Corporate Governance In Islamic Banks Research Articles

Corporate governance and Islamic social reporting: Indonesia Islamic banking development roadmap era

This research examines the corporate governance effect on Islamic Social Reporting (ISR). This research was conducted in 2015-2022, used the ISR codification, collected from the annual reports of ten Indonesian Islamic banks, and applied the Stakeholder Theory approach which has never been done previously. The research results show that Board of Commissioners’ meetings, Audit Committee meetings, and Sharia Supervisory Board meetings significantly and positively affect ISR. These findings imply that supervision through the meetings of the Board of Commissioners, Audit Committees, and Sharia Supervisory Board plays a role in detecting ISR. Corporate governance in Islamic banks continuously seeks to maintain sustainability in Islamic banks, including the support for stakeholders. ISR is a form of Islamic bank accountability to show that Islamic banks always prioritize their stakeholders, including the support for the Indonesia Islamic banking development roadmap prepared by the Financial Services Authority.

Urgensi Pelaksanaan Islamic Corporate Governance (Suatu Kajian Studi Literatur Pada Lembaga Keuangan Syariah)

Basically, companies and Islamic financial institutions are required to apply the principles of good governance. However, fraud in companies and institutions often occurs and cannot be avoided. In practice, Islamic banks still use the same principles as conventional institutions. This research is a literature study on the implementation of Islamic Corporate Governance in Islamic Financial Institutions, so that it can be seen what discussion has been researched and what discussion needs to be researched. This study uses a qualitative approach. There are 9 articles published in 2018 to 2022 which are grouped into three topics of discussion, namely: 1) Implementation of Islamic Corporate Governance in Islamic Banks, 2) Implementation of Islamic Corporate Governance in Non-Bank Institutions and 3) Implementation of Islamic Corporate Governance associated with Islamic Social Responsibility . Implementation of Islamic Corporate Governance in Islamic Banks is the most articles with a presentation of 44.4%. While the least discussed article is the Implementation of Islamic Corporate Governance associated with Islamic Social Responsibility, with a presentation of 22.2% of the overall theme of the Urgency of Implementing Islamic Corporate Governance in Islamic Financial Institutions. Discussions that need to be examined, such as: Islamic Corporate Governance principles that are in accordance with sharia and different from Corporate Governance principles in general are implemented in conventional institutions

The Measurement Of Good Corporate Governance In Islamic Banking And Its Effect On Financial Performance (Empirical Study Of Islamic Commercial Banks In Indonesia)

This research aims to measure the quality of Good Corporate Governance (GCG) in Islamic Banking and examine its effect on financial performance. The independent variables examined include GCG Index, Board of Commissioner (BOC), Audit Committee (AC), Sharia Supervisory Board (SSB), Gender Diversity of BOC and SSB. The dependent variable includes financial performance determined by Return on Assets (ROA). This research uses samples of 11 Islamic Commercial Banks period of 2015-2019. They were selected using judgement sampling method. The data analysis method used panel data regression analysis with Fixed Effect estimation model. The result revealed that the GCG quality of Islamic Commercial Banks in Indonesia adheres to 90% of the indicator used in the GCG Index. Despite that, the GCG Index found no significant effect on financial performance. Moreover, the Good Corporate Governance implication in Board of Commissioner, Audit Committee, Sharia Supervisory Board and Gender Diversity also found no significant effect on Islamic banking’s financial performance.

Trend of the Research on Islamic Corporate Governance in Islamic Banking: A Bibliometric Analysis

Objective: Islamic Corporate Governance in Islamic Banking companies is a topic that is still poorly studied, and this study aims to test research trends regarding Islamic corporate governance in Islamic banking. Methodology: This research is presented in literature by combining bibliometric (quantitative research) and in the form of content (KualiTatif Research) analysis using 1040 Scopus articles, using several indicators of Islamic corporate governance in Islamic banking. Result: The results of this study show a shift in the total number of publications regarding indicators of Islamic corporate governance in Islamic banking from 2017 to 2023. However, there are publications that have not increased from 2018-2022 due to the declining number of publications. The highest level of publication was in 2014, when the visualization was determined by the co occurance network by title and abstracts, with a minimum provision of 10 sentences from research related to Islamic corporate governance. In the diagram that appears in vosviewer shows that there are several sentence indicators that appear related to Islamic Banking including, corporate governance, Islamic economy, stability, trust, religiousity, brand role clarity, Islamic banking performance, personal financing and Islamic interbank benchmark and other determining indicators. Conclusion: However, researchers find it difficult to trace islamic corporate governance indicators in analyzing bibliometrics in this study.

