Islamic Corporate Governance Research Articles

Sharia Compliance, Islamic Corporate Governance Dan Fraud Pada Bank Syariah

This study aims to examine the influence of sharia compliance and Islamic Corporate Governance against fraud in Islamic banks. Independent variables used are sharia compliance with the Islamic Income Ratio, Profit Sharing Ratio and Islamic Investment Ratio as a proxy and Islamic Corporate Governance. The dependent variable used is fraud in Islamic banks. The population in this study are all Islamic Banks (BUS) which is registered in Bank Indonesia in the period 2010 to 2014. The sample was selected using purposive sampling method. Total samples used in this study were 8 Islamic Banks with 5-year study period. The analytical method used in this study is multiple regression were processed using SPSS version 22. The results of this study indicate that the sharia compliance with the Profit Sharing Ratio as a proxy, is significant negative effect on Islamic bank’sfraud while Islamic Income Ratio, Islamic Investment Ratio and Islamic Corporate Governance had no effect on fraud in Islamic banks.

The Implementation of Islamic Corporate Governance (ICG) on Sharia Banking in Indonesia

In 2001, a financial institution in Turkey went bankrupt. The financial institution is "Ihlas Finance House". The cause of the bankruptcy of financial institutions according to Islamic finance economists is as a result of weaknesses in the internal and external mechanisms of corporate governance. The purpose of writing this article is to find out how the implementation of Islamic Corporate Governance in Islamic Banking. The method used in this article to answer the research question is a literature study. The results of this study indicate that Islamic banking financial institutions in Indonesia have not fully implemented Islamic Corporate Governance (ICG). The implementation of Islamic Corporate Governance (ICG) that has not been fully implemented is sharia compliance (syari'ah compliance). Sharia compliance in Islamic bank financial products. Conclusion of this article: 1. Implementation of Islamic Corporate Governance (ICG) in Islamic banking is accommodated in the Sharia Banking Law and Bank Indonesia Regulations; 2. Islamic Corporate Government (ICG) can be seen from the establishment of Sharia Supervisory and Sharia Compliance Board in Islamic banking; and 3. Islamic banking in Indonesia does not yet fully implement Islamic Corporate Governance (ICG) in sharia compliance for Islamic financial products.

Islamic Corporate Governance and Islamic Banking Financial Performance

This study aims to examine the effect of Islamic Corporate Governance on the financial performance of Islamic banks in 2012-2016. The Islamic Corporate Governance area is proxied by the board of commissioners size, Audit Committee Size, Sharia Supervisory Board Size, and frequency of Sharia Supervisory Board meetings. The object of research is Islamic banks in 2012-2016. Sampling technique is judgment sampling, members of the population that meet the criteria are used as samples. The entire sample was taken from 10 Islamic banks. Hypothesis testing techniques use multiple regression analysis. The results of the F test show that all independent variables simultaneously influence financial performance. Based on the results of the t test it can be concluded that the frequency of sharia supervisory board meetings and the size of the audit committee positively influences the financial performance of Islamic banks. While the size of the area and the age of the area does not affect the Financial Performance.

Islamic Corporate Governance: The Significance and Functioning of Shari’ah Supervisory Board in Islamic Banking

Islamic Corporate Governance: The Significance and Functioning of Shari’ah Supervisory Board in Islamic Banking

Implementation of Islamic Corporate Governance: A Case Study in BMT NUsantara UMAT MANDIRI Kalidawir Tulungangung

BMT NUsantara UMAT MANDIRI as financial institutions are expected to implement the corporate governance of Islam (Islamic Corporate Governance) that comply with Islamic principles. The implementation of Islamic Corporate Governance can increase consumer trust and confidence. The purposes of this research are to know about Islamic Corporate Governance as Islamic finance institutions and to know the application of Islamic Corporate Governance BMT NUsantara UMAT MANDIRI Kalidawir Tulungagung.

The Role of Company Size on CSR Commitment, the Existence of Female's Board, Managerial Ownership, Board Size to Disclosure of Corporate Social Responsibility in Islamic Banking

Information on disclosure of corporate social responsibility is information on a company's social responsibility to parties outside the company. This disclosure is disclosed in the company's annual report and corporate governance report. The purpose of this study was to analyze the effect of corporate governance and the size of the company on the disclosure of Islamic banking in Indonesia and to analyze the effect of moderating variables on disclosure of corporate social responsibility. The number of datatook in this study was 48 data that had been processed. The data used in this study were the annual Islamic banking reports, financial statements, and corporate governance reports respectively. This test used regression tests and moderating variables. The results obtained that CSR commitment has positive correlation to CSR disclosure and the existence of female's board, managerial ownership has negative correlation to CSR disclosure, meanwhile, board size does not affect the CSR disclosure. After applied the moderation variable, it increased the disclosure of corporate social responsibility.

