COMPARISON OF GOOD CORPORATE GOVERNANCE DISCLOSURE AND ACHIEVEMENT OF THE MAQASHID SHARIAH BETWEEN INDONESIAN AND MALAYSIAN ISLAMIC BANKS

Ima Maspupah,Shofia Mauizotun Hasanah

doi:10.47312/aifer.v3i01.254

Abstract

As part of the corporate organization, Islamic banks are encouraged to create good performance. But in the benchmark, there are still Islamic banks that assess the performance of banks using conventional measuring instruments. So in this study using maqashid index approach to measure the performance of Islamic banks. In addition to creating good performance, the obligations of business organizations are also to take part in activities aimed at protecting and improving the welfare of society as a whole and creating good corporate governance. banks in Indonesia have poor corporate governance rankings compared to neighboring countries such as Malaysia. So the purpose of this comparison study, it is hoped that there will be some advantages between them that can be identified. The method used in this research is quantitative method by using Mann-Whitney test. The data used are annual reports from three Indonesian islamic banks and three Malaysian Islamic banks. The results obtained no significant differences in Good Corporate Governance between Indonesian and Malaysian Islamic banks. While the achievement of maqashid shariah both have differences. This is because, firstly, the difference between banking history and the second, the difference of implementation of Shariah compliance in both countries.Keywords: Good Corporate Governance, Islamic Banking, Maqashid Shariah

Highlights

Islamic banks are financial institutions that perform the function of financial intermediation primarily aimed at the wider community for financial transactions selected in accordance with Islamic principles
In Indonesia, Otoritas Jasa Keuangan (OJK) recorded as of June 2016, the sharia banking sector has total assets of Rp306.23 trillion consisting of 12 Sharia (Islamic) Branches, 22 Sharia Business Units (Sharia Divisions) and 165 Shariah Financing Banks (BPRS)
This study reveals the differences in several aspects related to the implementation of Sharia compliance between Islamic banking business in Malaysia and in Indonesia

Summary

INTRODUCTION

Islamic banks are financial institutions that perform the function of financial intermediation primarily aimed at the wider community for financial transactions selected in accordance with Islamic principles In its implementation, this Islamic Shari'a-based banking system has expanded widely in various countries including in western countries. According to Eagle, the number of Sharia banks in the world in 2010 is 300 banks with total assets worth US $ 700 billion in 70 countries in the world such as Indonesia, Malaysia, Saudi Arabia and United Kingdom.. It is imperative for sharia banks to use a measure that can help improve their role through good corporate Islamic business.. Malaysia and Indonesia are two Muslim countries in Southeast Asia, which, when examined, have many similarities. It is evident that Malaysia is still listed as the country with the largest sharia financial assets in Southeast Asia and in the world. Http://finance.detik.com/read/2015/06/13/160254/2941564/5/aset-keuangan-syariahmalaysia-terbesar-di-dunia-10-kali-lipat-dari-ri. accessed on April 28, 2016 at 08.37

10 RHB Capital

RESEARCH METHODOLOGY

RESULTS

Result

DISCUSSION

CONCLUSION