Monitoring and Efficiency in Governance: A Measure for Sustainability in the Islamic Banking Industry

Abstract

Corporate governance is a set of rules, regulations, procedures, processes, and practices through which an organization is controlled and directed. The present study aimed to examine the monitoring methods used in Islamic banking, including standardized measures for better performance, an individual’s aptitude towards Islamic financial markets, risk propensity, and the level of efficiency of the Islamic banking industry in Pakistan and Malaysia. There is room to improve monitoring systems for Islamic banking operations and standardized measures could improve efficiency, leading to more sustainable performance. The study uses a self-developed semi-structured scale based on literature and expert interviews, after content and context validity to gain a wide range of diverse information. In Pakistan and Malaysia, individuals’ perceptions are different because of differences in the banking environment and preferences. Eventually, the Islamic banking growth rate may differ in Pakistan and Malaysia. Thus, there should be regular monitoring to improve banking performance. Similarly, standardized measures for Islamic banking operations and governance performance in Pakistan and Malaysia will result in more sustainable performance. The antecedents of Islamic corporate governance could be improved to enhance banking performance, which helps individuals make decisions based on available product information. The business growth of the banking industry is based on convenient monitoring policies, standardized performance measures, and, most importantly, excellent corporate governance mechanisms. Improved monitoring measures will further enhance these business operations.

A bibliometric analysis of Islamic banking sustainability: a study based on Scopus scientific database

“…CG is a set of processes, regulations and laws that regulate how a company is directed, managed and controlled (Sulaiman et al, 2015), and promote transparency and fairness (Zimmerli et al, 2007). Research trends on CG such as CG disclosure in Islamic banking (Sulaiman et al, 2015); an Islamic CG framework to measure sustainability performance (Jan et al, 2021a(Jan et al, , 2021b; integrating sustainability practices into Islamic CG (Jan et al, 2022a(Jan et al, , 2022b; and monitoring and efficiency in governance (Awais et al, 2022). In summary, banking performance could be improved by enforcing Islamic CG norms.…”

“…, 2021a, 2021b); integrating sustainability practices into Islamic CG (Jan et al. , 2022a, 2022b); and monitoring and efficiency in governance (Awais et al. , 2022).…”

“…Then Awais et al. performed comparative research on monitoring policies, standardized performance measurements and CG mechanisms between Pakistan and Malaysia to assess the sustainable performance of Islamic banking industries (Awais et al. , 2022).…”

“…Jan et al measured the impact of sustainability practices in Islamic banking on the financial performance of Islamic banking (Jan et al, 2018) and SDGs (Jan et al, 2021a(Jan et al, , 2021b. Then Awais et al performed comparative research on monitoring policies, standardized performance measurements and CG mechanisms between Pakistan and Malaysia to assess the sustainable performance of Islamic banking industries (Awais et al, 2022). This cluster is also connected to Muhammad and Nugraheni's research on the case study of the sustainability of Islamic banking human resources in Indonesia for higher education (Muhammad and Nugraheni, 2022).…”

Uncovering Trends and Research Gaps in Corporate Governance and Islamic Finance

“…The confluence of corporate governance and Islamic finance has emerged as a focal point of scholarly inquiry, attracting substantial attention from researchers across the globe (Samra, 2016;Awais et al, 2022& Issa et al, 2022. There have been several previous studies that have examined the intersection of corporate governance and Islamic finance.…”