THE IMPLEMENTATION OF CORPORATE GOVERNANCE IN ISLAMIC BANKING IN INDONESIA BASED ON AAOIFI STANDARD

Rahma Yudi Astuti

doi:10.26623/slsi.v19i1.2995

Abstract

<p>This study aims to analyze the implementation of Corporate Governance in Islamic banking in Indonesia and the implementation of Corporate Governance in Islamic banking in Indonesia according to the standards of Corporate Governance by AAOIFI. This study used secondary data obtained from the annual report of Good Corporate Governance of Sharia Commercial Bank which has been published in 2019. The method used in this study is qualitative with the type of research is content analysis from the annual Good Corporate Governance report of Islamic bank in Indonesia. The results of this study indicate that the implementation of Corporate Governance at Sharia Commercial Banks in general have done good corporate governance which is marked with the result of self-assessment of every Sharia Commercial Bank which on average gets a good predicate. The results of research on the implementation of AAOIFI standards of Corporate Governance in general have applied some of the AAOIFI standards, but there is one standard AAOIFI that has not been applied by Sharia Commercial Banks other than Bank Muamalat. The standard that has not been applied is Internal Sharia Reviews which should be established in the policy.</p><strong>Keywords: Islamic Banking, Corporate Governance, AAOIFI</strong>

Highlights

That the growth and development of Islamic banking are so rapidly lately markedby the increasing number of Islamic banking services network and the increasing diverse products leading to the implementation of Good Corporate Governance (GCG) in Islamic banking is becoming increasingly important.1Good Corporate Governance (GCG) that serves to anticipate various risks, both financial risk and reputation, is an important pillar that must be applied to create a Islamic bank that is superior and resilient
This study aims to determine the extent of the implementation of corporate governance standards issued by Auditing Organization for Islamic Financial Institutions (AAOIFI) at Sharia Commercial Bank in Indonesia on Good Corporate Governance Report issued every year
Type of research used in this research is content analysis, which aims to find out the implementation of Corporate Governance in Islamic banking in Indonesia in terms of AAOIFI's Corporate Governance standard through the analysis of the annual Good Corporate Governance report of Islamic banking in Indonesia.The author used content analysis because the data to be researched requires descriptive explanation.17Content analysis is a systematic technique for analyzing the content of messages and processing messages, or a tool for observing and analyzing the contents of open communication behavior of selected communicators

Summary

INTRODUCTION

That the growth and development of Islamic banking are so rapidly lately markedby the increasing number of Islamic banking services network and the increasing diverse products leading to the implementation of Good Corporate Governance (GCG) in Islamic banking is becoming increasingly important.1Good Corporate Governance (GCG) that serves to anticipate various risks, both financial risk and reputation, is an important pillar that must be applied to create a Islamic bank that is superior and resilient. The direction of development and regulation of Islamic banking is to ensure compliance with sharia principles in its operations by implementing fatwas issued by Dewan Syariah Nasional (DSN)&Majelis Ulama Indonesia(MUI).3The international standards are established to realize Islamic Financial Institutions (IFI) which is totally fair, professional, and in accordance with sharia standard / principle. The author examines whether the existing Islamic banking in Indonesia has implemented the standards of Corporate Governance issued by AAOIFI. This research is importantdue to the lack of research in Indonesia which examines the implementation of Corporate Governance based on AAOIFI standards. It supports the practice of corporate governance in implementation of Islamic banking in accordance with the principles of sharia

LITERATURE REVIEW

Islamic Business Unit

Rural Islamic Bank

AND DISCUSSION

Ranked 5

CONCLUSION