scholarly journals SHARIAH GOVERNANCE DAN KUALITAS TATA KELOLA PERBANKAN SYARIAH

2015 ◽  
Vol 4 (2) ◽  
Author(s):  
Ali Rama ◽  
Yella Novela
Keyword(s):  
Corporate Governance ◽  
Unique Feature ◽  
Board Members ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Board Meeting ◽  
Governance System ◽  
Governance Practices ◽  
Shariah Governance

Corporate governance for Islamic banking has a unique feature compared with banking conventional. It is required to complement the existing governance framework with shariah governance system to ensure the shariah compliance of all Islamic banking’s operational. Therefore, this study aims to analyze the effect of the practice of shariah governance to the quality of GCG implemented by Islamic banks. Practices of shariah governance are measured by number of shariah board members, doctoral qualification of shariah board and frequency of shariah board meeting. The study finds that shariah governance has a significant impact to the increase quality of GCG in Islamic banks. Another interesting finding is that the increase of credit risk (NPF) leads to the worse of Islamic banks’ corporate governance. ROA and CAR have no significant effect to the quality of corporate governance in Islamic banks. The study recommends that the Islamic banks should improve their shariah governance practices in order to increase their governance performance as well as public confidenceDOI: 10.15408/sjie.v4i2.2301

scholarly journals Sustainable Business Practices and Firm’s Financial Performance in Islamic Banking: Under the Moderating Role of Islamic Corporate Governance

2019 ◽  
Vol 11 (23) ◽  
pp. 6606 ◽  
Author(s):  
Amin Jan ◽  
Maran Marimuthu ◽  
Rohail Hassan ◽  
Mehreen
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Islamic Banking ◽  
Managerial Ownership ◽  
Business Practices ◽  
Islamic Banks ◽  
Sustainable Business ◽  
Shariah Governance ◽  
Moderating Role

This paper examines the moderating role of Islamic corporate governance on the link between sustainable business practices and the firm’s financial performance. A post-crisis period sustainability data for the decade of 2008–2017 was collected by the study. For data collection, this study used the weighted content method. The Generalized Method of Moments (GMM) statistical test was used for empirical testing. The results of the study found that the link between sustainable business practices with the firm’s financial performance measured from the shareholders’ and the management’s perspective is positive, while the subjected link measured from the market perspective was found to be insignificant. This implies that the market stakeholders of the Islamic banks are reluctant for their bank’s spending on sustainable business practices. Interestingly, the insignificant link between sustainable business practices and market performance became significant with the moderating role of Shariah governance and managerial ownership. It shows that the moderating role of Shariah governance and managerial ownership is giving confidence to market stakeholders of Islamic banks for receiving a higher financial return through sustainable business practices initiatives. These results may provide insights for several policymakers of the Islamic banking industry about integrating vital sustainability practices in their business models and about the balanced moderating role of Islamic corporate governance in the link between sustainable business practice and the firm’s financial performance. It provides a roadmap to the Islamic banking industry for efficient management of sustainability practices from an Islamic perspective and subsequently improvement of financial performance through it.

scholarly journals Corporate Governance and Risk Disclosures: A Comparative Analysis Between Bangladeshi and Malaysian Islamic Banks

2019 ◽  
Vol 10 (5) ◽  
pp. 110
Author(s):  
Mohammad Rokibul Kabir ◽  
Farid A. Sobhani ◽  
Normah Omar ◽  
Norazida Mohamad
Keyword(s):  
Corporate Governance ◽  
Profit Sharing ◽  
Annual Reports ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Risk Disclosure ◽  
Corporate Governance Mechanisms ◽  
Analysis Technique ◽  
Risk Disclosures

