The Influence of Islamic Corporate Governance on The Performance of Maqashid Sharia in Sharia Banking in Indonesia

Abstract

This study aims to examine the effect of Islamic Corporate Governance (ICG) that consist of Sharia Supervisory Board (SSB) which is measured using education level, ratio of independent commissioners, and board of director meetings on maqashid sharia performance. The population in this study was Islamic Bank listed on the Financial Services Authority (FSA) in 2013-2018 as many as 11 Islamic Banks. The sampling technique used in this study was purposive sampling method and obtained as many as 54 units of analysis. Data collection used documentation technique. The analytical method used in this study was panel data regressions using Eviews 9. The results of the study indicate that Sharia Supervisory Board (SSB) which is measured using education level, ratio of independent commissioners, and board of director meeting of board do not have effect on maqashid sharia performance. The conclusion of this research is that maqashid sharia performance of Indonesian Islamic Bank just 34.138 %, that means maqashid sharia has not been a target priority in Indonesian Islamic Bank. Thus, the factors examined have not been optimized yet for achieving the goal of sharia (maqashid sharia).

Islamic Ethics in Business and Finance: Implication for Corporate Governance and Responsibility

“…Furthermore, studies by Safitri & Mukhibad (2020) and Pranata & Laela (2020) delve into the influence of Islamic Corporate Governance (ICG) components, such as the Sharia Supervisory Board, on the performance of Islamic banks. These studies highlight the significance of board characteristics, including independence, expertise, and adherence to Sharia principles, in driving organizational performance aligned with Maqashid Shariah.…”

Good Corporate Governance dan Kinerja Maqashid Syariah pada Perbankan Syariah Asia Tenggara

“…Stakeholder theory also explains the importance of the existence of parties who contribute to company operations. Stakeholders are a big driver of information disclosure in Sharia banking (Safitri & Mukhibad, 2020).…”

Abu Zahrah’s Maqasid Sharia Model as a Performance Measurement System

“…Considering the urgency of maqasid sharia in directing business players and drive them to promote public welfare, in general, the purpose of this research is to thoroughly explore the theory and practice of maqasid sharia taken from the thought of Muhammad Abu Zahrah. His thinking on maqasid sharia has been widely used by Muslim scholars as a discourse on eva luating Islamic bank's performance (Jazil & Syahruddin, 2015;Muhammad & Shahwan, 2013;Rusdiana & Al Parisi, 2016;Safitri & Mukhibad, 2020;Setiyobono et al, 2019;Siddique, 2019;Syafii et al, 2012;Wijayanti et al, 2020). Three dimensions of maqasid sharia based on Abu Zahrah's thought, in clude educating individuals (tahdhib al-fard), establishing fairness (iqomah al-'adl), and promoting public welfare (jalb al-maslahah).…”

“…Furthermore, this research tests the validity and reliability of the developed measurements and also the effect between the dimensions to ascertain the applicability in Islamic banking practic es. Meanwhile, most of the researchers on maqasid sharia who use Abu Zahrah's mod el replicate the measurement variables from previous studies and directly use them to evaluate the performance of Islamic banking, such as Jazil & Syahruddin (2015), Rusdi ana & Al Parisi (2016), Safitri & Mukhibad (2020), Setiyobono et al (2019), Syafii et al (2012), and Wijayanti et al (2020).…”