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 A Quantitative Study of the Role Shariah Boards and Bank Ownership Structures Play in Enhancing the Financial Performance of Islamic Banks: A Case of Pakistan

ICR Journal ◽  
2020 ◽  
Vol 11 (2) ◽  
pp. 204-224
Author(s):  
Qaiser Abbas ◽  
Sheila Ainon Yussof ◽  
Muhammad Naeem Anjum
Keyword(s):  
Financial Performance ◽  
Supervisory Board ◽  
Islamic Banking ◽  
Central Feature ◽  
Islamic Banks ◽  
Membership Change ◽  
Supervisory Boards ◽  
Banking Institutions ◽  
Shariah Governance

Shariah governance is a central feature and the second layer of corporate governance for Islamic banks (IBs) and Islamic financial institutions (IFIs). Shariah governance is unique to IBs and IFIs due to their possession of Shariah Supervisory Boards (SSB). SSBs serve to ensure that the management of Islamic banking institutions complies with shariah principles. Shariah governance is not only designed to raise the confidence of investors and the public in terms of authenticity and compliance to Islamic banking practices, but also to minimise the fiduciary and reputational risks of Islamic banking institutions. Due to the importance of shariah governance and the role of SSBs in IBs, this research investigates the role of SSBs in influencing the financial performance of IBs with the moderation role of ownership structure in Pakistan. By using nine years of data (2009-2017) pertaining to three Islamic banks in Pakistan, we found that shariah supervisory board reputations, expertise, cross membership, change in composition, shariah qualification, and ownership have significant moderation relationships with the financial performance of IBs. This study is an attempt to provide a deeper understanding of the role of owners and Shariah Supervisory Boards in enhancing the financial performance of Islamic banks for both researchers and policymakers.

scholarly journals Financial Performance Mediation in the Influence of Islamic Corporate Governance Disclosure on the Islamic Social Reporting

2019 ◽  
Vol 3 (1) ◽  
pp. 75
Author(s):  
Ichsan Setiyo Budi ◽  
Rahmawati Rahmawati ◽  
Falikhatun Falikhatun ◽  
Muthmainah Muthmainah ◽  
Ardi Gunardi
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Social Role ◽  
Secondary Data ◽  
Social Reporting ◽  
Islamic Banking ◽  
Islamic Banks ◽  
The Social ◽  
Annual Reporting ◽  
Report Data

The results of the research on the social role of Islamic banks show inconsistency both domestically and abroad; this is the basis for conducting this research to re-explain the Islamic Corporate Governance (ICG) and Islamic Social Reporting (ISR) relationship, models. This study aims to examine the indirect effect of ICG disclosure on ISR disclosure with financial performance as a mediating variable in Islamic Banking in Indonesia. This study uses secondary data with annual report data sources and financial statements on Islamic banking in Indonesia. They are testing this study using stepwise regression analysis with data for the annual reporting period of 2011 through 2014. The result that financial performance mediates the effect of disclosure of ICG on ISR; this shows that proper management of Islamic banks will produce high financial performance so that they can carry out their social roles well too. The contribution of this study is to develop a new model of the part of financial performance mediating the effect of ICG disclosure on ISR so that it is beneficial for the development of science.

A consensus-based corporate governance paradigm for Islamic banks

2014 ◽  
Vol 6 (1) ◽  
pp. 93-108 ◽  
Author(s):  
Monal Abdel-Baki ◽  
Valerio Leone Sciabolazza
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Banking Sector ◽  
Performance Metrics ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Sustainable Finance ◽  
Market Driven ◽  
The Needy

Purpose – Islamic banking is a viable sustainable banking model that has shown resilience to financial crises. The aim of this research is to design a consensus-based ethical and market-driven corporate governance index (CGI) to boost financial performance and ensure compliance with Islamic rulings. Design/methodology/approach – The design of the CGI is the outcome of the feedback obtained from a cross-country survey to measure bank efforts in enhancing corporate governance (CG) throughout the ten-year period of 2001-2011. The CGI is divided into six core CG themes and 40 sub-themes. Findings – First, the results of the multiple regression analysis show a consistent positive relationship between CG and financial performance metrics. Second, the authors detect misaligned compensation structures for directors. Third, poor governance leads to higher risk exposures. Research limitations/implications – CG in Islamic banks is yet an evolving discipline and infant practice. This research aims to introduce a CGI that should be updated and improved as the discipline evolves. Practical implications – The research concludes by proposing a CG paradigm. The outcome of the research could also be of use to both Islamic banks and to the rapidly growing sustainable banking sector in designing a similar CGI and CG model incorporating the ethical features of sustainable finance. Social implications – The core ethos of Islam are: avoiding the exploitation of the needy, avoiding excessively risky transactions, avoiding unethical transactions and justice, equity and income redistribution. If properly applied, Islamic banking will display all features of sustainable finance as well as enhance social welfare. Originality/value – To the best of the authors' knowledge, this is the first CGI that is based on an ethical and all-inclusive input of all stakeholders.

