The Impact of Corporate Governance on the Financial, Governance and Social Disclosure at Islamic Banks in Malaysia

Marsidi, Asri; Annuar, Hairul Azlan; Rahman, Abdul

doi:10.12816/0051131

Cited by 4 publications

(9 citation statements)

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“…This outcome considered that with elevated governance, whether the institution's performance is poor, the IBs would be committed to conforming to accounting disclosure. The positive power of governance on the FD is consistent with Marsidi et al (2018). This positive association is explicated by the presence of governance, which helps the bank to increase the disclosure standards and to issue protection for shareholders' interests.…”

Section: Empirical Findingssupporting

confidence: 60%

“…It is assumed that IBs with higher board scores should have an effective BOD structure. Marsidi et al (2018) explored the impact of the BOD on financial disclosure (FD) in Malaysia by analyzing 48 annual reports for 12 IBs from 2007 to 2010 and found a significant relationship. This finding signifies that the board needs to secure the carried-out stakeholders' activities.…”

Section: 24mentioning

confidence: 99%

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Further evidence on the effect of financial performance and governance on the Islamic banks' disclosure

Abdallah

Bahloul

2022

AJAR

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PurposeThe purpose of this study is to investigate the effect of financial performance (FP) and governance on the accounting and auditing organization for Islamic financial institutions (AAOIFI) disclosure for the Islamic banks.Design/methodology/approachThe authors used the generalized least squares (GLS) estimation for 47 MENASA (Middle East, North Africa and Southeast Asia) Islamic banks (IBs) between 2012 and 2019. In this regression, disclosure is the endogenous variable. The performance and governance measures are the explanatory parameters. The authors use bank's size, leverage and age for control parameters. The robustness of results is verified via generalized method of moments (GMM) estimation method.FindingsThe findings indicate that performance measurement has weak effects on AAOIFI disclosure. Only the net interest margin (NIM) measure has a significant positive impact. The return of assets (ROA) and the return on equity (ROE) have a significant negative impact. Furthermore, all Shariah Governance measures have significant effects. Finally, the findings of this study support the governance's positive contribution to the disclosure in IBs.Practical implicationsThrough including the whole issues allied to AAOIFI and their impacts on the banks' value, this study provides a significant summary for IBs, policymakers, regulators, AAOIFI and connected authorities across countries. In addition, the findings linked powers between jurisdictions with recommendations on growing the present AAOIFI practices.Originality/valueThis paper offers an original contribution to the accounting professionals and stakeholders who investigate the relationship between disclosure, performance and governance. It is considered as a basis for future studies in the simultaneous relation between these variables. It is crucial for accounting professionals, researchers and stakeholders interesting in the financial disclosure (FD) in IBs.

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Section: Empirical Findingssupporting

confidence: 60%

Section: 24mentioning

confidence: 99%

Further evidence on the effect of financial performance and governance on the Islamic banks' disclosure

Abdallah

Bahloul

2022

AJAR

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“…The study of Isa and Muhammad (2015) also conclude board size is an important factor for voluntary disclosure where larger board size viewed as having more expertise as compared to smaller board. Further, Marsidi et al (2018) suggests that board size is a significant factor to explain the financial and social disclosure among Malaysian Islamic banks. The results of Matuszak et al (2019) also found that board size has a positive significant effect on corporate social related reporting.…”

Section: Board Sizementioning

confidence: 99%

Social Disclosure and Governance Among Malaysian Corporations

Marsidi²

2022

IJBS

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The objective of the study is to examine the relationship between corporate governance mechanisms and corporate social responsibilities (CSR) disclosure among Malaysian leading corporations on Bursa Malaysia. The research is carried out due to the relatively low awareness and inconsistency with respect to the CSR disclosure particularly in Malaysia. The study uses the annual reports and data stream to collect the data of 50 Malaysian top corporations on Bursa Malaysia in 2015. The multivariate analysis suggests that the audit committee expertise and the foreign shareholding have significant relationships with CSR disclosure in Malaysia. In this sense, having a clear understanding on the corporate governance characteristics is perceived as able to increase the disclosure of CSR information to the respected stakeholders. The study therefore contributes to the theories, literature and practice. In this perspective, the study highlights the importance of having a sound corporate governance structure in enhancing CSR information disclosure. In overall, the results of the study can be regarded as valuable to the corporate players, corporations, relevant statutory authorities as well as other related parties.

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“…Because of the specificity of IBs, the AC’s members should have a sound knowledge of the IB’s business environment and industry to achieve AC’s responsibility, and therefore, improve the compliance with AAOIFI’s standards. To our knowledge, only Abdullah et al (2015a, 2015b) and Marsidi et al (2018) have examined the relationship between AC expertise and voluntary disclosure of IBs. Indeed, Marsidi et al (2018) found an insignificant association between AC expertise and voluntary disclosure for IBs in Malaysia.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…To our knowledge, only Abdullah et al (2015a, 2015b) and Marsidi et al (2018) have examined the relationship between AC expertise and voluntary disclosure of IBs. Indeed, Marsidi et al (2018) found an insignificant association between AC expertise and voluntary disclosure for IBs in Malaysia. However, Abdullah et al (2015a, 2015b) proved that AC financial expertise is positively associated with voluntary CG disclosures of IBs in Southeast Asia and the GCC region.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Corporate governance and compliance with AAOIFI governance standards by Islamic banks

Mnif

Tahari

2020

IMEFM

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Purpose This study aims to examine the effect of the main corporate governance characteristics on compliance with accounting and auditing organisation for Islamic financial institutions’ (AAOIFI) governance standards’ (GSs) disclosure requirements by Islamic banks (IB) that adopt AAOIFIs’ standards in Bahrain, Qatar, Jordan, Oman, Syria, Sudan, Palestine and Yemen. Design/methodology/approach The sample consists of 486 bank-year observations from 2009 to 2017. Findings The findings reveal that compliance with AAOIFIs’ GSs’ disclosure requirements is positively influenced by the audit committee (AC) independence, AC’s accounting and financial expertise and industry expertise, auditor industry specialisation, IB’s size and IB’s listing status. On the other hand, it is negatively influenced by the ownership concentration. Research limitations/implications This study has only examined compliance with AAOIFI’s GSs’ disclosure requirements and has focussed on one major sector of the Islamic financial institutions (which is IB). Practical implications The findings are useful for various groups of preparers and users of IBs’ annual reports such as academics and researchers, accountants, management of IBs and some organisations. Originality/value While the study of the AAOIFIs’ standards has grown contemporary with considerable contributions from scholars, however, the majority of these studies are descriptive in nature. Indeed, the existing literature that has explored the determinants of compliance with AAOIFI’s standards is in the early research stage. To the best of the knowledge, there is a paucity of empirical research testing this issue.

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The Impact of Corporate Governance on the Financial, Governance and Social Disclosure at Islamic Banks in Malaysia

Cited by 4 publications

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Further evidence on the effect of financial performance and governance on the Islamic banks' disclosure

Further evidence on the effect of financial performance and governance on the Islamic banks' disclosure

Social Disclosure and Governance Among Malaysian Corporations

Corporate governance and compliance with AAOIFI governance standards by Islamic banks

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