Corporate governance of Islamic banks

Grassa, Rihab; Matoussi, Hamadi

doi:10.1108/imefm-01-2013-0001

Cited by 87 publications

(60 citation statements)

References 8 publications

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“…The DPS is also motivated religiously to comply with the function regarding the pursuit of meliorating the efficiency of Sharia banks (Pfeffer & Salancik, 1978). Overall, DPS has high influence on decision making regarding Islamic banks' risk (Farag, Mallin, & Ow-Yong, 2018;Grassa & Matoussi, 2014). and Mollah & Zaman (2015) found that a larger DPS size may lower Islamic banks' risk due to increased oversight ability.…”

Section: Do Corporate and Sharia Compliance Governance Affect Enterprmentioning

confidence: 99%

“…Withal, one of the five pillars of good corporate governance is transparency (Magalhães & Al-Saad, 2013). Transparency of a company can be measured from its disclosure, hence the ERM disclosures are expected to help build a strong governance framework (Grassa & Matoussi, 2014).…”

Section: Introductionmentioning

confidence: 99%

“…Research on ERM and Sharia compliance governance within Indonesia has not been conducted significantly (Claessens, 2006in Grassa & Matoussi, 2014. However, Islamic banks as intermediary institutions that run the principles of bank management using Islamic principles have specificity in governance, because of the existence of Sharia compli-Do corporate and Sharia compliance governance affect enterprise risk management implementation?…”

Section: Introductionmentioning

confidence: 99%

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Do corporate and Sharia compliance governance affect enterprise risk management implementation?

Adelina¹,

Trilaksono²,

Rohi-Mone³

2020

Jurnal Keuangan Dan Perbankan

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The growth of Sharia banking assets in Indonesia greatly influenced by the scalability of Sharia banking businesses, which is supported by an increase in good corporate governance. The banking industry in general functions very closely with risk. This means that banks acutely need a risk-based management approach that is now being developed by the regulator with an integrated approach through Enterprise Risk Management (ERM). Other specific aspects of governance in Sharia banking include governance for compliance with Sharia aspects (Sharia compliance governance). The method used in this study is multiple regression analysis. We intended to examine the influence of general and Sharia governance mechanisms that exist in Indonesian Sharia banking with the level of ERM implementation. We indicated that the presence of the risk management committee, independent audit committee, and Sharia compliance audits positively and significantly affect ERM implementation. This study expected to be beneficial especially to provide input on governance policies for both banks and regulators. AbstrakPertumbuhan aset perbankan syariah di Indonesia sangat dipengaruhi oleh skalabilitas bisnis perbankan syariah, yang didukung oleh peningkatan tata kelola perusahaan yang baik. Industri perbankan pada umumnya berfungsi sangat erat dengan risiko. Ini berarti bahwa bank sangat membutuhkan pendekatan manajemen berbasis risiko yang sekarang sedang dikembangkan oleh regulator dengan pendekatan terintegrasi melalui Enterprise Risk Management (ERM).Aspek spesifik lain dari tata kelola dalam perbankan syariah termasuk tata kelola untuk kepatuhan dengan aspek syariah (tata kelola kepatuhan syariah). Metode yang digunakan dalam penelitian ini adalah analisis regresi berganda. Kami bermaksud menguji pengaruh mekanisme tata kelola umum dan syariah yang ada di perbankan syariah Indonesia dengan tingkat implementasi ERM. Kami menunjukkan bahwa kehadiran komite manajemen risiko, komite audit independen, dan audit kepatuhan syariah secara positif dan signifikan mempengaruhi implementasi ERM. Studi ini diharapkan bermanfaat terutama untuk memberikan masukan tentang kebijakan tata kelola untuk bank dan regulator.

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Section: Do Corporate and Sharia Compliance Governance Affect Enterprmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Do corporate and Sharia compliance governance affect enterprise risk management implementation?