scholarly journals Pengaruh Islamic Corporate Governance dan Islamic Social Reporting terhadap Kinerja Keuangan Bank Syariah di Indonesia

2021 ◽  
Vol 1 (1) ◽  
pp. 11-20
Author(s):  
Ibnu Trilaksono ◽  
◽  
Agrianti Komalasari ◽  
Chara Pratami Tidespania Tubarad ◽  
Yuliansyah Yuliansyah ◽  
...  
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Commercial Bank ◽  
Banking Sector ◽  
Stock Exchange ◽  
Social Reporting ◽  
Bank Performance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Exchange Contribution

Abstract Purpose: This study examined the effect of Islamic Corporate Governance and Islamic Social Reporting on the Financial Performance of Islamic Banks in Indonesia at Sharia Commercial Bank Companies Listed on the Indonesia Stock Exchange. Research methodology: This study used multiple regression as the method to analyze the result of the research. By using 14 shariah banking data, this research will analyze the performance of the Indonesian general bank. Result: This study indicates that the variables that affect Islamic bank performance in this research are not implemented effectively. Limitations: The sample of this study was only 14 Islamic commercial banks and only used the Islamic banking sector in Indonesia, which is listed on the Indonesia stock exchange. Contribution: This research is helpful for further research. One of the guidelines in choosing which variabels to use and which one to use in the study should be understood in selecting Islamic financial performance.

scholarly journals THE IMPACT OF ISLAMIC CORPORATE GOVERNANCE DISCLOSURE, ISLAMIC INTELLECTUAL CAPITAL, ZAKAT, FINANCIAL PERFORMANCE (SCnP Model) & ISLAMIC ETHICAL IDENTITY TO SUSTAINABLE BUSINESS

2021 ◽  
Vol 8 (2) ◽  
pp. 171
Author(s):  
Yulinda Putri Prativi ◽  
Citra Sukmadilaga ◽  
Cupian Cupian
Keyword(s):  
Corporate Governance ◽  
Content Analysis ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Islamic Banks ◽  
Corporate Disclosure ◽  
Sustainable Business ◽  
Ethical Identity ◽  
The Impact ◽  
Governance Disclosure

ABSTRAKTujuan dari penelitian ini adalah untuk menganalisis dampak Islamic Corporate Governance disclosure, Islamic Intellectual Capital, Zakat, Kinerja Keuangan (SCnP Model), dan Islamic Ethical Identity terhadap Sustainable Business. Penelitian ini menggunakan pendekatan kuantitatif. Data yang dipakai ialah data sekunder dengan teknik pengumpulan data content analysis terhadap annual report 5 bank syariah periode 2015-2019 yang terdapat di negara ASEAN, GCC & MESA. Metode analisis data pada penelitian ini menggunakan regresi linier berganda. Hasil penelitian menunjukkan bahwa (1) Islamic Corporate Disclosure berpengaruh terhadap Sustainable Business, (2) Islamic Intellectual Capital berpengaruh terhadap Sustainable Business, (3) Zakat tidak berpengaruh terhadap Sustainable Business, (4) Kinerja Keuangan (SCnP Model) tidak berpengaruh terhadap Sustainable Business, (5) Islamic Ethical Identity tidak berpengaruh terhadap Sustainable Business. Penelitian ini diharapkan dapat memberikan masukan bagi entitas syariah terutama bank syariah dalam pengembangan aspek kinerja keuangan dan non keuangan serta mengi ngatkan kembali akan  pentingnya konsep sustainable terutama kewajiban dalam penyusunan sustainability reporting.Kata Kunci: Islamic Corporate Governance, Islamic Intellectual Capital, Zakat, Islamic Ethical Identity, Sustainable Business. ABSTRACTThe purpose of this study is to analyze the impact of Islamic Corporate Governance disclosure, Islamic Intellectual Capital, Zakat, Financial Performance (SCnP Model), and Islamic Ethical Identity on Sustainable Business. This study uses a quantitative approach. The data used is secondary data with content analysis data collection techniques on the annual reports of 5 Islamic banks for the 2015-2019 period in ASEAN, GCC & MESA countries. Methods of data analysis in this study using multiple linear regression. The results showed that (1) Islamic Corporate Disclosure has an affects to Sustainable Business, (2) Islamic Intellectual Capital has an effect on Sustainable Business, (3) Zakat has no effect on Sustainable Business, (4) Financial Performance (SCnP Model) has no effect on Sustainable Business , (5) Islamic Ethical Identity has no effect on Sustainable Business. This research is expected to provide input for Islamic entities, especially Islamic banks in developing aspects of financial and non-financial performance as well as reminders of the importance of the concept of sustainability, especially the obligations in preparing sustainability reporting.Keyword: Islamic Corporate Governance, Islamic Intellectual Capital, Zakat, Islamic Ethical Identity, Sustainable Business.

