The Role of Board of Commissioners in Islamic Social Reporting

Abstract

This research aims to investigate how the board of commissioners plays a role in influencing Islamic social reporting. The object of this study was the disclosure of Islamic social reporting in sharia banking in Indonesia, through secondary data. Data were analyzed using multiple linear regression analysis. The findings showed the role of the board of commissioners in influencing the extent of Islamic social reporting disclosure more likely through the size of the board of commissioners, not through an independent board of commissioners or the number of board meetings. Researchers found that challenge of a great opportunity for the board of commissioners to contribute to social responsibility of companies in accordance with the provisions of Islam. Keywords: Islamic social reporting, board of commissioners, sharia banks Peran Dewan Komisaris dalam Islamic Social ReportingAbstrak: Penelitian ini bertujuan untuk mengetahui peran dewan komisaris dalam mempengaruhi Islamic social reporting. Objek penelitian ini adalah pengungkapan Islamic social reporting pada perbankan syariah di Indonesia, melalui data sekunder. Analisis data menggunakan analisis regresi linier berganda. Temuan menunjukkan bahwa peran dewan komisaris dalam mempengaruhi pengungkapan Islamic social reporting cenderung melalui ukuran dewan komisaris, bukan melalui dewan komisaris independen atau jumlah rapat dewan. Peneliti menemukan bahwa terdapat tantangan yang menjadi peluang besar bagi dewan komisaris untuk berkontribusi pada tanggung jawab sosial perusahaan sesuai dengan ketentuan Islam.Kata kunci: Islamic social reporting, board of commissioners, bank syariah

Corporate governance and Islamic social reporting: Indonesia Islamic banking development roadmap era

“…The existence of the Board of Commissioners is expected to encourage good supervision, especially during the Islamic banking development era. This study result contradicts the results of the studies conducted by Ifada et al (2021) and Indrawaty and Wardayati (2016) which suggest that the Board of Commissioners has an effect on ISR. However, this study aligns with the research of Lidyah et al (2019) which argues that the size of the Board of Commissioners has no effect on ISR.…”

“…Therefore, the second hypothesis which states that independent commissioners have a positive effect on ISR is not supported. This study is aligned with the research conducted by Ifada et al (2021) which found that independent commissioners had no effect on ISR. However, this study contradicts the research of Sulistyawati and Indah (2017) which shows that independent commissioners have a positive effect on ISR disclosure.…”

“…The ratio used to measure the disclosure in ISR was the number of disclosures divided by the maximum number of disclosures, as was done by Santoso and Dhiyaul-Haq (2017) and Sarea and Salami (2021). The independent variable of this study is corporate governance that consists of; the size of the Board of Commissioners (COM) (Ifada et al, 2021), the proportion of Independent Commissioners (CIND) derived from the number of independent commissioners divided by the number of commissioners as (Sherif El-Halaby & Hussainey, 2016;Hasani & Muhammad, 2022), the frequency of Board of Commissioners Meetings (CMEET) (Ifada et al, 2021), the size of Audit Committee (CA) (Mayliza & Yusnelly, 2021), the frequency of Audit Committee Meetings (CAMEET) (Mayliza & Yusnelly, 2021), the size of Sharia Supervisory Board (SSB) (Alsartawi, 2019;Grassa & Matoussi, 2014;Mukhibad et al, 2022), and the frequency of Sharia Supervisory Board Meetings (SSBMEET) (Alsartawi, 2019;Grassa & Matoussi, 2014).…”

“…The research of Santoso and Dhiyaul-Haq (2017) used the codification by adopting the research results of Haniffa (2002), Haniffa and Hudaib (2007), and Othman et al (2009) with several adjustments, however, it only focused on profitability, award, and type of ownership. Additionally, some research investigated the determinants of ISR -without codification (Santoso & Dhiyaul-Haq 2017); commissioners (Ifada et al, 2021;Khoirudin, 2013); independent commissioner (Ifada et al, 2021), Board of Commissioners meetings (Ifada et al, 2021), Sharia Supervisory Board (SSB) (Mukhibad, 2018;Mukhibad et al, 2022), and SSB meetings (Alsartawi, 2019;Grassa & Matoussi, 2014). Moreover, Mayliza and Yusnelly (2021) show that audit committee and audit committee meetings do not affect ISR even though the audit committee is part of the supervisory structure of a company (Ditta & Setiawan, 2019).…”

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

“…Moreover, the research by Ifada et al (2021) and Aisyah et al (2022) sheds light on the role of the board of commissioners in influencing Islamic social reporting and financial performance in Islamic banks. The expertise and composition of the board of directors are crucial factors in enhancing financial performance and ensuring adherence to Islamic ethical standards.…”