The Effects of Internal Governance Factors on Lending Portfolio Composition in Islamic Banks

Recent studies indicate that lending portfoliocomposition in Islamic banks is concentrated towardsdebt-based lending portfolio; however, the ideal lending portfoliocomposition in Islamic banks should be an equity-based lending portfolio. This article explores the effects of the internal governance factors on lending portfolio compositionofIslamic banks in the GCC Region. The internal governance factors investigated are board of directors’ characteristics (size and independence), Shariah supervisory board attributes (size and cross-membership), and ownership structure (family and government). The generalized least squares (GLS) method is used to examine the relationship between the study variables. The results indicate that two characteristics of the board of directors, size and independence, and two attributes of the Shariah supervisory board, Shariah board size and Shariah board cross-membership, have significant effects on lending portfolio composition of Islamic banks in the GCC Region. However, the rest of the internal governance factors have no effects on lending portfolio composition of Islamic banks in the GCC Region. These significant results add new contributions to the literature in the area of internal corporate governance of Islamic banks. The article concludes with suggestions for regulators and policy makers in the GCC Region with regard to the ideal characteristics of the board of directors and the optimal attributes of the Shariah supervisory board in Islamic banks as well as directions for future studies in this area of research.

The Effect of Corporate Governance in Islamic Banking on the Agility of Iraqi Banks

The primary purpose of the research is to investigate the effect of the quality of corporate governance in Islamic banking on the agility of Iraqi banks. For this purpose, the structural-equation-modeling (SEM) method was used to investigate the effect of independent variables on the dependent variable. The statistical population of this study is all managers, employees, and customers of the public and private banks of Iraq, and a total of 70 questionnaires were included and analyzed to test the paper’s hypotheses. The research results indicate that corporate governance in Islamic banking has a positive impact on the agility of Iraqi banks, meaning that with an increase in corporate-governance mechanisms in Iraqi Islamic banking, the capability of banks to make timely reactions to potential changes is likely to increase. In this regard, the provision of various services in a flexible and snap manner to a wide range of customers, the acceptance of innovation and IT-related processes, the identification and application of environmental opportunities, and having a culture of learning and cooperating are expected to be realized by improving the quality of corporate-governance mechanisms. Our findings may apply to policymakers to improve market efficiency through designing regulations and bank managers to increase their general performance. The current paper is among the initial attempts to determine the influential factors on bank agility in emerging markets.

The Effect of Corporate Governance in Islamic Banking on the Agility of Iraqi Banks

The primary purpose of the research is to investigate the impact of corporate governance in Islamic banking on the agility of Iraqi banks. In other words, the current study seeks to find an answer to the question of whether corporate governance in Islamic banking can affect the agility and speed of change of banks in the face of problems in Iraq or not. For this purpose, the research method is applied based on the goal and descriptive survey based on the method. The statistical population of this study is all managers, employees and customers of the public and private banks of Iraq, and a total of 70 questionnaires have been completed and analyzed. The sampling method of the research is non-random, and the available population has been selected as the sample size. In this research, PLS tests have been used to investigate the effect of independent variables on the dependent variable. The research results indicate that corporate governance in Islamic banking has had a positive effect on the agility of Iraqi banks, meaning that with the increase of corporate governance mechanisms in Iraqi Islamic banking, the rate of change of banks (agility of banks) has been facing more problems.

Sharia and Corporate Governance of Islamic Banks

Seen as an essential element of economic development, corporate governance has been at the center of the debate since the 1990s. Its crucial interest for the good functioning of financial markets is strongly mentioned. Over the last two decades, the motivations for opting for good corporate governance have been diverse and varied: the Cadbury report, the OECD reports, the reflections of the Basel Committee, the adoption of the Sarbanes-Oxley Act (or SOX) in 2002 in the United States, the work on "corporate social responsibility". Indeed, governance is one of the main elements to be established in an institution because it is supposed to guarantee and promote the principles of equity, transparency and responsibility in the Islamic banking sector. Unlike the conventional banking approach, the vision of the Islamic banking sector is both: performance and sharia compliance. In fact, Islamic banking institutions are faced with several dilemmas, namely Investment account holders (IAH) are subject to the same risks as shareholders, but do not have the same governance rights as shareholders. Furthermore, an analysis of the measures proposed by the IFSB to remedy this situation concludes that the degree required to protect the interests of IAHs has not yet been achieved, to the detriment of all the recommendations and practices put in place. The purpose of this paper is to highlight, on the one hand, the specificity of corporate governance from an Islamic perspective as system in which an Islamic bank is run by Shariah directors and board. This is what the researchers called "dual governance".

