Corporate Governance and Performance of Shariah-Compliant Companies (original) (raw)
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2018
An increase in the number of Shariah-compliant companies in Malaysia has greatly contributed to stabilising the Islamic Capital Market (ICM). The aim of this study is to examine the nature and extent of Islamic Social Reporting (ISR) practices among Shariah-compliant companies listed on the ACE Market in Malaysia. The study also examines the potential existence of a relationship between corporate governance attributes and ISR. The study focuses on four attributes of corporate governance: Shariah supervisory board size, Audit quality, Audit committee and Muslim ownership. A sample was selected comprising 53 Shariah-compliant companies listed on the ACE Market of Bursa Malaysia during the three-year period of 2015–2017. The study uses content analysis, with ISR coded according to a modified Islamic Social Disclosure Index. The results show significant relationships between the corporate governance attributes of board size, audit quality and audit committee, and ISR. This may reflect t...
Explicating the Corporate Governance Mechanisms of Shariâah Compliant Companies
International Journal of Academic Research in Business and Social Sciences, 2018
The paper attempts to assess and examine the disclosure of the mechanisms of the corporate governance (CG), namely, board matters, nomination matters, audit matters, remuneration matters, communication matters, and risk management matters, of Shari'ah Compliant Companies (ShCCs) for a six-year period from 2008 until 2013. By using the weighted disclosure analyses approach, CG index was developed. The study examines the annual reports of a sample of 1,122 ShCCs which was selected based on the top 500 firms (by market capitalisation) for 2008 until 2013. In this study, SPSS was applied to assess the CG disclosure. Based on the descriptive analysis, the result indicates a remuneration matters (mean: 0.55) score higher than the other mechanisms; this was followed by audit matters (mean: 0.49). The study also found that, the average disclosure level of ShCCs was relatively low. Hence, the result has important implications for the enhancement of the CG disclosure of ShCC for a wider acceptance and reputation enhancement.
Banks and Bank Systems
This research aims to examine the correlation between the Sharia Supervisory Board (SSB) and corporate governance in terms of the performance of Islamic banks’ Profit-and-Loss Sharing (PLS) ratio, zakah performance and non-halal income ratio, and to analyze the relationship between risk and income for both PLS and murabahah financing and the PLS financing ratio. Non-halal income is a bank’s income that is not in accordance with Sharia law. The object of this research was a sample of eleven commercial Islamic banks in Indonesia. The data are collected from each bank’s annual report and corporate governance statement, for 2009–2016. This study uses the multiple regression analysis method. The results show that: The size and educational background of the SSB has a significant and positive effect on the zakah performance (Islamic tax), and has a negative effect on the ratio of non-halal income. The size and educational background of the SSB has no impact on the PLS financing ratio. Corp...
Corporate governance and Shariah non-compliant risk in Islamic banks: evidence from Southeast Asia
Corporate Governance: The International Journal of Business in Society
Purpose This study aims to investigate the relationship between corporate governance and Shariah non-compliant risk (SNCR) that is unique for Islamic banks. The study examines the roles of Shariah committee along with the board of directors in mitigating SNCR. Design/methodology/approach The paper empirically investigates the implications of characteristics of board of directors and Shariah committee on the SNCR by using a sample of 29 full-fledge Islamic banks from Malaysia and Indonesia over the period 2007-2017. All data is hand collected from the Islamic banks' annual reports with the exception of country-level data collected from the World Bank database. Findings The results show that banks with a smaller board size and higher proportion of independent board members are likely to have lower SNCR. The findings also indicate that the financial expertise and higher frequency of Shariah committee meetings reduces the SNCR. Collectively, the analysis shows that banks with strong...
Accounting Analysis Journal, 2020
This study aims to examine the effect of Islamic Corporate Governance (ICG) that consist of Sharia Supervisory Board (SSB) which is measured using education level, ratio of independent commissioners, and board of director meetings on maqashid sharia performance. The population in this study was Islamic Bank listed on the Financial Services Authority (FSA) in 2013-2018 as many as 11 Islamic Banks. The sampling technique used in this study was purposive sampling method and obtained as many as 54 units of analysis. Data collection used documentation technique. The analytical method used in this study was panel data regressions using Eviews 9. The results of the study indicate that Sharia Supervisory Board (SSB) which is measured using education level, ratio of independent commissioners, and board of director meeting of board do not have effect on maqashid sharia performance. The conclusion of this research is that maqashid sharia performance of Indonesian Islamic Bank just 34.138 %, th...
Ceo Characteristics and Corporate Performance of the Malaysian Shariah- Compliant Companies
2018
This study attempts to examine the relationship between the CEO characteristics and the corporate performance of the Malaysian companies. These CEO characteristics are supported by the upper echelons theory and accountability theory. The findings reveal that the concentration of power in a single hand and the CEO with vast experiences are unable to provide gratification on the firm performance. However, CEO gender, ethnicity and tenure are positively linked to the economic performance. Ways forward and limitation have been further discussed.
Monther Eldaia, 2020
This study examines the impact of corporate governance mechanisms on the performance of firms in Jordan. Giving particular attention to diversity in the board of directors and audit committee, this study looks into the impact of Muslim directors on the board of directors (BoD) and audit committee (AC) on performance. Overall, 76-panel data were used, which were obtained from published annual reports of industrial and service sectors from the Amman Stock Exchange from 2012 to 2018. A fixed-effect model was used to test various hypotheses of the study. Both accounting-based (ROA and ROE) and market-based (Tobin's Q) performance measures were tested. which, as yet, only a handful of studies have been conducted. The findings showed that the relationships between Muslim directors on the board have an insignificant effect on ROA and ROE. Conversely, Muslim director in AC has a positive but insignificant relationship with ROA and ROE. Concerning the relationship with Tobin's Q, the findings showed that Muslim directors on the board have an insignificant relationship with Tobin's Q. Moreover, the findings showed that Muslim directors in AC have an insignificant positive relationship with Tobin's Q. This study provides useful information that is of great value to policymakers, academics, and other stakeholders. This study fills the gap and contributes significantly to the literature by proving extensive findings with regards to the impact of corporate governance on firms 'performance especially the presence of Muslim directors in BoD and AC in Jordan.