Sharia Supervisory Board Research Articles

Does bank governance affect risk and efficiency? Evidence from Islamic banks in GCC countries

PurposeThe motivation of the study is to shed further light on the question of whether the governance structure of Islamic banks (IBs) has an impact on the efficiency and risk of Islamic banks operating in the Gulf Cooperation Council (GCC) after the global financial crisis and during the period 2010–2018. This study aims to examine the extent of governance structure on the efficiency and risk of IBs as the effect of the financial crisis has been less on IBs. In addition, the authors are interested in the GCC region as it represents the hub of Islamic finance.Design/methodology/approachIn this study, the authors examine how the banking governance structure affects the risk-taking and performance of IBs in the GCC countries between 2010 and 2018. The authors construct a banking governance index (CGI) composed of sub-indices for the board structure, risk management, transparency and disclosure, audit committee, Sharia supervisory board and investment account holders. Unlike the majority of previous studies, bank performance is measured with technical efficiency scores using a data envelopment analysis and the authors use a comprehensive CGI.FindingsThe results show that IBs in GCC countries adhere to 54% of the attributes covered in the CGI. The authors also note a lack of disclosure regarding the investment account holders and the audit committee. As well, the results indicate that bank governance is positively associated with risk-taking and bank efficiency. Banking risk is influenced by the Sharia board and risk management while bank efficiency is affected by the characteristics of the board structure and investment account holders.Originality/valueTo the best of the authors’ knowledge, this is the first study that has developed a comprehensive governance index for IBs in GCC countries that includes a wide range of governance dimensions. The study contributes to the literature on governance in the banking sector by simultaneously examining its impact on the risk-taking and efficiency of IBs and recognizes the dynamic relation between these three variables for IB.

Pengaruh Islamic Corporate Governance Terhadap Tax Avoidance Pada Bank Umum Syariah Di Indonesia

This research aimed to examine wether Islamic Corporate Governance proxied by the Sharia Supervisory Board, audit committee, proportion board of commissioners, profitabilitas and company size is able to minimize the tax avoidance of Islamic Banks in Indonesia. The sample of Islamic banks was used 11 Islamic Commercial Banks in the period 2015-2019. The sample was selected using a purposive sampling method. Multiple regression analysis is employed to test the hypotheses The results of this study show that sharia supervisory board, audit committee and proportion board of commissioner have a negative affect on tax avoidance, while profitability and company size have a possitive affect on tax avoidance.

Pengaruh Islamic Corporate Governance Terhadap Tax Avoidance Pada Bank Umum Syariah Di Indonesia

This research aimed to examine wether Islamic Corporate Governance proxied by the Sharia Supervisory Board, audit committee, proportion board of commissioners, profitabilitas and company size is able to minimize the tax avoidance of Islamic Banks in Indonesia. The sample of Islamic banks was used 11 Islamic Commercial Banks in the period 2015-2019. The sample was selected using a purposive sampling method. Multiple regression analysis is employed to test the hypotheses The results of this study show that sharia supervisory board, audit committee and proportion board of commissioner have a negative affect on tax avoidance, while profitability and company size have a possitive affect on tax avoidance.

The effect of profitability, size and Shariah supervisory board of an Indonesian Islamic bank on the Islamic social reporting disclosure

This paper analyzes the effect of profitability and size of Indonesian Islamic banks on the level of Islamic Social Reporting (ISR) disclosure. This study also investigates the role played by the Sharia Supervisory Board (SSB) in the effect of profitability and size of an Islamic bank on ISR disclosure. The presence of SSB is very important in the operations of Islamic banks. SSB should be involved in important company decisions, including the ISR disclosure. The study covers all 14 Indonesian Islamic commercial banks as a population; the analysis will be conducted based on annual reports of the banks’ divisions for the period 2014–2018. A documentation technique was used to collect the data. Moderated Regression Analysis (MRA) was used for data analysis. The results show that the adjusted R-squared coefficient of the equation is 0.341. R-squared contributions of ROA, ROE, size, and SSB are –0.093, 0.010, 0.983, and –0.081. Other results show that profitability (ROA) and size (total assets) significantly affect the level of ISR disclosure among Indonesian Islamic banks. However, the results were indifferent regarding the role of SSB. There is no significant effect of SSB on ISR disclosure. SSB was important for moderating the relationship between profitability (ROA and ROE) and bank size and ISR disclosure level. SSB’s involvement in the decision making of Islamic banks will have a positive effect on the activities of Islamic banks. Islamic banks will tend to have a high level of ISR. Further researchers can develop SSB measurements for more accurate results.