Adelina¹,

Trilaksono²,

Rohi-Mone³

2020

Jurnal Keuangan Dan Perbankan

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“…Findings indicate that role of the Sharia Board in Malaysia and Indonesia do not differ significantly from one another if legislative, business environment conditions and proactive government role are not factored. Grassa and Matoussi (2014) in their paper on "Corporate governance of Islamic banks: A comparative study between GCC and Southeast Asia countries", compared the governance system in GCC countries and Southeast Asia countries using a sample of 83 Islamic banks across four variable -ownership structure, board of directors, Shariah board and CEO attributes. Their study found significant differences in corporate governance structure of IBs in GCC countries and the Southeast Asia countries.…”

Section: Literature Reviewmentioning

confidence: 99%

Composition and Working of the Sharia Supervisory Boards in Bahrain’s Islamic Banks

Kasi

Mahmood

2019

Economy

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The global Islamic finance industry has grown rapidly in the last ten years recording an average growth of over 10 percent and is expected to touch USD 3 trillion by 2020. The Gulf Cooperation Council Countries, Iran and Malaysia; have been central to the success story of the global Islamic finance industry accounting for 83 percent of the market size. Even though Islamic finance covers a wide range of financial service segments, 75 percent of the global Islamic financial assets are held by Islamic Banks, which explains the general notion of equating Islamic finance with Islamic banking. Islamic banking refers to a system of banking, which is consistent and in compliance with Islamic law, also known as Sharia. It is seen as an alternative to western-based banking in Islamic countries. Even though many Islamic countries have in place a Sharia supervisory and governance framework for Islamic banks, it has often been commented that these frameworks are inadequate when it comes to addressing the issues and challenges confronting Islamic banks today. Previous researchers have specifically identified issues concerning the membership and workings of the Sharia Boards as one of the major challenges confronting growth of Islamic banks. The purpose of this paper is to examine and comment on the constitution, composition and functioning of Sharia Boards within Islamic banks based in the Kingdom of Bahrain.

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“…Several researchers have highlighted the difference between conventional and Shari'ah governance. According to Grassa and Matoussi (2014) the governance practices in IFIs must be found in Shari'ah law. Ahmad and Chapra (2002) mentioned that Shari'ah governance emphasises on fairness to all stakeholders by enhancing transparency and accountability which are in line with the teachings of the Shari'ah.…”

Section: Shari'ah Governancementioning

confidence: 99%

Empowering the Shari’ah Committee towards Strengthening Shari’ah Governance Practices in Islamic Financial Institutions

Kasim¹,

Htay²,

Salman³

2016

RES

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The Islamic finance industry is growing at a rapid rate. Its products and services are widely offered all over the world. The ultimate vision of the emergence of Islamic finance industry is to avoid the prohibited practices of conventional financial institutions such as interest, uncertainty, gambling, and investment in prohibited items. If Islamic Financial Institutions (IFIs) manifest by excluding this vision, then they have failed in their mission. Consequently, shari'ah risk, i.e., non-shari'ah compliant risk is the main risk that IFIs must manage to maintain its distinguished status as shari'ah compliant institutions. Shari'ah governance is used as the guideline to mold the operational practices of IFIs to achieve the mission of shari'ah compliance. For this purpose, the shari'ah committee members are the main players for implementing good shari'ah governance practices. However, due to the limited authority of Shari'ah committee members in performing their tasks, IFIs are voluntarily exposed to Shari'ah risk. This paper highlights the current Shari'ah governance problems and proposes that the authority of Shari'ah committee should be enhanced for better Shari'ah governance practices. Problems with current Shari'ah governance practices are mostly due to fatawa variation, non-harmonization of Shari'ah governance practices and products, variance in the four schools of thought, and limited support from IFI management in discharging their full responsibilities such as their involvement in the Shari'ah review process and audit. This paper is set to develop Shari'ah governance guidelines.

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Corporate governance of Islamic banks

Cited by 87 publications

References 8 publications

Do corporate and Sharia compliance governance affect enterprise risk management implementation?

Do corporate and Sharia compliance governance affect enterprise risk management implementation?

Composition and Working of the Sharia Supervisory Boards in Bahrain’s Islamic Banks

Empowering the Shari’ah Committee towards Strengthening Shari’ah Governance Practices in Islamic Financial Institutions

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