Pengaruh Corporate Gorvenance Islam terhadap Tax Avoidance

The purpose of the study was to investigate the effect of Islamic corporate governance on <em>tax avoidance</em> of sharia banking in Indonesia. The data that used in this study is scendary data derived from annual financial statements and good corporate governance report of sharia banking in Indonesia during 2013-2017 period. The number of sharia banking that became sample in this study were 8 banks so there 55 research samples. The metohod of analysis that use is multiple regression analysis. The results of this study show that the elements of corporate governance that consist of the board of commissioners, the board of commissioner meeting, the board of sharia, the board of sharia meeting, audit committee, meeting of audit comitte significantly influence the activity of tax avoidance as measured using proxy book tax gap. Other results show that the tax avoidance activity as measured with proxy book tax gap are not affected significantly by the board of commissioner meeting. Limitation of this study is use corporate governance’s proxy separately, so it can’t capture the full effect of corporate governane.

Apa determinan tingkat pengungkapan Islamic Social Reporting bank umum syariah Indonesia?

The inconsistent result of previous studies on the effect of Islamic corporate governance, good corporate governance, profitability, liquidity, and the age of the company may be due to the use of different indicators. This study aims to analyze factors influencing the disclosure index of Islamic Social Reporting (ISR) general Islamic banks for the period of 2014-2017. The research sample was 48 firm-year observations from 12 banks. The statistical tool used to test the hypothesis is using Autoregressive Conditional Heteroskedasticity (ARCH) with the help of Eviews software version 9. The results of this study indicated that the Islamic Corporate Governance and age of the banks are the determinants of the ISR while Good Corporate Governance, Liquidity and profitability variables have no effect on the ISR disclosure.

The Role of Company Size on CSR Commitment, the Existence of Female's Board, Managerial Ownership, Board Size to Disclosure of Corporate Social Responsibility in Islamic Banking

Information on disclosure of corporate social responsibility is information on a company's social responsibility to parties outside the company. This disclosure is disclosed in the company's annual report and corporate governance report. The purpose of this study was to analyze the effect of corporate governance and the size of the company on the disclosure of Islamic banking in Indonesia and to analyze the effect of moderating variables on disclosure of corporate social responsibility. The number of datatook in this study was 48 data that had been processed. The data used in this study were the annual Islamic banking reports, financial statements, and corporate governance reports respectively. This test used regression tests and moderating variables. The results obtained that CSR commitment has positive correlation to CSR disclosure and the existence of female's board, managerial ownership has negative correlation to CSR disclosure, meanwhile, board size does not affect the CSR disclosure. After applied the moderation variable, it increased the disclosure of corporate social responsibility.

Islamic Finance and Corporate Governance: A proposed Universal Model

The purpose of this paper is to systematically synchronise the development of Shari'ah governance in light of the Islamic epistemology. The paper explores governance from the Islamic point of view by referring to various verses from the Holy Qur'an. Also, the paper enumerates the Ps of Islamic governance through shedding light on the teachings of the Holy Qur'an. An in-depth literature review is done to identify the enablers of Shari'ah corporate governance model. Furthermore, interpretative structure modelling (ISM) is applied to propose a Shari'ah governance model for all Islamic countries and countries that follow Islamic banking system. The key variables are identified with the help of MICMAC analysis. The results reveal that there are various conflicting issues that exist among business operations of Islamic financial industry. One of the issues is lacking uniformity regarding considerations related to Halal/Haram transactions. The paper suggests a suitable model for implementing Shari'ah governance and making it globally acceptable.

