited affirmative actions to promote women on boards. We provide evidence that increased share of women on boards is associated with improved financial reporting quality proxied by reporting timeliness, earnings management, and auditor opinions. We find that in companies that do not have a sufficient number of women on boards, the critical mass effect can be replaced by the “voice” effect, i.e., it is still possible to improve financial reporting quality by having a woman chair the board.
•Our study examines how managers’ characteristics influence supply chain management strategy.•Using a panel dataset of Chinese listed firms to examine the relationship.•Managerial myopia has a ...positive impact on supply chain concentration.•Offering long-term incentives to the supervisory board is an effective approach.
Managerial myopia refers to the tendency of managers to focus on short-term goals and neglect long-term value creation. Supply chain concentration, on the other hand, refers to the degree of concentration of customers and suppliers within a firm’s supply chain network. Our study examines the potential impact of short-term managerial myopia on supply chain concentration, specifically focusing on customer and supplier concentration, within the framework of upper echelons theory. Additionally, we explore the moderating role of long-term incentives for the supervisory board in this relationship. Using a panel dataset of 3,356 Chinese listed firms spanning from 2010 to 2021, we apply a two-way fixed effect model to examine the relationship between short-term managerial myopia and supply chain concentration. Our study reveals a significant positive relationship between short-term managerial myopia and customer concentration (and supplier concentration). Moreover, we find that long-term incentives for the supervisory board moderate the effects of short-term managerial myopia on supply chain concentration, highlighting their role in balancing short-term and long-term decision-making. To ensure the validity of our results, we conducted robustness checks and performed an endogeneity analysis. We contribute to the field of supply chain concentration by emphasizing the importance of managerial characteristics, specifically short-term managerial myopia, in supply chain decision-making. Additionally, our research contributes to the corporate governance literature by highlighting that long-term incentives for the supervisory board serve as an effective strategy for mitigating the influences of short-term managerial myopia on supply chain management.
This study examines Shariah governance in Islamic banks by analyzing and comparing international and national Shariah governance codes across 11 countries and the annual reports of the largest ...stand-alone Islamic bank in each of these countries. Drawing upon the practice theory framework, this study identifies the similarities and differences across countries in Shariah governance practices, practitioners, and praxis. Regarding practices, we found that the 11 countries reviewed have adopted different approaches, i.e., strict, moderate, or flexible approaches, in developing regulations for Shariah governance structures and processes. The approach taken by each country, in turn, influences Shariah governance practitioners and praxis at the institutional level to some extent. Specifically, Islamic banks in countries belonging to the moderate and flexible groups are likely to be more varied in terms of Shariah governance practitioners as well as praxis (activities or processes) to ensure Shariah compliance as compared to their counterparts in countries with strict regulations. Analyzing current Shariah governance practices in these 11 countries can promote a greater understanding and resolution in addressing critical issues due to different contextual circumstances. Therefore, the findings of this study can provide relevant information for both regulators and practitioners to further improve the Shariah governance best practices in the Islamic banking industry.
Rad sustavno obraðuje odgovornost članova nadzornog odbora. Iako članovi nadzornog odbora ne vode poslove društva, njihova je uloga važna jer oni paze na to da se poslovi vode na način koji je ...prihvatljiv svim interesnim skupinama u društvu i oko njega. Pritom je njihova odgovornost ureðena po istom načelu kao i odgovornost članova uprave koji vode poslove društva. Takva odgovornost polazi od njihove temeljne obveze da djeluju u interesu društva. U radu se ponajprije obraðuje standard pažnje koji se traži od članova nadzornog odbora u obavljanju njihovih poslova, pri čemu se daje poseban osvrt na ulogu članova u nadzornom odboru vladajućeg društva i u nadzornim odborima ovisnih društava u koncernu. Potom se obraðuje učinak primjene pravila poslovne prosudbe kojom se štiti slobodna poduzetnička prosudba članova nadzornog odbora, a zatim i sukob interesa članova nadzornog odbora i povreda obveze čuvanja poslovne tajne. Rad se u nastavku pobliže bavi zahtjevom za naknadu štete prema članovima nadzornog odbora. Pritom se obraðuje pitanje prema kojim se članovima nadzornog odbora može postaviti takav zahtjev, pretpostavke odgovornosti za štetu i ostvarenje tog zahtjeva, a potom odricanja društva od tog zahtjeva i mogućnost sklapanja nagodbe izmeðu društva i člana nadzornog odbora. Zaključno se obraðuje odgovornost zbog iskorištavanja utjecaja u društvu.
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