Corporate governance provides a fundamental framework to oversee corporate conduct and ensures transparency of institutions like banks. In case of Islamic banks, it adds additional importance as the profit sharing (with the depositors) system enhances the chance of agency problem for such institutions. Again, risks are inherent in institutions like Islamic banks, which necessitate the investors to get proper information about the risk encountered by the banks in which they invest. Thus, corporate governance and risk disclosures bear utmost importance. Since Malaysian banking industry has already experienced a favorable growth of Islamic banking and Bangladesh is observing a rapid growth of popularity of Islamic banking, a comparative study has been undertaken between Malaysian and Bangladeshi Islamic banks regarding corporate governance and risk disclosures in annual reports. Content analysis technique has been applied to facilitate the comparison. Both quantity and quality of risk reporting of the sample companies have been evaluated. A corporate governance disclosure index has been developed by following the guidelines provided by Bangladesh Security and Exchange Commission (BSEC) and the principles laid down in the ‘Guidelines on Corporate Governance for Licensed Islamic Banks in Malaysia’ to explore and compare the degree of good corporate governance and relevant disclosures in the annual reports. It is hypothesized that corporate governance and risk disclosure will vary between Malaysian and Bangladeshi Islamic Banks. It is also argued that the corporate risk disclosures will be positively associated with the quality of the firm’s corporate governance mechanisms. Results are generally supportive of hypotheses. At the end, implications for theory and practices are discussed in the study.

scholarly journals WHY DOES BANGLADESH REQUIRE A CENTRALIZED SHARIAH GOVERNANCE FRAMEWORK FOR ISLAMIC BANKS?

2022 ◽  
Vol 7 (1) ◽  
pp. 24-42
Author(s):  
Md. Kausar Alam ◽  
Oli Ahad Thakur
Keyword(s):  
Central Bank ◽  
Banking Industry ◽  
Monitoring Systems ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Governance Framework ◽  
Governance Practices ◽  
Supervisory Boards ◽  
Shariah Governance ◽  
Regulatory Challenges

The main objective of this article is to describe the logical reasons why a Centralized Shariah Governance Framework (CSGF) provided by the Central Bank of Bangladesh (Bangladesh Bank) is essential for the country’s Islamic banks. In doing so, it identifies the major regulatory challenges (self-developed and disparate use of Shariah Governance (SG) practices) faced by Islamic banks in Bangladesh. It considers an analytical approach to explore the significance of a CSGF for Islamic banks in Bangladesh and examines the current diversified procedures of SG practices. This article reveals that the self-developed SG practices of Islamic banks in Bangladesh have created confusion and pessimism among the practitioners, bankers and even to the general people and regulators which is negatively affecting the overall image of Islamic banks. Such incongruent governance practices have led to inconsistencies in SG structures, implementation procedures, monitoring activities. In addition, this article reveals that these deficiencies usually exist due to weak monitoring systems of the Central Bank, ineffective functioning of individual Shariah Supervisory Boards (SSB) and the absence of comprehensive SGF. The article argues that the Central Bank of Bangladesh should initiate to reform its Islamic banking industry by introducing a CSGF aimed to identify the roles, responsibilities, powers, and functions of SSB; thereby improving governance, accountability, and overall Shariah compliance quality. This article is hoped to be beneficial for the regulators and practitioners to consider revising current practices.   Keywords: Centralization, Bangladesh Bank, Islamic banks, Shariah governance framework.   Cite as: Alam, M. K., & Thakur, O. A. (2022). Why does Bangladesh require a centralized Shariah governance framework for Islamic banks?  Journal of Nusantara Studies, 7(1), 24-42. http://dx.doi.org/10.24200/jonus.vol7iss1pp24-42

scholarly journals Corporate Governance and Disclosure Quality: Taxonomy of Tunisian Listed Firms Using the Decision Tree Method based Approach

2013 ◽  
Vol 3 (2) ◽  
pp. 46-68 ◽  
Author(s):  
Wided Khiari
Keyword(s):  
Corporate Governance ◽  
Decision Tree ◽  
Disclosure Quality ◽  
Governance System ◽  
Listed Firms ◽  
Governance Practices ◽  
Governance Strategy ◽  
Decision Tree Method ◽  
Tree Method