Sharia and Corporate Governance of Islamic Banks

Sharia and Corporate Governance of Islamic Banks

Corporate governance of Islamic banks: a sustainable model to protect the participatory depositor?

The religious principles that characterize the Islamic bank have direct consequences on the models of Corporate Governance which, at the same time, must be in accordance with national and international regulations and best practices. The aim of this paper is to analyze the role of the participatory depositor in the Corporate Governance Models of the Islamic Bank, a special category of stakeholder that entrusts their savings to the Islamic Bank on the basis of the Profit and Loss Sharing principle. In the present study the models of Corporate Governance of the Islamic Bank, with regard to the protection of the interests of the participatory depositor, are analyzed through a comparative analysis of the regulations of the following Countries, Malaysia and Morocco. The objective is to highlight the strengths and weaknesses of the protection of the interests of affected stakeholders in order to verify the presence of a sustainable model of Corporate Governance, namely if the participatory depositor needs more guarantees than other categories of stakeholders.

The Impact of Islamic Banking Corporate Governance on Green Banking

The primary purpose of the research is to investigate the impact of Islamic banking corporate governance on green banking in Iraq. In other words, the current study seeks to find an answer to whether corporate governance in Islamic banking can affect green banking in Iraq. For this purpose, the research method is applied based on the objective and descriptive survey. The statistical population of this research is all the managers, employees, and customers of the public and private banks of Iraq, and a total of 70 questionnaires have been completed and analyzed. The sampling method is non-random, and the available population was selected as the sample size. In this research, PLS tests have been used to investigate the effect of independent variables on the dependent variable. The results indicate that corporate governance in Islamic banking has had a positive effect on green banking, meaning that the increase of corporate governance mechanisms in Iraqi Islamic banking increase the level of attention of Iraqi Islamic banks to green banking matters. The current research was conducted in Iraq’s developing or emerging financial markets, which are highly competitive and under insufficient supervision.

THE EFFECT OF CORPORATE GOVERNANCE ON FINANCIAL PERFORMANCE: CORPORATE SOCIAL RESPONSIBILITY AS A BUFFER

This study aims to demonstrate the role of CSR in moderating the influence of corporate governance on financial performance. Furthermore, the researchers compared the corporate governance of Islamic banks in Indonesia and Malaysia. Data analysis used Moderate Regression Analysis and independent t-test analysis. The research data is the financial statements of each Islamic bank in Indonesia and Malaysia from 201 to 2020. This study shows that CSR cannot moderate the financial performance of Indonesian and Malaysian Islamic companies. Another result states that there is no difference in the implementation of corporate governance in Indonesian and Malaysian Islamic banks. CSR is becoming an important aspect of the business community. But does not support the company's financial performance. Nevertheless, this remains a common concern because of the importance of natural sustainability and a balanced economy.

ANALISIS GOOD CORPORATE GOVERNANCE PADA BANK SYARIAH

The principles of Good Corporate Governance (GCG) is important in Islamic banking. Agency problems in Islamic financial institutions are unique from other financial institutions. The different types of operations and contracts in Islamic banks resulted in widening the separation and control issue that is located under the theory of Agency. Managers at bank syariah not only maximize the shareholder made but also have an obligation to work under Islamic rules and regulations. The other issue is about ownership of shares and double post of Commissioner on the company itself or at other companies. It violates the principles of GCG that is the independence of the Board of Commissioners. The Board of Commissioners in some Islamic banks in Indonesia allegedly still has a stake and a duplicate position. Therefore, based on those explanations, it is quite important to conduct this study on the implementation of GCG in Islamic banking in Indonesia. This samples of this study are all Syariah Bank in Indonesia which have been listed in the Indonesia stock exchange, numbered 10 Islamic banks. This study aims to analyze the corporate governance in Islamic banking in Indonesia especially on the independence of the Board of Commissioners. The benefit of this research is to investigate the practices of corporate governance especially the independence of the Board of ommissioners in terms of share ownership and concurrent positions on Islamic banks in Indonesia. Moreover, based on the data analysis, it was found that the Board of Commissioners on ten syariah banks in Indonesia has a stake in the company or other companies and/or have a concurrent positions at another company, the Board of Commissioners on one Islamic bank has no shares in the company or other companies and/ or have a concurrent positions on other companies, and one Islamic bank has a stake in the company or other companies and po ssess a concurrent positions on other companies. In conclusion, this proves that the majority of the Board of Commissioners on Syariah Bank in Indonesia as not been independent.