The Role of Islamic Corporate Governance and Risk Toward Islamic Banking Performance: Evidence from Indonesia

Research aims: This study aims to analyze the role of Islamic corporate governance mechanisms on the performance of Islamic banks. Besides, it also analyzes the effect of risk profiles, especially those that are directly related to bank financing, on the performance of Islamic Banks.Design/Methodology/Approach: Sharia banks that become the objects are Sharia Commercial Banks (SCB) and Sharia Business Units of Conventional Banks (SBU). This study uses data from 20 sharia banks (11 SCB and 9 SBU). The analytical tool used in this study is panel data regression.Research findings: The results show that the meeting frequency of the Board of Commissioners, Sharia Supervisory Board (SSB), Financing to Deposits Ratio (FDR), and bank size have a significant positive effect on the performance of Islamic banks. Non-Performing Financing (NPF) has a significant negative effect on the performance of Islamic banks.Theoretical contribution/Originality: This study utilized Stakeholders theory, Maqoshid Sharia concept, and corporate governance to investigate the role of Islamic corporate governance mechanisms and risk management on sharia Banks performance.Practitioner/Policy implication: The implication of this study is that SSB activities had a direct and robust influence on Islamic Banks, which have relatively larger assets. Hence, the task of the Sharia Supervisory Board should not be limited to only monitoring the conformity of transactions with sharia but also providing input so that banks can increase their profits in line with sharia.Research limitation/Implication: The limitation in this study is the number of corporate governance variables that was limited.

PENGARUH DEWAN PENGAWAS SYARIAH DAN KOMITE AUDIT TERHADAP KINERJA PERBANKAN SYARIAH (STUDI PADA BANK NTB SYARIAH)

This research discusses the influence of the Sharia Supervisory Board (DPS) and the Audit Committee on the performance of Islamic banking in a case study at Bank NTB Syariah. This research is a descriptive study using multiple regression analysis method and processed using SPSS version 16. Based on the results of the study it was concluded that partially the Sharia Supervisory Board (X1) had a significant influence on Islamic banking performance with a significance value of 0.05. Meanwhile, the Audit Committee (X2) has no significant effect on the performance of Islamic banking. Meanwhile, the Sharia Supervisory Board (X1) and the Audit Committee (X2) simultaneously have a significant relationship with Islamic banking performance.

Characteristics of the Sharia Supervisory Board, Sharia Company Size, Zakah, and Islamic Social Reporting on Sharia Banks in Indonesia

This study aims to determine the effect of the characteristics of the Sharia Supervisory Board as proxied by the size of the sharia supervisory board, concurrent positions of the sharia supervisory board, sharia supervisory board meetings, company size, and Zakah on Islamic Social Reporting. Employing quantitative method, this study used panel data of Islamic commercial banks in Indonesia from 2015 to 2019. The data were analyzed using multiple linear regression by employing EViews 9 softwere. The result found that the variable of the size of the sharia supervisory board, concurrent positions of the sharia supervisory board, and the company size have a significant positive effect on Islamic Social Reporting. Meanwhile, sharia supervisory board meetings and Zakah have no effect on Islamic Social Reporting. The results of this study contribute to enriching the discourse of Islamic social reporting of sharia commercial banks in Indonesia, especially in terms of zakah and sharia supervisory characteristics.