This study aims to establish a typology of Tunisian listed firms according to their corporate governance characteristics and disclosure quality. The paper uses disclosed scores to examine corporate governance practices of Tunisian listed firms. A content analysis of 46 Tunisian listed firms from 2001 to 2010 has been carried out and a disclosure index developed to determine the level of disclosure of the companies. The disclosure quality is appreciated through the quantity and also through the nature (type) of information disclosed. Applying the decision tree method, the obtained Tree diagrams provide ways to know the characteristics of a particular firm regardless of its level of disclosure. Obtained results show that the characteristics of corporate governance to achieve good quality of disclosure are not unique for all firms. These structures are not necessarily all of the recommendations of best practices, but converge towards the best combination. Indeed, in practice, there are companies which have a good quality of disclosure but are not well governed. However, we hope that by improving their governance system their level of disclosure may be better. These findings show, in a general way, a convergence towards the standards of corporate governance with a few exceptions related to the specificity of Tunisian listed firms and show the need for the adoption of a code for each context. These findings shed the light on corporate governance features that enhance incentives for good disclosure. It allows identifying, for each firm and in any date, corporate governance determinants of disclosure quality. More specifically, and all being equal, obtained tree makes a rule of decision for the company to know the level of disclosure based on certain characteristics of the governance strategy adopted by the latter.

Syari'ah Compliance for Developing Innovation of Sharia Banking Products in Indonesia

2017 ◽  
Vol 1 (2) ◽  
pp. 57-62
Author(s):  
Dasep Sugandi
Keyword(s):  
International Standards ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Real Sector ◽  
Islamic Banks ◽  
Preventive Action ◽  
Literature Study ◽  
Financial Products ◽  
Shariah Governance

This paper discusses the application of Sharia compliance to industry and Islamic finance business. Sharia compliance is a possible means of preventing risk and fraud in the real sector. This also applies to the innovation of Islamic financial products. Shariah rules are expected to be a guide in the operationalization of Islamic banking in Indonesia. With literature study, this paper found that Shariah compliance serves as an ex-ante (preventive) action and measure, to ensure policies, rules, systems and procedures, and business activities undertaken by Islamic banks. Innovation of Islamic banking products refers to sharia standards and shariah governance sourced from Qur'an and Hadith, guided by international standards, fulfillment of integrity and quality of Islamic banking human resources, suitability of contracts, and not dozens of people as consumers.

scholarly journals The Role of Shariah Board in Islamic Banks: Pakistan’s Perspective

2017 ◽  
Vol II (I) ◽  
pp. 356-363
Author(s):  
Muhammad Mushtaq Ahmed ◽  
Zia Uddin ◽  
Muhammad Iqbal
Keyword(s):  
Banking Industry ◽  
Board Members ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Governance Framework ◽  
Advisory System ◽  
Effective Role ◽  
Shariah Governance ◽  
The Individual

The State Bank of Pakistan introduced diversion from the individual Shariah advisory system to the Shariah board mechanism by issuing the Shariah governance framework in 2016 by making it mandatory for the Islamic banks to have an independent Shariah board. In this paper, it is examined whether the Shariah boards have any effective role in the improvement of the Shariah compliance environment of the banks or not? And how to make it more effective for the betterment of the Islamic banking industry? A questionnaire has been developed to study and inspect these issues. The results indicate that even though the role of sharia board could not be denied in the improvement of Shariah compliance in IBIs, however, the mechanism may be further strengthened. The study also suggests that Shariah board members should be involved regularly by making it obligatory on the IBIs to arrange frequent meetings of the board.