How diverse are Shariah supervisory boards of Islamic banks? A global empirical survey

PurposeThis study aims to examine diversity in the composition of Shariah supervisory boards (SSBs) of Islamic banks (IBs). It investigates diversity from two perspectives: existing composition of SSBs and the regulatory frameworks and standards of selected Organisation of Islamic Cooperation countries. Diversity characteristics include education, nationality, gender and age.Design/methodology/approachA list of all full-fledged Islamic commercial banks (FFICBs) globally has been carefully prepared and confirmed. Conventional banks with Islamic windows, non-commercial banks, takaful companies and other Islamic financial institutions are excluded. The available profiles of 428 SSB members have been scrutinised and analysed. These board members occupy 522 SSB positions in 238 FFICBs operating in 52 countries around the globe. From the regulatory perspective, 12 national and international Shariah governance frameworks and standards have been examined.FindingsFindings of this paper indicate various levels of diversity in SSBs of the reviewed IBs. The level of diversity in educational background and in the nationality of SSBs can be described as generally acceptable. However, a lack of diversity in gender and age among SSB members is evidently observed in IBs. While the lack of age diversity in SSBs may be relatively justified as a common trend in the composition of corporate boards, SSBs of IBs are seriously lagging behind in gender diversity. On the regulatory level, this study concluded that provisions on diversity as a requirement in SSBs are almost non-existent in the existing regulatory frameworks and standards.Research limitations/implicationsThe major limitation of this study is the lack of available information on the SSB members.Practical implicationsThis paper provides insights for IBs and policymakers concerned with the corporate governance of IBs and all Islamic financial institutions. First, it offers an excellent bird’s-eye view of the status of diversity in SSBs of IBs. Second, it motivates policymakers and standard-setting bodies to ensure, through the relevant regulatory frameworks, adequate levels of diversity in the composition of SSBs. Diversity in SSBs of IBs and Islamic financial institutions should be given special emphasis, not only in boards and top management positions but also in the workplace. This is of profound significance to the reputation of Islamic finance industry which has been recently under mounting pressure to translate the rhetoric about the Islamic finance industry being ethical, fair, just, equitable and inclusive into genuine implementations.Originality/valueTo the best of the authors’ knowledge, this study is the first of its kind to examine the diversity of SSB members from the regulatory as well as from the implementation perspective.

Accounting Conservatism in the Perspective of Positive Accounting Theory: A Study of Islamic Banking in Indonesia

Conservative accounting in Islamic banking is a crucial issue. This research aims to analyze the influence of executive compensation, the debt covenant, political cost, the composition of the commissioner board, the audit committee, and operating cash flow on the principle of accounting conservatism practiced in Islamic banking in Indonesia. Using data for 13 Islamic banks from 2014 to 2018 and employing panel regression, this study revealed that debt covenant, political cost, and operating cash flow significantly influence accounting conservatism. This result reconfirms the Positive Accounting Theory and Free Cash Flow Theory. However, the other three factors, i.e., executive compensation, the composition of the board of commissioners, and the audit committee were found to have no impact on accounting conservatism. From the findings, the study recommends that policy makers should improve the practice of good corporate governance in Islamic banking, thus the issue of conservative accounting methods could be minimized.