Multi Gender Diversity and Earnings Quality in Islamic Banks: The Moderating Role of IFRS’ Adoption and Culture

Purpose – This paper firstly measure the impact of Board of Directors (BOD); audit committee (AC) and Sharia Supervisory Board (SSB) composition (gender diversity) on earningsquality (EQ) in the Islamic banks (IBs). Secondly, we measure to what extent adoption of IFRS and national culture, which is proxies by Femininity can, moderates the relationship between diversity and EQ. Design/methodology/approach – Hypotheses are tested using pooled OLS-regression models. Our sample comprises 122 IBs across 21 different countries from 2010 to 2017. Our sample include 46 IBs adopter of IFRS and 76 IBs that non-adopter of IFRS as local or Islamic standards. Findings – Evidence reveals that gender diversity in BOD, AC, and SSB is positively associated with EQ activities. Further, adoption IFRS standards by IBs significantly moderate the positive link between board diversity and EQ while shows significantly moderate the negative association between board diversity and EQ for banks that are non-adopter of IFRS. Concerned with the impact of culture; we find that culture dimension of femininity serve as informal institutional forces that influence the association between diversity and EQ. Some results hold and others altered after a number of robustness checks. Originality/value – This study is unique in providing IBs evidence for the moderating effect of accounting standards' adoption and culture on the link between the demographic features of BOD, AC and SSB members and firm outcome. The present study provides a new and far-reaching contribution into the debate about EQ in the context of ethical institutions as IBs as well as contribution into the debate about role of women in board in the context on countries characterized by masculinity community as MENA region or across Muslim countries. Practical implications – The findings have important implications for policymakers, regulators, and investors in their attempts to enhance EQ practices and improve financial reporting quality for IBs.

An Investigation on Sharia Governance in Islamic Banking A Case of Islamic Banks in Oman

The concept of Sharia governance in Islamic banks in Oman was highlighted by presenting the conceptual framework for Sharia governance and regulating the Islamic banks through Sharia governance. Finally, the study explains the role of Sharia governance in raising the efficiency of Islamic banks. As this research paper concluded that Sharia governance has a major role in Islamic banks, through the existence of a Sharia supervisory body on all transactions that take place inside these banks, which prevents the occurrence of any activities that violate the provisions of Islamic law, as happens in other banks.
 The Sharia Supervisory Board for Muzn is the highest authority in the bank with regard to all matters related to Islamic law. It ensures that the commission’s decisions are strictly followed. The Sharia Supervisory Board reviews product papers, structures, policies, and legal documents and all other tasks. The board also provides decisions based on Sharia in all matters and related banking issues, including opinion on all aspects of the bank's commitment to Islamic law. The findings indicated that Sharia governance laws must be applied by Islamic banks and they need to make updates through the SSB and AAOIFI boards. Sharia was found to be a regulatory and supervisory component that Islamic banks must operate under to ensure the religion has been applied within the establishment of the banks.

Diversity and risk taking in Islamic banks: Does public listing matter?

This study examines two dimensions of diversity on the board of directors (BOD) and the sharia supervisory board (SSB), namely, gender diversity and educational diversity, and their influence on risk taking by Islamic banks. The study extends the literature by examining whether the influence of gender and educational diversity on Islamic banks' risk taking differs based on whether the bank is publicly listed. Based on a sample of Islamic banks in twenty-six countries, the findings suggest that greater representation of women on the BOD decreases the insolvency risk at listed Islamic banks and that the educational diversity of BOD and SSB members has a significant influence on Islamic banks’ risk taking, conditional on whether they are publicly listed. The results are robust to market-based risk measures and the use of a difference–generalized method of moments estimator and propensity score matching technique.

The Role Of The Sharia Supervisory Board (DPS) In Supervision Of Contract Implementation At The Binjai Branch Bri Sharia

This study aims to determine the position and function of DPS in contract making, supervision of contract implementation, and the effectiveness of contract supervision at Bank BRI Syariah Binjai Branch. In this research, the researcher conducted research using qualitative methods. Research that uses a qualitative approach aims to explore or build a proportion or explain the meaning behind reality. Researchers are based on reality or events that take place in the field. Qualitative research methods can be interpreted as research that produces descriptive data, regarding spoken and written words, and observable behavior of the people being studied. Qualitative research is also research that produces descriptions in the form of words or verbally from the phenomenon under study or from people who are competent in their fields. The results of this study are that the position and function of the DPS in drafting the BRI Syariah Bank contract is appropriate. In general, what is being done is to supervise all forms of activities related to existing contracts in the bank. This supervision also takes the form of standardizing and ratifying contract standards that apply nationally in the sense that it applies to all BRI Syariah branches, as well as assisting parties in disseminating information to BRI Syariah branches in the regions.