An Overview of Corporate Governance Models in Financial Institutions

The paper illustrates the models of corporate governance in the aspects of its definition, nature of management and objectives along with its roles, regulation and power of various stakeholders in ensuring the accountability and the protection of the rights of various stakeholders from conventional and Islamic perspectives. These models are different in their characteristics, nature, culture, costume, epistemology, and country’s rules and regulation. However, the conventional models highlight the roles of shareholders, stakeholders, depositors, institutions, investors, and communities from the perspective of the nation’s demand and cultures. In contrast, the Islamic model of corporate governance consists of some roles and responsibilities such as the responsibilities to suppliers, customers, investment account holders, shareholders, management, the board of directors, competitors, Shariah supervisory boards, societies, and the employees from its spiritual and social commitments. Through the critical analysis of these models of corporate governance is deemed to help the empirical research on corporate governance model and develop a certain model of Islamic corporate governance. However, the paper may help to give a simple understanding of the corporate governance models in both the conventional and Islamic perspectives of financial institutions.

The Moderating Effect of Islamic Work Ethics on the Relationship Between Corporate Governance and Performance of Islamic Financial Institutions in Nigeria: A Proposed Framework

Although the important influence of IFIs on economic growth is acknowledged, yet the contribution of Nigeria’s IFIs shows a gross underperformance. In addition, the practice of Islamic Finance is increasingly being viewed as not only serving as alternative for the Muslims but successful business practices around the world. Previous literature reveals that theoretical contributions in the area remained limited in the Nigerian, therefore, there is a need for more studies on corporate governance in the context of IFIs, especially in Nigeria, where IFI are considered as important financial institutions to the Muslims. Moreover, studies in Nigeria revealed absence of comprehensive framework for the Islamic finance industry. On the other hand, poor Islamic Work Ethics conquers a central position for the low performance of Nigerian IFIs. The paper presents a theoretical framework on the moderating effect of Islamic Work Ethics on the relationship between Islamic corporate Governance practices and the performance of Islamic Financial Institutions (IFIs) in Nigeria. If validated, the model would have policy implications to IFIs and other stakeholders in decision making.

Islamic Corporate Governance, Islamicityfinancial Performance Index And Fraudat Islamic Bank

This research empirically tested the factors of fraud occurrence in sharia banks based on fraud triangle theory, which is motivation, opportunity and rationalization must be fulfilled for the occurrence of fraud. This research develops indicators as a proxy of motivation, opportunity and rationalization. Factors tested in this research is the Islamic Corporate Governance to fraud with the Islamicity Financial Performance Index as a mediator in sharia banks 2012-2016.This research using quantitative method with secondary data. Data are obtained from annual reports published by Islamic banks. The test is done by path analysis and processed using SPSS. The result of research shows that Islamic Corporate Governance has no effect to Islamicity Performance Index, Islamic Income Ratio, Profit Sharing Ratio and Islamic Investment Ratio (Islamicity Financial Performance Index) influence to Fraud, Islamic Corporate Governance has no effect to Fraud, and Islamic Income Ratio, Profit Sharing Ratio and Islamic Investment Ratio (Islamicity Financial Performance Index) does not mediate the influence of Islamic Corporate Governance to Fraud on Islamic Bank or it can be said that there is no mediation. This research shows that factors based on fraud triangle are effective for use in explaining fraud.

Analisis Pengaruh Islamic Corporate Governance (ICG) Dan Intellectual Capital (IC) Terhadap Maqashid Syariah Indeks (MSI) Pada Perbankan Syariah Di Indonesia

As an institution based on sharia principles (Islamic banks) certainly has differented characteristics from other companies in its performance orientation. Islamic banking is required to work in accordance with sharia business principles and ethics, one of which is through the implementation of governance (Islamic Corporate Governance/ICG) and the utilization of capital capital (Intellectual Capital/IC) in order to achieve the objectives of establishing Islamic banks in accordance with Islamic maqashid (measured through Maqashid Syariah Index/MSI). The objectives are (1) find out and analyze the effect of Islamic Corporate Governance (ICG) disclosures to maqashid syariah index (MSI) of Indonesian Islamic banking; and (2) knowing and analyzing the influence of Intellectual Capital (IC) to maqashid syariah index (MSI) of Indonesian Islamic banking. The method used content analysis approach for ICG, the iB-VAIC method for IC and Sekaran method on MSI calculations. The sample of Islamic banks was used 11 Islamic Commercial Banks (BUS) from a population of 13 BUS in the period 2013-2017. The sampling method was used purposive sampling. The results showed that both ICG and iB-VAIC had positive and significant effects on MSI. This means that the disclosure of ICG items and IC management will have an impacted on increasing MSI value of Islamic banks. Keywords : Islamic Corporate Governance , Intellectual Capital, Maqashid Syariah Index

