Shariah board and the performance of Islamic banks

Haron, Razali and Radzali, Nur Ermiedza (2021) Shariah board and the performance of Islamic banks. In: International Research Conference on Shariah Compliant Industries (IRCSI), 9th-11th February 2021, Kuala Lumpur.

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Abstract

This study examines the impact of Shariah Board (SB) characteristics and BOD structure on the performance of Islamic banks in Malaysia based on three performance measurements: Zakat over Asset, Return on Asset (ROA), and Return on Equity (ROE). This study covers 15 Islamic banks in Malaysia for a study period from 2010 to 2018 consisting of the pre and post implementation of the Islamic Financial Services Act (IFSA) 2013. General Method of Moments (GMM) is employed to determine how SB characteristics and BOD structure affect the performance of Islamic banks based on Zakat over Asset, ROA and ROE. This study finds Board size, SB education, SB reputation, and SB expertise are positively related to Islamic banks’ performance whereas, Board independence, SB remuneration, and SB cross membership are negatively related to Islamic banks’ performance. Board remuneration and SB size are insignificantly related to Islamic banks’ performance in all models. It was also discovered that IFSA (2013) is negatively related to ROE despite the arguments that the Act has strengthened Shariah governance framework. This study contributes to the existing literature by incorporating board and SB Remuneration in addition to other SB characteristics. The effect of IFSA (2013) on the performance of Islamic banks in Malaysia is also tested in this study.

Item Type:	Conference or Workshop Item (Invited Papers)
Additional Information:	4581/88580 - Online through YouTube
Uncontrolled Keywords:	Shariah Governance, Banks, Islamic, Malaysia, Performance, IFSA 2013
Subjects:	H Social Sciences > HG Finance H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Dr. Razali Haron
Date Deposited:	30 Mar 2021 13:25
Last Modified:	30 Mar 2021 13:31
URI:	http://irep.iium.edu.my/id/eprint/88580

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