مسارات توظيف القوى الناعمة في غرس القيم الاجتماعية من منظور التربية الإسلامية

This study aims to identify some issues facing the Sharia Supervisory Board (SSB) in Indonesia and find ways to solve them. Some cases were found to have obstructed SSB operations, resulting in SSB's failure to enjoy its privileges. What is interesting is that the legalization of many Sharia banking systems in Indonesian civil law didn’t produce optimal results that is the full commitment of Islamic banking activities to principles of Sharia. This study contributes to providing effective and applicable solutions in order to systematically improve the work of SSB. The researcher relies on the inductive and analytical approach to clarify and solve the problems by referring to heritage and contemporary būks. The research reached some conclusions and recommendations: 1- Making legal affiliation of the SSB refer to a higher official authority in-country to ensure independence. 2- The SSB must prove the urgency of their presence among customers and utilize technology to accelerate demonstrating of Sharia provisions for ongoing projects. 3- There is still a problem in appointing the members of SSB by the bank’s general assembly due to potential conflicts of interest. 4- SSB members can collect salaries and bonuses from Islamic banks in return for their efforts and carving out their times. The Aim of the study was to Identify: Trajectory Placement of Soft Powers in Inculcating Social Values from the Perspective of Islamic Education, By Identifying the best method for Placement of soft power in instilling social values, and the basic criteria for trajectory the media, and Highlighting the Role of social media in inculcating those values, The researchers used the Descriptive and analytical Method to study this research, And they reached several conclusions, the most important of which are: that soft power is a common right that Muslims should activate its mechanisms within their future plans, and the falsification of contemporary collective awareness is one of the biggest crimes against human societies, and this has resulted in an increase in consumption rates. The two researchers recommended several recommendations, the most important of which are: Islamic societies face many problems that have contributed to the scientific and technical backwardness, due to the reliance on Western curricula as they are, without reformulating it in a way appropriate to the culture of the Muslim community. And The Islamic media suffers from several problems, and the reason for this is due to the lack of maturity of the media vision, lack of experience, financial weakness, and the lack of attractive elements in it. And the Poor social relations cause social isolation, so everyone is preoccupied with his phone, He is interested in dry communication and neglecting true communication with those are closed, also Establishing institutions and centers to spread Islamic cultural awareness in society concerned with monitoring and combating foreign values that occur to society, Using dialogue in social media as one of the methods of advocating Islamic values, and presenting information in the form of dialogue on issues through positive discussion.

التحديات التي تواجهها هيئة الرقابة الشرعية في إندونيسيا وسبل علاجها

This study aims to identify some issues facing the Sharia Supervisory Board (SSB) in Indonesia and find ways to solve them. Some cases were found to have obstructed SSB operations, resulting in SSB's failure to enjoy its privileges. What is interesting is that the legalization of many Sharia banking systems in Indonesian civil law didn’t produce optimal results that is the full commitment of Islamic banking activities to principles of Sharia. This study contributes to providing effective and applicable solutions in order to systematically improve the work of SSB. The researcher relies on the inductive and analytical approach to clarify and solve the problems by referring to heritage and contemporary būks. The research reached some conclusions and recommendations: 1- Making legal affiliation of the SSB refer to a higher official authority in-country to ensure independence. 2- The SSB must prove the urgency of their presence among customers and utilize technology to accelerate demonstrating of Sharia provisions for ongoing projects. 3- There is still a problem in appointing the members of SSB by the bank’s general assembly due to potential conflicts of interest. 4- SSB members can collect salaries and bonuses from Islamic banks in return for their efforts and carving out their times.

