Social reporting by Islamic banks: does social justice matter?

2013 ◽  
Vol 26 (6) ◽  
pp. 911-945 ◽  
Author(s):  
Rania Kamla ◽  
Hussain G. Rammal
Keyword(s):  
Social Justice ◽  
Content Analysis ◽  
Critical Theory ◽  
Web Sites ◽  
Social Roles ◽  
Annual Reports ◽  
Islamic Banks ◽  
Poverty Eradication ◽  
Social Accounting ◽  
Content Type

Purpose – This study examines social reporting by Islamic banks with special emphasis on themes related to social justice. By using critical theory and “immanent critique”, the study attempts to explain and delineate reasons for disclosures and silences in Islamic banks ' annual reports and web sites vis-à-vis social justice. Design/methodology/approach – The approach taken was a content analysis of annual reports and web sites of 19 Islamic banks. Findings – Islamic banks ' disclosures emphasise their religious character through claims that they adhere to Sharia ' s teachings. Their disclosures, however, lack specific or detailed information regarding schemes or initiatives vis-à-vis poverty eradication or enhancing social justice. Research limitations/implications – Limitations associated with content analysis of annual reports and internet web sites apply. This study focuses on Islamic banks ' social roles. Further studies of banks ' social roles in society in general are of interest. Practical implications – Drawing attention of Islamic banks and other stakeholders to the gap between the rhetorical religious and ethical claims of Islamic banks and their activities (as depicted through their disclosures) opens up the possibility of a positive change in Islamic banks ' actual social roles. Originality/value – The study fills a gap in both social accounting and Islamic accounting literatures with its emphasis on social justice and poverty eradication. The study contributes to the very scarce literature linking religion (especially Islam), critical theory, social accounting and Islamic accounting. It goes beyond previous research in Islamic accounting literature by exposing contradictions in the Islamic banking industry ' s rhetoric regarding their social role in society.

Corporate governance and IFSB standard-4: evidence from Islamic banks in Bangladesh

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md. Harun Ur Rashid ◽  
Ruma Khanam ◽  
Md. Hafij Ullah
Keyword(s):  
Corporate Governance ◽  
Content Analysis ◽  
Financial Services ◽  
Secondary Data ◽  
Positive Influence ◽  
Least Square ◽  
Annual Reports ◽  
Islamic Banks ◽  
Content Type ◽  
The Impact

Purpose This paper aims to examine the compliance status of Islamic banks in Bangladesh with Shari’ah-based accounting standards named Islamic Financial Services Board (IFSB) standard-4 and its association with corporate governance. Design/methodology/approach The six years of secondary data, including the annual reports of 2013–2018, were collected from the websites of all the seven listed Islamic banks, i.e. 100% of the population available during the period of study. The study used a content analysis approach for systematically categorizing and analysing the contents disclosed in the annual report. A total compliance score based on 133 reporting items of IFSB standard-4 were considered for content analysis. Furthermore, this study applied the ordinary least square to investigate the impact of corporate governance on IFSB standard-4. Findings This study found that the level of compliance with the IFSB standard by the Islamic banks in Bangladesh is poor, as the overall compliance status is 44.83%. Further, this study observed a significant and positive influence of the Shari’ah supervisory committee, the board size, accounting experts on the board, foreign ownership and institutional ownership on the level of compliance with IFSB standard-4. On the other hand, this study found a negative effect of directors’ ownership on the level of compliance with IFSB standard-4. Practical implications This study provides the management of Islamic banks an insight into developing their governance characteristics to comply with Islamic accounting and reporting standards. Moreover, this study expects to facilitate the management of Islamic banks in designing their accounting and reporting outlines to enhance the level of compliance with the IFSB standards. Originality/value This pioneering study on IFSB standards opens an avenue to the researchers exploring the accounting and reporting status of Islamic banks considering the requirements of the IFSB standards.