Pursuing triple bottom line sustainability through conscious corporate governance

2019 ◽  
Vol 40 (1) ◽  
pp. 83-107
Author(s):  
BAF Sukhdeo ◽  
CA Arnolds
Keyword(s):  
Corporate Governance ◽  
Global Financial Crisis ◽  
Pearson Correlation ◽  
Correlation Coefficients ◽  
Employee Relations ◽  
Business Practices ◽  
Sustainable Business ◽  
Bottom Line ◽  
Business Sustainability

The role of leaders in the pursuit of business sustainability has grown in relevance since the reported corporate scandals and the global financial crisis of 2008. This study suggests that conscious leadership, which differs from current leadership styles, is needed in order to achieve business sustainability. Using a sample of 371 directors and senior managers from 167 JSE-listed and 54 unlisted companies, the study investigated the role of conscious leadership in the achievement of sustainable business practices. Regression analyses and Pearson correlation coefficients, as well as Cohen’s d effect sizes, were calculated in order to analyse the data.The empirical results revealed that the respondents regarded conscious leadership as an important part of corporate governance, which led the present study to coin the phrase “conscious corporate governance”. The results also showed that conscious corporate governance is positively related to healthy employee relations, and to the achievement of equal opportunities and workforce diversity, but that this kind of governance is negatively related to company profitability. The study explores the implications of these results.

scholarly journals Intellectual Capital and Firm Performance of Listed Firms in Nigeria: Moderating Role of Corporate Governance

2021 ◽  
Vol 10 (1) ◽  
pp. 1-12
Author(s):  
Adesanmi Timothy Adegbayibi
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Investment Strategy ◽  
Governance Mechanism ◽  
Ex Post ◽  
And Performance ◽  
The Relationship ◽  
Moderating Role

The low performance of Nigerian firms despite investment in intellectual capital is a major concern. While studies have shown that corporate governance practices strengthens the subsisting relationship between investment in intellectual capital and performance in the  developed economies, this moderating effect in Nigeria is yet to be adequately explored as research focus is limited to possible effects of intellectual capital and performance. It is against this background, this study investigated the moderating role of corporate governance on the relationship between intellectual capital and performance of listed non-financial companies in Nigeria. The study adopted ex-post facto research design, and data were drawn from the audited annual reports of fifty (50) listed non-financial firms for a period of 2007 to 2017. Multiple regression techniques were employed to test the relationship among the variables. The results of the study revealed that both intellectual capital and corporate governance drive financial performance as the relationship is found significant in all components. The study concluded that corporate governance moderated the effect of investment in intellectual capital on financial performance. The study recommends that Board of directors should adopt measurable corporate governance mechanism which strengthens and helps in investment strategy that increases and improves performance. Also, there is need to entrench corporate governance as a control strategy and impetus towards attaining organization’s goals.

CORPORATE GOVERNANCE DAN NILAI PERSUHAAN: PERAN MODERASI KONSENTRASI INDUSTRI

2017 ◽  
Vol 11 (1) ◽  
pp. 47
Author(s):  
Poh Linawati ◽  
Perminas Pangeran
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Industry Concentration ◽  
Managerial Ownership ◽  
Industrial Concentration ◽  
Chow Test ◽  
Moderating Role

The purpose of this study is to examine the moderating role of industry concentration betweencorporate governance (Board of Commissioners Independent, Managerial Ownership, andInstitusional Ownership) and firm value. Industry concentration classification is calculated by theHerfindahl-Hirschman Index (HHI). In terms of chow test can be concluded that the regressionequation between sub-groups of concentrated industries and less concentrated industries differsignificantly and it shows that the industry concentration is moderating variable.Keywords: Industrial Concentration, Board Of Commissioners Independent, Managerial Ownership,Institusional Ownership, Firm Value.

scholarly journals 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

2019 ◽  
Vol 1 (1) ◽  
pp. 1
Author(s):  
Siti Nur Halimah ◽  
Rahmawati Rahmawati
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Islamic Banking ◽  
Managerial Ownership ◽  
Board Size ◽  
Moderating Variables ◽  
Csr Disclosure ◽  
Corporate Social

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.

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