Meta Synthesis of GCG, SSB, and CSR on Islamic Banking Performance

<p>This research applies a meta-synthesis of research articles on financial and maqasid sharia performance from three dimensions: Good Corporate Governance (GCG), Sharia Supervisory Board (SSB), and Corporate Social Responsibility (CSR). The meta-synthesis was carried out on 50 articles from Scopus-indexed international (Q4-Q1) and Sinta-accredited national (S5-S1) journals published between 2000 and 2020. The meta-synthesis is used as a qualitative systematic review method, which has not been used in similar studies. The results show an inconsistent influence of exogenous variables (GCG, SSB, and CSR) on endogenous variables (financial performance and maqasid sharia performance). The inconsistency is likely due to differences in various and incomprehensive uses of variables and measurement indicators. The optimal implementation of GCG, SSB, and CSR can affect financial performance.</p>

The Prospect of Indonesian Islamic Banks after Merger | مستقبل البنوك الإسلامية الإندونيسية بعد صدور قانون الاندماج

Bank is an institution that operates without interest, whose activities are to realize material benefits through the collection and distribution of funds in accordance with sharia, where aspects of the implementation of prudential principles and good governance are supervised by the OJK. While the system and mechanism for the fulfillment of sharia compliance, the institution that has an important role is the National Sharia Council (DSN) of the MUI to issue a fatwa on the conformity of sharia for a bank product. Then the POJK emphasized that all Islamic banking products should only be offered to the public after the bank received a fatwa from the DSN MUI and obtained permission from the OJK. In the operational order, each Islamic bank is also required to have a Sharia Supervisory Board (DPS) which functions for sharia supervision and as an advisor in answering questions regarding whether its activities are sharia-compliant or not.Islamic banking in Indonesia continues to develop gradually and progress. In recent years, Islamic Banking has been on the rise, triggered by the great desire of the public to obtain halalness in conflict with banks. This shows that the prospect of Bank Syariah Indonesia will improve, especially with the merger of three Islamic Banks in Indonesia, namely PT. Bank Mandiri Syariah, PT. BNI Syariah and PT. BRIS, Tbk. To become Bank Syariah Indonesia Tbk, which is expected by the government so that Indonesia can become a barometer of the Islamic economy in the world and will be ranked seventh in Indonesia based on assets.

PENGARUH RASIO EARLY WARNING SYSTEM DAN GOOD CORPORATE GOVERNANCE TERHADAP TINGKAT SOLVABILITAS PADA ASURANSI JIWA SYARIAH

The purpose of this research is to determine the effect of early warning systems (EWS) and good corporate governance (GCG) on the level of solvency. The indicators that used to measure EWS are the ratio of the change in surplus, the ratio of claim expenses, the ratio of management fees, the ratio of liquidity and the ratio of premium growth. Meanwhile, the indicators used to measure GCG are the size of the board of commissioners, the size of the board of directors and the size of the sharia supervisory board (SSB). The indicator used to measure the level of solvency is risk based capital (RBC). This research uses a quantitative research method with purposive sampling technique, which produces a sample of 14 sharia life insurance companies (consisting of 70 data) listed in the Financial Services Authority for the 2015-2019 period. This research has results that show that the ratio of changes in surplus, the ratio of claim expense, the ratio of management costs, the ratio of premium growth, and the size of SSB have no influence on the level of solvency. Meanwhile, the liquidity ratio, the size of the board of commissioners and the size of the board of directors have an influence on the level of solvency.

Leverage, Ukuran Dewan Komisaris, Ukuran Dewan Pengawas Syariah dan Pengaruhnya Terhadap Pengungkapan Islamic Social Reporting (ISR)

The purpose of this research is to find out the influence of leverage, size of the board of commissioners and sharia supervisory board toward the disclosure of Islamic Social Reporting (ISR) at Sharia Commercial Bank in Indonesia during 2017-2019 and test it. Purposing sampling is the technique that been used in this research with the samples 12 Sharia Commercial Bank during 3 years observation respectively with the result obtained 36 samples. The analysis technique used in this research was multiple regressions. The analysis result shows that leverage has no significant influenced toward the disclosure of Islamic Social Reporting (ISR), size of the board of commissioners has a positive significant influenced toward the disclosure of Islamic Social Reporting (ISR) and syaria supervisory board has no significant influenced toward the disclosure of Islamic Social Reporting (ISR).