The Influence of Islamic Governance on Minimizing Non-Compliance with Sharia

Objective - One of the operational objectives of sharia banks is to comply with sharia principles. Therefore, the non-compliance of sharia banks to sharia law may be prevented by implementing Islamic Good Corporate Governance (GCG), which is controlled by the Sharia Supervisory Board (SSB), the board of directors, and the board of management. Methodology/Technique - In this study, sharia non-compliance is defined as all cases of disobedience found in the report of sharia banks, covering things such as non-halal income, criminal law violations, civil law violations, and fraud. The unit of analysis of this research is sharia banks in Indonesia. Seven sharia banks were used as the study sample for the period between 2012 and 2015. The source of data for this study comprised of GCG annual reports. The data analysis method and hypothesis testing was conducted using a factor analysis and multiple regression analysis. Findings - The findings show that higher levels of supervision from the SSB tend to minimize the instanc of sharia non-compliance as a whole, criminal and civil law violations, and fraud, although not to a level that is statistically significant. The influence of the board of management on non-halal income was negative, although statistically insignificant. The influence of the supervision from both the board of directors and the board of management on overall sharia non-compliance is also not statistically significant. Novelty - The influence of the board of management on non-halal income was negative, although statistically insignificant. The influence of the supervision from both the board of directors and the board of management on overall sharia non-compliance is also not statistically significant. Type of Paper: Empirical Keywords: Sharia Non-compliance; Islamic Bank; Islamic GCG; Sharia Supervisory Board; Board of Directors; Board of Management. JEL Classification: M10, M14, M19.

PENGARUH MEKANISME ISLAMIC CORPORATE GOVERNANCE TERHADAP KINERJA BANK SYARIAH DI INDONESIA BERDASARKAN MAQASHID SYARIAH INDEKS

To be able to realize the business goals and social objectives of Islamic banks need to be supported by Islamic corporate governance mechanisms that protect the rights and interests of all stakeholders who are subject to the rules of sharia. The purpose of this study was to determine the effect of Islamic corporate governance mechanism variables on the performance of Islamic banks in Indonesia based on the maqashid sharia index. The results showed that the number and education of the Sharia Supervisory Board had a significant effect. While concurrent positions and meetings of the Sharia Supervisory Board have no significant effect on the performance of Islamic banks in Indonesia based on the maqashid sharia index.

Islamic Corporate Governance and Islamic Social Responsibility Towards Maqashid Shariah

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Recent developments on Islamic corporate governance (ICG)

Recent developments on Islamic corporate governance (ICG)

Islamic Corporate Governance In Islamic Financial Institutions

From the previous literature, Islamic corporate governance is not something new and was brought into attention by Prophet Muhammad S.A.W., and mentioned in Al-Qur’an and AlSunnah. It is rife with principles concerning Tawhid, freedom, and responsibility, as well as Taqwa to Allah S.W.T. Islamic banks is one of the category in IFIs that has been identified to face a greater challenge in corporate governance such as fraud, corruption, financial distress, poor supervision, poor leadership and other conflicts. As stated by Hassan (2012), all these cases show that the IFIs are not immune from the crisis and failures due to governance issues and conundrums. Therefore, the main focus of this study is to meliorate the present of corporate governance principles in Islamic Financial Institutions (IFIs) Malaysia stemming from the concept of corporate governance of IFIs based on Al-Quran, Al-Sunnah and Maslahah (Maqasid Al-Sharia’) which align with the Islamic values. Thus, this research has applied qualitative as research design using case study approach to review the current principles of corporate governance in IFIs.

The new paradigm of Islamic corporate governance

PurposeThe purpose of this paper is to examine the new paradigm of Islamic corporate governance (ICG) in an emerging area of Islamic finance.Design/methodology/approachThe paper adopts an analytical approach to investigate the new executive and managerial roles that ICG is expected to play in the process of corporate financial decision making.FindingsThe authors argue that ICG is no longer expected to play the traditional supervisory and regulatory role within Islamic financial institutions. Indeed, the acuteness of competition, the observed failures of the Islamic finance industry, the unprecedented challenges, and the required ethical considerations levy as a new approach that improve the growth of the Islamic finance industry sustain its survival in the global financial world, and enhance the welfare of 25 percent of the world population who survived beyond all level of poverties.Originality/valueThe authors claim that ICG must be endowed with a multi-faceted, new paradigm for the purpose of improving the stakeholders’ interests and reaching the best business practices of the Islamic finance industry to cater investors’ need and the social well-being of the homeless and disadvantaged communities.