Corporate Governance and Financial Performance

Abstract

This study aims to examine the effect of corporate governance and Shariah supervision on the performance of Islamic banks in Middle East and North Africa (MENA) countries. The authors applied linear regressions with panel data using the Thomson Reuters ASSET4 database from MENA countries in analyzing data of 90 Islamic banks between 2014 and 2023. The results reveal that Shariah supervision and corporate governance related variables are significant in determining the financial performance of the Islamic banks. This research aims to address a gap in the existing literature on how Shariah supervision impacts the performance of Islamic banks. It suggests adopting corporate governance guidelines in Islamic banks to enhance their current practices. This study contributes to Islamic banking literature in MENA countries which is the most important region of the Islamic financial industry. Furthermore, this research offers deeper insights into the essential role of Shariah supervision in Islamic banks.