Shariah Governance Characteristics and Risk-taking of Local and Foreign Islamic Banks in Malaysia: A Conceptual Model

Rasli, Salina; Kassim, Aza Azlina Md

doi:10.26710/jafee.v5i2.856

Cited by 5 publications

(9 citation statements)

References 22 publications

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“…The results demonstrate that a sizeable bank improves ROA and improves its reasonable worth. Size is significant because large banks are in an ideal situation to increase their performance by guaranteeing better usage of their considerable assets [70,71]. Subsequently, financial investors favor large banks that expand their market worth.…”

Section: Resultsmentioning

confidence: 99%

Evaluating Corporate Performance and Bank Productivity in China: The Moderating Role of Independent Directors

Khan

Wang

2021

Sustainability

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Corporate governance (CG) is not an abstract goal. It exists to serve the bank’s purpose by giving a framework through which investors, directors, and the top management can efficiently follow its objectives. Subsequently, it boosts the financial performance of the bank for its shareholders. This paper explores CG and its impacts on financial performance from the evidence collected from selected commercial banks (CB) in China. The data sample for this research comprises selected CBs in China for the period from 2008 to 2019. Applying selection standards provides us a data sample of 17 CBs. We employed the generalized method of moments (GMM) regression model constructed on 170 observations to identify the variables’ relationship. Our findings show that female independent directors positively and significantly affect bank financial performance. Despite the literature review, we found that the existence of female directors alone does not positively and significantly improve banks’ financial performance. The finding suggests that female directors are more efficient when they are selected as independent directors. The findings show that CEO duality affects bank financial performance positively and significantly. CEO duality strengthens the financial performance of CBs because of the solidarity of the order it presents. The results also show that CEO shareholding and financial performance of Chinese CBs have a positively significant bond with each other. This result suggests that a blend of CG instruments is more impressive than one CG component. The investigation results added a new dimension to the governance literature that could be an important source of knowledge for policymakers and regulators to improve the current governance structure for better performance across countries. This paper support principal-agent theory and the author also provide some help for the theories that regulators should support gender quotas in the board of directors of banks to decrease risk-taking behavior.

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Section: Resultsmentioning

confidence: 99%

Evaluating Corporate Performance and Bank Productivity in China: The Moderating Role of Independent Directors

Khan

Wang

2021

Sustainability

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“…More specifically, a composite measure (score) was created to test if there is an aggregate influence of board effectiveness metrics on financial performance. The measurement of board effectiveness score follows previous studies (Makhlouf et al , 2017; Mathew et al , 2020; Rasli et al , 2020). This method is built on the notion that the effectiveness of boards may be achieved via different channels and that a particular mechanism’s effectiveness may depend on the effectiveness of other mechanisms (Davis and Useem, 2002).…”

Section: Findings and Discussionmentioning

confidence: 99%

“…To measure governance quality, an aggregate index is found to be more accurate than single indicators (Rasli et al , 2020). For this reason, this paper measures SCQ using six Shariah board attributes (Shariah committee expertise, multi-committee membership, qualification of Shariah committee members, Shariah committee size, Shariah committee meeting frequency and Shariah committee gender diversity).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Moderating role of Shariah committee quality on relationship between board of directors effectiveness and the performance of Malaysian Takaful

Eldaia

Hanefah

Marzuki

2022

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Purpose The purpose of this study is to examine the effect of Board of Directors Effectiveness (BODE) on the performance of Malaysian Takaful companies licensed by the Central Bank of Malaysia. In addition, the study investigates the moderating effect of Shariah Committee Quality (SCQ) on the relationship between BODE and companies’ performance. Design/methodology/approach This study uses a sample of 11 Malaysian Takaful companies during the period of 2010-2017. While BDE and SCQ are measured using indices, performance is proxied using ROA and ROE. A panel fixed effect regression analysis is used to test the impact of the BDE on the financial performance of Malaysian Takaful companies and the moderator role of SCQ. Findings The main finding of this study shows a positive association between BDE and performance. More specifically, boards with a high presence of independent, Muslim and female directors positively contribute to the performance of Malaysian Takaful companies. Another interesting finding is related to the positive moderating effect of SCQ on the relationship between BDE and performance. This result indicates that a high level of SCQ combined with a high level of board effectiveness improve performance. Practical implications The finding is of great importance to stakeholders and policymakers to improve their board effectiveness and the quality of the Shariah committee to reduce agency costs and to improve the performance of Malaysian Takaful companies. Originality/value This study adds to the prior literature by investigating for the first time the relationship between BDE and performance and the interaction effect of SCQ on the performance of Malaysian Takaful companies.

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“…As per the research study by Jozsef Varga et al ( 2020), the most important element of CAMEL analysis is ROA, which shows how much earning one unit of investment gives. According to Salina Rasli et al (2020), earnings quality (EQ) is subjected to the effectiveness and efficiency of assets and liabilities management of an institution. The earnings performance' increase should attract stakeholders' confidence, such as depositors, investors, creditors, and the public.…”

Section: E Capital Adequacy Ratio (Car)mentioning

confidence: 99%

Transparency and Performance of Islamic Banking the Implications for Profit Distribution (Empirical Study of Indonesia and Malaysia)

Utami

2023

FJST

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The objective of this paper is to assess the effect of transparency and performance on the distribution of profits in Islamic banks in Indonesia and Malaysia. This study employed content analysis of published annual reports as well as multiple regression analysis. Samples were taken using the purposive sampling technique. The results of the analysis showed that both transparency and performance simultaneously have a positive effect on profit distribution, but partially only transparency has an effect on profit distribution. This could be due to the fact that in Indonesia and Malaysia, Islamic banks operate in a dual banking system where both conventional and Islamic banks coexist. These banks compete with each other for deposit shares.

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Shariah Governance Characteristics and Risk-taking of Local and Foreign Islamic Banks in Malaysia: A Conceptual Model

Cited by 5 publications

References 22 publications

Evaluating Corporate Performance and Bank Productivity in China: The Moderating Role of Independent Directors

Evaluating Corporate Performance and Bank Productivity in China: The Moderating Role of Independent Directors

Moderating role of Shariah committee quality on relationship between board of directors effectiveness and the performance of Malaysian Takaful

Transparency and Performance of Islamic Banking the Implications for Profit Distribution (Empirical Study of Indonesia and Malaysia)

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