دراسة وتحليل تعليمات حوكمة الرقابة الشرعية الصادرة عن بنك الكويت المركزي (Study of the Instructions of Shariah Governance Issued by the Central Bank of Kuwait)

2018 ◽  
Vol 15 (1) ◽  
pp. 105-149
Author(s):  
عبدالعزيز الناهض ◽  
يونس صوالحي
Keyword(s):  
Central Bank ◽  
The State ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Governance System ◽  
History Of ◽  
The State Of Kuwait ◽  
Shariah Governance

الملخّص تهدف هذه الدراسة إلى تصحيح المفاهيم الواردة في بعض الدراسات السابقة حول نظام الحوكمة الشرعية لدولة الكويت، خصوصاً التصور الخاطئ لبعض هذه الدراسات حول دور هيئة الفتوى بوزارة الأوقاف والشؤون الإسلامية بدولة الكويت. بالإضافة إلى سعي الدراسة لتوثيق تاريخ تطور تعليمات الحوكمة الشرعية الصادرة عن بنك الكويت المركزي، التي قد أغفلت عنها الدراسات السابقة، من خلال تقسيم تاريخ صدور التعليمات إلى ثلاثة مراحل أساسية. وفي الختام تسعى الدراسة إلى تحليل ودراسة تعليمات "حوكمة الرقابة الشرعية في البنوك الكويتية الإسلامية" الصادرة مؤخراً عن بنك الكويت المركزي، مع بيان آثار هذه التعليمات على البنوك الإسلامية العاملة في دولة الكويت. الكلمات المفتاحيّة: مصرفية إسلامية، حوكمة شرعية، رقابة شرعية، بنك الكويت المركزي.              Abstract This study aims at rectifying the concepts contained in some previous studies on the Sharia governance system in the State of Kuwait, especially the misconception of some of these studies on the role of the Fatwa Committee in the Ministry of Awqaf and Islamic Affairs. In addition, the study seeks to document the history of the development of the instructions of the SharÊÑah governance issued by the Central Bank of Kuwait, which has been overlooked by previous studies, by dividing the date of issuing the instructions into three basic stages. Lastly, the study seeks to analyze and study the instructions of the "Governance of SharÊÑah Supervision in Kuwaiti Islamic Banks" issued recently by the Central Bank of Kuwait, with the effect of these instructions on the Islamic banks operating in the State of Kuwait. Keywords: Islamic banking, SharÊÑah governance, SharÊÑah supervision, Central Bank of Kuwait.

scholarly journals Pengaruh Kualitas Penerapan Good Corporate Governance dan Risiko Pembiayaan terhadap Profitabilitas Perbankan Syariah

2014 ◽  
Vol 1 (2) ◽  
pp. 134-149 ◽  
Author(s):  
Ferly Ferdyant ◽  
Ratna Anggraini ZR ◽  
Erika Takidah
Keyword(s):  
Corporate Governance ◽  
Secondary Data ◽  
Total Sample ◽  
Negative Influence ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Self Assessment ◽  
Return On Assets ◽  
Good Corporate Governance

The purpose of this research is to analyze the influence of the quality of the implementation of good corporate governance toward profitability of Islamic Banks and analyze the influence of non performing finance toward profitability of Islamic Banks. This research used secondary data from financial statements published by Bank Indonesia and Annual Report GCG in 2010-2013. The Techniques used for sampling is purposive sampling and obtained by 10 Islamic Banks with a total sample of 39 Islamic Banks. Profitability ( Dependent Variable ) in this research is proxied by Return on Assets ( ROA) .While the Independent Variable is The Quality Implementation of Good Corporate Governance obtained from Composite GCG Self Assessment Report Annual Islamic Banking, and Financing Risks are proxied by the Non -Performing Finance ( NPF ). The influence of the three variables and relationships are tested using multiple regression analysis.  T-test SPSS results showed that the quality of the implementation of Good Corporate Governance has negative influence and significant toward profitability of Islamic banking. Non-Performing Finance has negative influence and significant toward profitability of Islamic banking. While the F-test SPSS results showed Implementation of Good Corporate Governance and Quality of Non-Performing Finance has negative influence and significant toward profitability of Islamic banking. Thus, this hypothesis is proven.The purpose of this research is to analyze the influence of the quality of the implementation of good corporate governance toward profitability of Islamic Banks and analyze the influence of non performing finance toward profitability of Islamic Banks. This research used secondary data from financial statements published by Bank Indonesia and Annual Report GCG in 2010-2013. The Techniques used for sampling is purposive sampling and obtained by 10 Islamic Banks with a total sample of 39 Islamic Banks. Profitability ( Dependent Variable ) in this research is proxied by Return on Assets ( ROA) .While the Independent Variable is The Quality Implementation of Good Corporate Governance obtained from Composite GCG Self Assessment Report Annual Islamic Banking, and Financing Risks are proxied by the Non -Performing Finance ( NPF ). The influence of the three variables and relationships are tested using multiple regression analysis.  T-test SPSS results showed that the quality of the implementation of Good Corporate Governance has negative influence and significant toward profitability of Islamic banking. Non-Performing Finance has negative influence and significant toward profitability of Islamic banking. While the F-test SPSS results showed Implementation of Good Corporate Governance and Quality of Non-Performing Finance has negative influence and significant toward profitability of Islamic banking. Thus, this hypothesis is proven.

