Good Corporate Governance in Islamic Banking during Fourth  Industrial Revolution Era

Septiani, Delina Herdian; Nurlaela, Linda; Nasim, Arim; Mediawati, Elis

doi:10.47076/jkpis.v5i1.125

Cited by 2 publications

(2 citation statements)

References 12 publications

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“…Noordin & Kassim (2019) found that board members with expertise relevant to their duties and responsibilities as SSBs will positively impact the supervision and implementation of Islamic banks more effectively. Research conducted by Septiani et al (2022) emphasizes that many DPS members were appointed only because of their charisma and popularity in society, not because of their scientific competence in economics and Sharia banking.…”

Section: Resultsmentioning

confidence: 99%

“…However, analysis of the current composition of SSBs within Indonesian Islamic banks reveals a lack of adherence to these ideal criteria (Bayu, 2023;Gati & Basuki, 2020;Septiani et al, 2022;Serly & Oktamirza, 2022). This imbalance in educational background and expertise is mirrored in other jurisdictions like Bahrain, where Hakimi et al (2018) found no standardized criteria for SSB membership.…”

Section: Introductionmentioning

confidence: 99%

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Nexus between Sharia Governance and Financial Performance: Evidence from Indonesian Islamic Banking

Hijriah,

Kholidah,

Alkausar

et al. 2024

SJEKI

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– This study critically evaluates the effectiveness of Islamic governance on the financial performance of Islamic banks in Indonesia. Due to the absence of regulations defining optimal Sharia Supervisory Board (SSB) structure and qualifications, the research explores the empirical relationship between SSB characteristics and financial performance. Using a quantitative approach, the study analyzes data from 14 Islamic banks over a seven-year period (2014-2020). Multiple regression analysis reveals that SSB size, educational background, and financial/accounting expertise have minimal impact on financial performance. Interestingly, cross-membership on SSBs is found to have a negative effect. These findings, coupled with the observation of SSBs often lacking banking and finance backgrounds, suggest a potential disconnect between Sharia governance and managerial activities. The study advocates for clear and comprehensive regulations to strengthen SSB composition and competence, ultimately promoting the sustainable development of Islamic banking in Indonesia.========================================================================================================ABSTRAK – Hubungan Antara Tata Kelola Syariah dan Kinerja Keuangan: Bukti dari Perbankan Syariah Indonesia. Studi ini secara kritis mengevaluasi efektivitas tata kelola Syariah terhadap kinerja keuangan perbankan syariah di Indonesia. Mengingat belum adanya peraturan yang mengatur struktur minimum dan kualifikasi optimal Dewan Pengawas Syariah (DPS), penelitian ini bermaksud mengkaji secara empiris empiris hubungan antara karakteristik DPS dan kinerja keuangan. Dengan menggunakan pendekatan kuantitatif, penelitian ini menganalisis data dari 14 bank Islam selama tujuh tahun (2014-2020). Hasil analisis regresi berganda menunjukkan bahwa ukuran DPS, latar belakang pendidikan, dan keahlian keuangan dan akuntansi kurang memiliki dampak terhadap kinerja keuangan perbankan syariah. Menariknya, cross-membership pada DPS ditemukan memiliki efek negatif. Temuan ini, ditambah dengan pengamatan terhadap DPS yang seringkali tidak memiliki latar belakang perbankan dan keuangan, menunjukkan potensi keterputusan antara tata kelola Syariah dan aktivitas manajerial. Studi ini merekomendasikan adanya peraturan yang jelas dan komprehensif untuk memperkuat komposisi dan kompetensi DPS, yang pada akhirnya mendorong pengembangan bank syariah yang berkelanjutan di Indonesia.

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Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Nexus between Sharia Governance and Financial Performance: Evidence from Indonesian Islamic Banking

Hijriah,

Kholidah,

Alkausar

et al. 2024

SJEKI

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Does Shari’ah supervisory board characteristics affect Islamic banks’ financial performance? Evidence from Saudi Arabia

Bashir,

Edris,

Muslichah

2023

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Shari’ah (Islamic law) governance has drawn considerable interest in the past few decades in an effort to enhance the outcomes and prolonged success of banks that follow the Islamic banking system. There is widespread awareness that Shari’ah governance enhances public trust in the integrity, management, and business functioning of Islamic banks and prevents any financial crisis that could affect the performance of banks. The current study has a primary objective to analyze the influence of Shari’ah Supervisory Board (SSB) characteristics upon the financial performance of the banks that follow the Islamic banking system in the Kingdom of Saudi Arabia (KSA) based on features possessed by the SSB. The data considered for the period spans between 2013 and 2022 and focuses on four fully-fledged Islamic banks operating in the KSA. The Authors collected the annual reports of the banks to extract the financial data and analyzed it under descriptive statistical analysis. Further, an ordinary least square regression model was also applied in this study. The analytical outcomes reveal that the independence and the experience of the Shari’ah board exert a remarkable influence on the financial performance of the Islamic banks whereas the size of the Shari’ah board has no significant influence to note. The study suggests that the Saudi Central Bank (SAMA) should accelerate the incorporation of the Shari’ah governance framework in the banks that follow the Islamic banking system. Therefore, there is an urgent need to establish a central SSB to coordinate the efforts of the committees of Saudi local banks and provide the necessary technical assistance for implementing optimal Shari’ah governance practices

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Good Corporate Governance in Islamic Banking during Fourth Industrial Revolution Era

Cited by 2 publications

References 12 publications

Nexus between Sharia Governance and Financial Performance: Evidence from Indonesian Islamic Banking

Nexus between Sharia Governance and Financial Performance: Evidence from Indonesian Islamic Banking

Does Shari’ah supervisory board characteristics affect Islamic banks’ financial performance? Evidence from Saudi Arabia

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