Education strategy misfit, board effectiveness and Indonesian Islamic bank performance

Abstract

Purpose This study aims to provide empirical evidence on the contingency factors that affect the implementation of education strategies and the impact of education strategy misfit on the performance and effectiveness of the board’s moderating role on the misfit level and performance of Islamic banks. Design/methodology/approach This research is a quantitative study with pooled ordinary least square panel data during the years 2007-2014 from all Indonesian Islamic commercial banks. Islamic bank performances are measured by the level of profitability and sharia financial performance. Board effectiveness is analysed by measuring the effectiveness of both the board of commissioners (BoC) and the sharia supervisory board (SSB). Findings This study proves that organisational competent qualities and chief executive officer tenure are the contingency factors that affect the implementation of the education strategy. This study’s results indicate that the effectiveness of both the BoC and SSB has a positive impact on the bank’s profitability and sharia financial performance. The results also show that misfit has a negative effect on sharia financial performance and that board effectiveness is proved to reduce the negative impact of a misfit on sharia financial performance. However, there is no strong evidence that board effectiveness reduces the negative impact of a misfit on profitability. Originality/value This study emphasises the importance of enhancing the competence and innovation of organisations in the implementation of education strategy and the need for synergy and increased capabilities among board members to achieve well-established Islamic bank performance.

Board Characteristic, Good Corporate Governance and Maqȃshid Performance in Islamic Banking

“…The results of this study support that of Vafeas (2003), who argued that members of boards of commissioners who had long terms of office may become closer to managers, and as a result their independence in the oversight and development of their duties could be compromised. Wijayanti et al (2020) also found that with regard to successful management of firms based on previous experience, board members with a longer tenure had the tendency to dismiss environmental changes. This result also indicates that the boards of Islamic banks need to draw upon the experience obtained when the banks were still business units.…”

“…In addition, the Maqashid shariah index (MSI) is derived from MSI developed by Mohammed et al (2008), consisting of three maqashid Shariah components of Abu Zahrah, with the control variables of firm size and profit growth added, based on Wijayanti, Diyanty, & Laela, (2020).…”

Instrumen Moneter Dan Belanja Daerah Serta Pengaruhnya Terhadap Pengangguran Terbuka

“…Adapun selain ulasan latar belakang, perlu juga disampaikan metode penelitian yang digunakan pada penelitian ini (Wijayanti et al, 2020). Penelitian ini termasuk dalam penelitian kuantitatif dengan objek penelitian di 8 kabupaten/kota di Jawa Timur dalam periode 2013-2018.…”

“…Penelitian ini termasuk dalam penelitian kuantitatif dengan objek penelitian di 8 kabupaten/kota di Jawa Timur dalam periode 2013-2018. Penelitian kuantitatif menurut Sugiyono adalah penelitian yang dilakukan untuk meneliti populasi atau sampel tertentu, yang mana dalam menggunakan instruman penelitian analisis data yang bersifat kuantitatif atau statistik (Wijayanti et al, 2020).…”

“…Jenis penelitian yang digunakan dalam penelitian ini merupakan jenis penelitian kuantitatif (Wijayanti et al, 2020). Dengan mengambil periode waktu mengambil periode dari tahun 2013 hingga 2018 dan objek penelitian di Provinsi Jawa Timur.…”