Organizational Form and Expense-Preference Behavior: Evidence from Islamic Banks

2012 ◽  
Author(s):  
Majdi Anwar Quttainah
Keyword(s):  
Organizational Form ◽  
Islamic Banks ◽  
Preference Behavior ◽  
Expense Preference Behavior ◽  
Expense Preference

Foreign directors and corporate governance in Islamic banks

2020 ◽  
Vol 11 (3) ◽  
pp. 765-791
Author(s):  
Ali R. Almutairi ◽  
Majdi Anwar Quttainah
Keyword(s):  
Boards Of Directors ◽  
Islamic Banks ◽  
Opportunistic Behavior ◽  
Loan Loss ◽  
Content Type ◽  
Preference Behavior ◽  
Expense Preference Behavior ◽  
Foreign Directors ◽  
The Impact ◽  
Expense Preference

Purpose The purpose of this paper is to examine whether foreign directors’ influence on opportunistic behavior among managers varies between Islamic banks (IBs) and conventional banks (CBs). It also examines how religious ethics and morals guide foreign directors to be better monitors. Design/methodology/approach A panel fixed effects regression is used to analyze the effect of foreign directors on opportunistic behavior among managers in IBs and CBs. The authors use different proxies such as loss avoidance, discretionary loan loss provision and expense preference behavior to measure management opportunistic behavior. Findings Based on sample of 3,758 bank-year observations for 164 banks over the period 1993-2015, the authors show that the presence of foreign directors in IBs increases boards’ effectiveness in impeding management opportunistic behavior, whereas the presence of foreign directors in CBs reduces boards’ effectiveness in curbing management’s unethical acts. The authors also document that IBs (CBs) with foreign directors demonstrate less (more) earnings management and expense-preference behavior among managers. In addition, the authors’ evidence indicates that the existence of the Shari’ah supervisory boards helps foreign directors be more effective monitors. Research limitations/implications The current study focuses on banks only which makes its results subject to sample bias; there are many other forms of financial institutions (e.g. investments, real-estates and mutual funds) complying to the Shari’ah law. Second, owing to the lack of foreign board directors characteristics, the authors cannot investigate the intensity of the specific characteristics that could have specific directions in affecting managerial behavior. Practical implications The findings in this paper may help standards-setters, auditors, investors and regulators take appropriate measures and create better policies that reduce managers’ discretion. This could in turn improve information transparency decision-making, monitoring, advising and accounting quality. Originality/value The authors’ theoretical framework combines the agency, contingency, resource-dependence, stewardship and stakeholders’ theories and applies them to Shari’ah as an alternative ethical and internal governance mechanism. The authors find that the impact of foreign directors on management opportunistic behavior depends on the corporate religious norms within boards of directors, in particular, suggesting that religious values affect how foreign directors influence bank managers’ behavior.

scholarly journals Expense Preference Behavior by Managers in Casino Resorts

2015 ◽  
Vol 23 (2) ◽  
pp. 124-137
Author(s):  
Toni Repetti ◽  
Michael C. Dalbor ◽  
Ashok K. Singh ◽  
Bo J. Bernhard
Keyword(s):  
Preference Behavior ◽  
Expense Preference Behavior ◽  
Expense Preference
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