Measuring the quality of the “comply or explain” approach

2015 ◽  
Vol 30 (4/5) ◽  
pp. 373-412 ◽  
Author(s):  
Michail Nerantzidis
Keyword(s):  
Content Analysis ◽  
Web Sites ◽  
Stock Exchange ◽  
The Body ◽  
Content Type ◽  
Athens Stock Exchange ◽  
Recent Financial Crisis ◽  
The One ◽  
Comply Or Explain

Purpose – This paper provides evidence regarding the efficacy of the “comply or explain” approach in Greece and has three objectives: to improve our knowledge of the concept of this accountability mechanism, to elevate auditors’ potential role in the control of corporate governance (CG) statements and to contribute to the discussion about the reform of this principle; a prolonged dialogue that has been started by European Commission in the light of the recent financial crisis. Design/methodology/approach – The approach taken is a content analysis of CG statements and Web sites of a non-probability sample of 144 Greek listed companies on the Athens Stock Exchange for the year 2011. Particularly, 52 variables were evaluated from an audit compliance perspective using a coding scheme. From this procedure, the level of compliance with Hellenic Federation of Enterprises (SEV) code, as well as the content of the explanations provided for non-compliance, were rated. Findings – The results show that although the degree of compliance is low (the average governance rating is 35.27 per cent), the evaluation of explanations of non-compliance is even lower (from the 64.73 per cent of the non-compliance, the 40.95 per cent provides no explanation at all). Research limitations/implications – The research limitations are associated with the content analysis methodology, as well as the reliability of CG statements. Practical implications – This study indicates that companies on the one hand tend to avoid the compliance with these recommendation practices, raising questions regarding the effectiveness of the SEV code; while on the other, they are not in line with the spirit of the CG code, as they do not provide adequate explanations. These results assist practitioners and/or policy-makers in perceiving the efficacy of the “comply or explain” approach. Originality/value – While there is a great body of research that has looked into the compliance with best practices, this study is different because it is the first one that rates not only the degree of the compliance with the code’s practices but also the content of the explanations provided for non-compliance. This is particularly interesting because it adds to the body of research by providing a new approach in measuring the quality of the “comply or explain” principle in-depth.

scholarly journals CSR practices of Palestinian Islamic banks: contribution to socio-economic development

2017 ◽  
Vol 9 (2) ◽  
pp. 133-147 ◽  
Author(s):  
Abdalrahman Mohamed Migdad
Keyword(s):  
Economic Development ◽  
Secondary Analysis ◽  
Annual Reports ◽  
Islamic Banks ◽  
Structured Interviews ◽  
Human Welfare ◽  
Content Type ◽  
Main Research ◽  
Socio Economic Development ◽  
Islamic Financial Institutions

Purpose Corporate social responsibility (CSR) is an important corporate activity that affirms the importance of giving back to the community. This research aims to examine the CSR practices of Palestinian Islamic banks and their contribution to socio-economic development. There is an ongoing debate regarding Islamic financial institutions’ profit motive versus their motivation to achieve human welfare. The Palestinian Islamic banks are not disconnected from this debate, and this paper aims to discuss this issue. Design/methodology/approach For the purpose of assessing the CSR practices of Palestinian Islamic banks, a secondary analysis of the banks’ annual reports was carried out. In addition, 11 structured interviews were conducted with Islamic banks’ practitioners at the decision-making level and with some of the banks’ Sharīʿah board members to gather their views on CSR. These have been analyzed in light of the actual CSR practices disclosed in each bank’s annual reports. Findings The main research findings suggest that the CSR practice is highly valued by the Palestinian Islamic banks, but it is small and has marginal effects on the community’s socio-economic development. Another important observation from report analysis is that Islamic banks have great potential for expansion, given that the demand for Islamic financial transactions is double of what Islamic banks currently offer. If Islamic banks live up to that opportunity, they could deliver more in CSR practices, which is their ultimate goal according to the majority of the interviewees. Originality/value Existing literature has presented findings on the CSR of Palestinian corporations in general, but there is no available literature on the CSR practices of Palestinian Islamic banks. This research attempts to fill in the gap by presenting preliminary findings on Palestinian Islamic banks’ CSR practices.