Analysis of Factors Affecting Customer Decisions in Choosing Savings Products at PT. Bank Syariah Mandiri Bengkulu Branch

The purpose of this study is to determine the most dominant factors that influence customer decisions in choosing savings products at PT. Bank Syariah Mandiri Bengkulu Branch, as for these factors are: (1) Social Factors, (2) Cultural Factors, (3) Factors Personal, (4) Psychological Factors. Theory related to the title Analysis of Factors Influencing Customer Decisions in Choosing Savings Products at PT Bank Syariah Mandiri Bengkulu Branch was motivated by intense competition between financial institutions, where Bank Syariah Mandiri is focused on goods and financial services companies that have established since October 25, 1999 until now, where the Sharia Bank itself operates in accordance with the Qur'an and Hadith and the necessity for a Sharia Supervisory Board (DPS). As for the number of respondents in this study as many as 50 people, and the sampling technique used is accidental sampling. The data source uses primary data by filling out questionnaires, and distributing questionnaires to respondents. The method in this study uses a rating scale.The conclusion of this study is that all factors influence customer decisions, but there are the most dominant factors, namely Social Factors and Personal Factors. After conducting research the results of the calculation of the average value of social factors are 204 and 197 the average value of personal factors.

Tinjauan Kelembagaan Dewan Pengawas Syariah dari Aspek Nomenklatur, Kedudukan di Lembaga Perbankan dan Remunerasi

<p><em>DPS is a key institution that ensures the operational activities of sharia financial institutions are in accordance with sharia principles. In order to streamline the implementation of DPS duties, efforts are needed to increase knowledge of banking operations, as well as the intensity of its involvement in outreach programs for local residents. In practice, there are still many problems that cause the supervisory aspect not to be optimal as expected. This is caused by several factors, both internal and external. This study aims to determine the institutional review of DPS in terms of nomenclature, position in banking institutions and remuneration. The research method used in this research is literature review sourced from books, articles, internet and opinions of experts in accordance with the discussion. </em><em>In according to </em><em>the nomenclature, DPS in Indonesia would be more appropriate to use the term Sharia Advisory Board instead of the Sharia Supervisory Board. Meanwhile, in terms of position in banking institutions, DPS should only be allowed to serve in one financial institution so as not to create a conflict of interest between one financial institution and another. Whereas in terms of remuneration, it should be that which determines and provides remuneration to DPS is the association of sharia financial institutions such as the Association of Indonesian Sharia Banks (ASBISINDO), the Association of All Indonesian BMTs (ABSINDO), and others so as not to cause objectivity in </em><em>implementation of duties</em><em> because it will inevitably be biased in making decisions.</em></p>

Pendapatan Non-Halal, Zakat, Dewan Pengawas Syariah dan Reputasi Perbankan Syariah di Indonesia

This study examines the influence of non-halal funds, zakat, and the number of Sharia Supervisory Board (SSB) on the reputation of Islamic banking in Indonesia. The sample is determined by the purposive sampling method and resulted in 7 banks or 35 observations from 2014 to 2018. The results showed that non-halal funds did not affect the reputation of Islamic banking. However, non-halal funds in the company's financial report notes show that Islamic banks, especially in Indonesia, have not fulfilled sharia regulations. The results also showed that zakat affects the reputation of Islamic banking. Zakat in Indonesia is greatly influenced by company size in terms of its assets. Zakat paid by Islamic banks in Indonesia is still low, and the gap for the welfare of the directors and employees of Islamic banks is a huge difference. Furthermore, this study indicated that the number of SSB affects the reputation of Islamic banking. Therefore, SSB has a significant role in compiling reports about sharia compliance. The ideal number of SSB is between 3 and 6 people.