Abstract
This study aims to examine and analyze the effect of diversification, corporate governance and intellectual capital on sustainability performance, either directly or indirectly, by involving financial performance as a mediating variable. This study uses secondary data on Islamic Commercial Banks in Indonesia which are registered with the Financial Services Authority from 2011 - 2018, with a sample size of 10 Islamic banks that meet the criteria using the purposive sampling method so that 80 observations are obtained. Data is obtained from annual reports, sustainability reports, and reports on the implementation of good corporate governance. The data analysis technique used SEM-PLS with the help of WarpPLS 7.0 software. The results of the study provide empirical evidence that both the quality and quantity of corporate governance, intellectual capital and financial performance have a positive effect on sustainability performance.
Highlights
Along with the development of the Indonesian economy and the improvement of the quality of society in the aspects of education and religiosity, it raises the desire to run a business in accordance with sharia principles
Based on the results of analysis and research discussion, the factors used to improve the sustainability performance of Islamic banks are intellectual capital and corporate governance. This shows that Islamic banks have quality intangible assets and good corporate governance which is supported by the financial performance of Islamic banks to support operations that prioritize sustainability
The results of this study find that diversification does not show an effect on sustainability performance directly or mediated by financial performance
Summary
Along with the development of the Indonesian economy and the improvement of the quality of society in the aspects of education and religiosity, it raises the desire to run a business in accordance with sharia principles. The effort to raise funds carried out by banks from the community is an effort made to empower community resources which results in personal and community welfare. This activity is carried out through savings, time deposits and current accounts and other products that use the same concept. Banks have business activities in smoothing payment traffic such as clearing services, transfers, and others based on modern technology to provide maximum convenience and services to the public, so that efforts to improve the country's economy can be accelerated and its benefits can be felt by all people
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