Value- based Islamic banking and reporting in Bahrain

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Akhtar Ali Saeed Mohammed ◽  
Fadillah Mansor
Keyword(s):  
Annual Reports ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Reporting Standard ◽  
Content Type ◽  
Islamic Financial Institutions ◽  
Islamic Economic ◽  
Practical Implications ◽  
Specific Contribution

Purpose This paper aims to analyse whether the practices of Islamic banks in Bahrain are in line with value-based Islamic banking (VBIB) and reporting disclosure in the annual reports towards achieving their fundamental objectives of human-centred economic development and social justice. Design/methodology/approach Based on Islamic finance, Islamic economic principles and perception of Maqasid al-Shari’ah, this paper examines and assesses the current practices of Islamic financial institutions (IFIs) in Bahrain through content analysis of financial and annual reports of Islamic banks in Bahrain and interviews of Islamic banking experts. Findings The findings reveal that value-based banking (VBB) has not been translated fully into practice by the Islamic banks in Bahrain. Research limitations/implications The data analysis was restricted to Islamic banks in Bahrain. Practical implications This paper identifies the need for reporting standard development to improve the VBB practice in Bahrain in the future. Looking at the objectives of the IFIs, this paper introduces the concept of VBB in Bahrain, which includes ethical banking, responsible banking and social responsibility. The study adds value not only to the current Islamic finance literature but also helps many stakeholders, including prospective academics, who may conduct comparative studies in different jurisdictions throughout the world. Originality/value The specific contribution of this paper is the identification of the VBB practices and related disclosure in the Islamic banking industry in Bahrain. The study is useful to harmonise and standardise the practices of VBIB by the contemporary Islamic banks in Bahrain.

Disclosing CSR by Islamic banks: does Jaiz Bank Nigeria, Plc adopt the practice of Islami Bank Bangladesh Limited?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Umar Habibu Umar ◽  
Sulaiman Musa
Keyword(s):  
Financial Regulation ◽  
Technical Assistance ◽  
Advisory Council ◽  
Annual Reports ◽  
Islamic Banks ◽  
Content Type ◽  
The Poor ◽  
Corporate Social ◽  
The Needy ◽  
Practical Implications

Purpose This paper aims to establish whether Jaiz Bank Nigeria, Plc (JBNP) adopts the corporate social responsibility (CSR) practice and disclosure of Islami Bank Bangladesh (IBBL) as the latter provided managerial and technical assistance to the former. Design/methodology/approach The data were extracted from the annual reports and accounts of the banks from 2013 to 2017. Findings The study established that over the period, IBBL had clearly disclosed sector-wise CSR expenditures and the number of beneficiaries, such as humanitarian and disaster relief, education, health and environment, among others, for the welfare of the poor and the needy in the country. However, the CSR practice and disclosure of IBBL have not yet been adopted by JBNP. It only discharges CSR activities through its foundation called Jaiz Foundation, with unlawful income based on the doctrine of necessity, as approved by the Financial Regulation Advisory Council of Experts (FRACE) of the Central Bank of Nigeria (CBN). Further, the total amount to expend for CSR activities is located in the statement of sources and uses of charity funds. Research limitations/implications The study covered only two Islamic Banks. Besides, only CSR aspects for the community service and development over five years were examined. Practical implications It is suggested that JBNP should adopt the CSR practice and disclosure of IBBL for the welfare of the poor and the needy in Nigeria. Social implications Adopting the IBBL CSR practice and disclosure by JBNP would contribute to the minimization of the incidence of poverty in Nigeria. Originality/value This study, to the best knowledge of the researchers, is among the few of its kind that deeply evaluated the CSR expenditure of Islamic banks solely for the welfare of the poor and the needy of the society.

scholarly journals The impact of AAOIFI governance disclosure on Islamic banks performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tawida Elgattani ◽  
Khaled Hussainey
Keyword(s):  
Corporate Governance ◽  
Regression Model ◽  
Financial Institution ◽  
Ordinary Least Squares ◽  
Annual Reports ◽  
Islamic Banks ◽  
Least Squares Regression ◽  
Content Type ◽  
The Impact ◽  
Governance Disclosure