Risk management and corporate governance of Islamic banks: evidence from GCC countries

PurposeThe purpose of this study is to identify the effectiveness of risk management and corporate governance (CG) practices followed in Islamic banks (IBs) of Gulf Cooperation Council (GCC) countries. Hence, they are considered as critical performance indicators for financial institutions and IBs. Though the IBs are growing, there are still challenges associated with their operations because of Shariah noncompliance risks, governance, capital adequacy ratio and other risks.Design/methodology/approachThis study uses a mixed-method approach, gathering qualitative data from senior risk managers of chosen IBs via semi-structured interviews and quantitative data from selected IBs financial reports using capital IQ resources. The information was gathered for a considerable time (2013–2019), and the CAMELS rating system was used to analyze it.FindingsThe results showed that GCC IBs manage their business risks well through effective CG except in certain areas like asset quality management and liquidity.Practical implicationsThe result of this study can provide support to the banks’ top management, chief executives, regulators and government, in all practices related to risk assessment, management and mitigation.Originality/valueThis study contributes to the existing knowledge in risk management and CG practices. Furthermore, this study is a new attempt in knowing the risk management and CG practices followed in IBs in GCC countries using the mixed-method approach.

Good Corporate Governance in Islamic Banking during Fourth Industrial Revolution Era

The purpose of this study is to analyze information about implementation of Corporate Governance in Islamic banking. This study uses a quantitative approach with a systematic literature review method from various journals. With the systematic literature review method, the authors identify all empirical evidence, where the identification aims to answer questions such as "How is the implementation of Good Corporate Governance (GCG) in Indonesian Islamic banking?", "What is the role of the Shariah Supervisory Board?", "What is the impact of implementing GCG?". The results of the analysis found that the implementation of GCG in Islamic banking was quite good but still not effective. This is because the governance mechanism is still not fully in accordance with Shariah principles. Therefore, the role of DPS in the implementation of GCG is very important and must be optimized. This finding also opens information about the development of GCG in Islamic banking today so that it can be used as reference material for further research.

Analisis Kualitas Penerapan Good Corporate Governace pada Bank Sulselbar Cabang Syariah Makassar

Good Corporate Governance in Islamic banking is considered important because Islamic banking is currently showing a fairly rapid development. It is necessary to emphasize how the real governance that must be applied by Islamic banking is. This is very important, because Islamic banking is philosophically and substantially different from conventional banking. This study aims to find out about the quality of the implementation of Good Corporate Governance at Bank Sulselbar Syariah Makassar Branch. This study uses qualitative methods and uses data analysis techniques with a critical alternative perspective. Data collection techniques used are interviews and documentation. The results showed that the Good Corporate Governance of Bank Sulselbar Syariah Makassar Branch, although in good quality, still showed some weaknesses that still needed to be improved.

Implementation of GCG (Good Corporate Governance) on the Prevention of Fraud Financing in Islamic Banks

Although Islamic Banking operates with Islamic principles, there are still many frauds that are committed deliberately for particular cases. This study aims to determine the extent of the influence of Good Corporate Governance in Islamic banking on indications of fraud, especially at Bank BNI Syariah. This research is quantitative research with primary and secondary data, namely using a sample questionnaire and interviews. While the data analysis is using multiple regression with descriptive analysis. The results of the study concluded that the resulting regression had a very small R square at 34.7%. Finding. The results of the t-test show that partially the independent variables in GCG, namely information disclosure, accountability, responsibility, independence, fairness, are stated to not affect the financing of fraud. This is because the number of R squares has a small effect. After all, it is below 50% so that the impact on the insignificance of the variables in GCG on fraud financing. Therefore, it results from the t-test in which none of the X variables affect variable Y. From the information above, it can be concluded that the GCG variable simultaneously has a significant effect on financing fraud, but if tested partially, the GCG variable has no effect on financing fraud.

ISLAMIC BANKING PERFORMANCE MEASUREMENT: A CONCEPTUAL REVIEW OF TWO DECADES

This article aims to provide an overview of the development of research on the measurement of Islamic banking performance over the past 20 years from 89 selected papers with Scopus-indexed journals ranked Q4 to Q1 or accredited with Sinta 2 to Sinta 1. This study used a qual-quantitative meta-analysis approach using the Mendeley citation application. The distribution of the topic and the depth of research in paper samples based on keywords in publications were analyzed using the VOSviewer application. The results of the analysis showed that the research trend of Islamic banking performance in reputable journals is increasing in recent years. Most of the studies performed in the last two decades have focused on the practice and corporate governance of Islamic banks and comparisons between Islamic and conventional banks based on financial performance ratios and aspect of maqasid al-Shariah; Only a few studies that discuss efficiency, social performance on Islamic banks, regulation, intellectual capital and stability of the financial performance of Islamic banks were found. The further discussion is an empirical exposure without theoretical exploration or analysis which is supposed to become the direction of banking research in the future.
 JEL Classification Codes: G21, L25, P17, P47.