scholarly journals DOES CORPORATE GOVERNANCE MATTER FOR ASSET QUALITY OF ISLAMIC BANKS?

2021 ◽  
Vol 24 (2) ◽  
pp. 221-236
Author(s):  
Ejaz Aslam ◽  
Aziz Ur-Rehman ◽  
Anam Iqbal
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Banking Sector ◽  
Policy Implications ◽  
Islamic Banking ◽  
Board Independence ◽  
Islamic Banks ◽  
Asset Quality ◽  
The Impact

This study investigates the impact of corporate governance on asset quality of Islamic banks by employing data on 129 Islamic banks from 29 countries spanning the period from 2008 to 2017. The study shows that asset quality of Islamic banks is positively and significantly sensitive to an increase in board independence, Shariah board, and audit committee effectiveness. The study finds that female participation in management as CEOs seems to detract from good performance and that more board meetings can be harnessed to improve banks’ asset quality. These empirical findings have practical policy implications regarding asset quality management and board construction within the Islamic banking sector.

The Impact of Shariah Governance and Corporate Governance on the Risk Management Practices: Evidence from Local and Foreign Islamic Banks in Malaysia

2018 ◽  
Vol 15 (2) ◽  
pp. 1-20
Author(s):  
Sabri Embi ◽  
Zurina Shafii
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Management Practices ◽  
Principal Component ◽  
T Test ◽  
The Body ◽  
Primary Data ◽  
Islamic Banks ◽  
Shariah Governance ◽  
The Impact

The purpose of this study is to examine the impact of Shariah governance and corporate governance (CG) on the risk management practices (RMPs) of local Islamic banks and foreign Islamic banks operating in Malaysia. The Shariah governance comprises the Shariah review (SR) and Shariah audit (SA) variables. The study also evaluates the level of RMPs, CG, SR, and SA between these two type of banks. With the aid of SPSS version 20, the items for RMPs, CG, SR, and SA were subjected to principal component analysis (PCA). From the PCA, one component or factor was extracted each for the CG, SR, and RMPs while another two factors were extracted for the SA. Primary data was collected using a self-administered survey questionnaire. The questionnaire covers four aspects ; CG, SR, SA, and RMPs. The data received from the 300 usable questionnaires were subjected to correlation and regression analyses as well as an independent t-test. The result of correlation analysis shows that all the four variables have large positive correlations with each other indicating a strong and significant relationship between them. From the regression analysis undertaken, CG, SR, and SA together explained 52.3 percent of the RMPs and CG emerged as the most influential variable that impacts the RMPs. The independent t-test carried out shows that there were significant differences in the CG and SA between the local and foreign Islamic banks. However, there were no significant differences between the two types of the bank in relation to SR and RMPs. The study has contributed to the body of knowledge and is beneficial to academicians, industry players, regulators, and other stakeholders.

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