Purpose This study aims to investigate the impact of the accounting and auditing organisation for Islamic financial institution (AAOIFI) governance disclosure on the performance of Islamic banks (IBs). Design/methodology/approach The ordinary least squares regression model was used to test the impact of AAOIFI governance disclosure on the performance of 126 IBs from 8 countries that mandatorily adopt the AAOIFI standards for three years (2013–2015). In this regression model, return on asset (ROA) and return on equity (ROE) are the dependent variables, while AAOIFI governance disclosure is the independent variable. Corporate governance mechanisms, firm characteristics, year dummy and country dummy are used as control variables. Findings This paper found an insignificant relationship between AAOIFI governance disclosure and IBs performance. Research limitations/implications This study highlighted the implication that the current research may help IBs and encourage them to disclose more information in annual reports, especially those related to AAOIFI governance standards because following good corporate governance leads to good financial performance. The major limitation of the paper is that it is only focussed on two measurements of bank performance – ROA and ROE; it would be good to use other firm performance measures, such as profit margin. Originality/value This study provides new empirical evidence on the impact of AAOIFI governance disclosure on IBs performance.

Enhanced business reporting: value relevance and determinants of valuation-related disclosures

2017 ◽  
Vol 18 (4) ◽  
pp. 832-867 ◽  
Author(s):  
Christine Reitmaier ◽  
Wolfgang Schultze
Keyword(s):  
Decision Making ◽  
Content Analysis ◽  
Value Relevance ◽  
Annual Reports ◽  
Valuation Theory ◽  
Voluntary Disclosures ◽  
Content Type ◽  
Book Value ◽  
Business Reporting ◽  
Market Values

Purpose Enhanced business reporting (EBR) seeks to address the information needs of investors when making company valuations for investment decisions. The purpose of this paper is to analyze the relevance for market valuation of EBR disclosures that are directly related to firm valuation (value-based reporting (VBR)). Design/methodology/approach Data are hand collected from annual reports of German publicly listed companies over five years. The content analysis is based on the valuation-related disclosure framework of the German Schmalenbach Society of Business Administration. A 2SLS approach accounts for potential endogeneity. Findings Share-based compensation, leverage, corporate size, and share volatility are significant determinants of VBR. The level of VBR is significantly associated with market values and provides additional market value explanatory power, indicating its relevance to investors in the process of valuation and decision making. Also, the relevance of book value and earnings for explaining market values increases for firms with better VBR. The findings are robust to the exclusion of banks and assurance companies and to alternative model and variable specifications. Research limitations/implications The research contributes to the literature on voluntary disclosures by testing an EBR framework explicitly derived from valuation theory. The results provide indirect evidence of the investors’ use of respective valuation techniques in decision making. A contribution is made to the value relevance literature by showing that valuation-related disclosures constitute a suitable proxy for “other information” in the Ohlson’s (1995) model. Such disclosures complement traditional accounting metrics, i.e. book value and earnings, as basis for valuations. Potential caveats relate to the content analysis of annual reports and the endogeneity of voluntary disclosures. Originality/value This paper informs the debate on further developments of EBR in helping to identify important components thereof.

scholarly journals Performance of Islamic banks

2019 ◽  
Vol 11 (2) ◽  
pp. 303-321 ◽  
Author(s):  
Abdalmuttaleb Musleh Alsartawi
Keyword(s):  
Negative Relationship ◽  
Multiple Linear Regression Model ◽  
Annual Reports ◽  
Islamic Banks ◽  
Return On Assets ◽  
Content Type ◽  
Gcc Countries ◽  
Governance Model ◽  
Supervisory Boards ◽  
The Relationship

Purpose This paper aims to investigate the relationship between the composition of Sharīʿah supervisory boards (independence and frequency of meetings) and the performance of Islamic banks in the Gulf Cooperation Council (GCC) countries. Design/methodology/approach The study developed a multiple linear regression model, and data were collected from the annual reports of 48 standalone Islamic banks listed in the GCC countries covering the period between 2013 and 2017. Findings The results showed a statistically significant and negative relationship between the composition of the Sharīʿah supervisory boards and the performance of Islamic banks. Research limitations/implications As the current study used only one indicator, that is Return on Assets to measure performance, it is recommended to expand the framework of this study, through the addition of market-based performance indicators such as Tobin’s Q. Practical implications This study recommends the GCC countries to follow a more proactive Sharīʿah governance model to strengthen their frameworks from both regulatory and non-regulatory aspects. Originality/value The study contributes to the Sharīʿah governance and Islamic banking literature relating to the GCC countries as previous studies gave no attention to the composition of Sharīʿah supervisory boards.

Can Shariah board characteristics influence risk-taking behavior of Islamic banks?

2019 ◽  
Vol 12 (4) ◽  
pp. 469-488 ◽  
Author(s):  
Amal AlAbbad ◽  
M. Kabir Hassan ◽  
Irum Saba
Keyword(s):  
Risk Taking ◽  
Supervisory Board ◽  
Annual Reports ◽  
Islamic Banks ◽  
Content Type ◽  
Asset Return ◽  
Board Characteristics ◽  
The Relationship ◽  
Risk Taking Behaviors ◽  
Practical Implications

Purpose The purpose of this paper is to study whether the characteristics of the Shariah Supervisory Board (SSB) can influence the risk-taking behaviors of Islamic banks. Design/methodology/approach The data on governance were collected from 70 Islamic banks’ annual reports across 18 countries for the period from 2000 to 2011 to investigate the relationship between SSB’s characteristics including size, busyness and foreign board and the Islamic banks’ risk activities. Findings The size of SSB and the proportion of busy board in SSB positively and significantly influence Islamic banks’ asset return and insolvency risks. Foreign members are more effective in monitoring banks’ Shariah compliance. Further analysis provides some evidence that most of the findings on the associations between the SSB structure and bank risk are derived from countries in the Gulf Cooperation Council where Shariah governance is ruled internally at the bank level. Practical implications There is a need for better Shariah board characteristics in place that complement with other governance mechanisms to well comprehend the main purpose of Islamic banks. Originality/value SSB board busyness and foreign characteristics appear to influence the risk-taking behaviors of Islamic banks.

Corporate governance and compliance with AAOIFI governance standards by Islamic banks

2020 ◽  
Vol 13 (5) ◽  
pp. 891-918
Author(s):  
Yosra Mnif ◽  
Marwa Tahari
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Audit Committee ◽  
Annual Reports ◽  
Islamic Banks ◽  
Content Type ◽  
Disclosure Requirements ◽  
Financial Expertise ◽  
Islamic Financial Institutions ◽  
Research Stage

Purpose This study aims to examine the effect of the main corporate governance characteristics on compliance with accounting and auditing organisation for Islamic financial institutions’ (AAOIFI) governance standards’ (GSs) disclosure requirements by Islamic banks (IB) that adopt AAOIFIs’ standards in Bahrain, Qatar, Jordan, Oman, Syria, Sudan, Palestine and Yemen. Design/methodology/approach The sample consists of 486 bank-year observations from 2009 to 2017. Findings The findings reveal that compliance with AAOIFIs’ GSs’ disclosure requirements is positively influenced by the audit committee (AC) independence, AC’s accounting and financial expertise and industry expertise, auditor industry specialisation, IB’s size and IB’s listing status. On the other hand, it is negatively influenced by the ownership concentration. Research limitations/implications This study has only examined compliance with AAOIFI’s GSs’ disclosure requirements and has focussed on one major sector of the Islamic financial institutions (which is IB). Practical implications The findings are useful for various groups of preparers and users of IBs’ annual reports such as academics and researchers, accountants, management of IBs and some organisations. Originality/value While the study of the AAOIFIs’ standards has grown contemporary with considerable contributions from scholars, however, the majority of these studies are descriptive in nature. Indeed, the existing literature that has explored the determinants of compliance with AAOIFI’s standards is in the early research stage. To the best of the knowledge, there is a paucity of empirical research testing this issue.

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