The Effect of the Level of Disclosure of Islamic Corporate Governance on Financial Performance at Indonesian Sharia Banks
Keywords:
Islamic Corporate Governance, Financial Performance, Islamic Banking
Abstract
The aim of this study was to analyze the effect of Islamic Corporate Governance Disclosure on financial performance in Indonesia. This disclosure encompasses various dimensions, including the board of directors, Sharia supervisory board, board committee, internal control, internal audit, and risk audit. The disclosure of Islamic Corporate Governance is crucial as it offers insights into how the financial performance of Islamic banks is managed, identifies the responsible managers, and outlines the steps taken in the management process. This research adopts an explanatory approach. The data utilized consists of secondary data spanning 2012 to 2020, gathered from 12 periodically selected Islamic commercial banks in Indonesia. The analysis method employed is content analysis, which derives disclosure values based on survey results. The results of this research contribute to the space and realm of knowledge development, particularly in relation to the advancement of theories or concepts regarding Islamic values in the implementation of Sharia banking activities.
References
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Archer, S., Karim, R. A. A., & Al-Deehani, T. (1998). Financial contracting, governance structures and the accounting regulation of Islamic banks: An analysis in terms of agency theory and transaction cost economics. Journal of Management and Governance, 2(2), 149–170.
Arouri, H., Hossain, M., & Muttakin, M. B. (2011). Ownership structure, corporate governance and bank performance: Evidence from GCC countries. Corporate Ownership and Control, 8(4 D), 365–372.
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Darmadi, S. (2013). Corporate governance disclosure in the annual report: An exploratory study on Indonesian Islamic banks. Humanomics, 29(1), 4–23.
Ginena, K. (2014). Sharī‘ah risk and corporate governance of Islamic banks. Corporate Governance (Bingley), 14(1), 86–103.
Hameed, S., Wirman, A., Alrazi, B., Nazli, M., & Pramono, S. (2004). Alternative Disclosure & Performance Measures For Islamic Banks. Second Conference on Administrative Sciences: Meeting the Challenges of the Globalization Age, King Fahd University of Petroleum & Minerals, Dhahran, Saudi Arabia, 1–37.
Harisa, E., Adam, M., & Meutia, I. (2019). Effect of Quality of Good Corporate Governance Disclosure, Leverage and Firm Size on Profitability of Islamic Commercial Banks. International Journal of Economics and Financial Issues, 9(4), 189–196.
Hasan, Z. (2009). Corporate Governance: Western and Islamic Perspectives. International Review of Business Research Papers, 5(1), 277–293.
Jan, A., Marimuthu, M., Hassan, R., & Mehreen. (2019). Sustainable business practices and firm’s financial performance in Islamic banking: Under the moderating role of Islamic corporate governance. Sustainability (Switzerland), 11(23), 1–25.
Khan, I., & Zahid, S. N. (2020). The impact of Shari’ah and corporate governance on Islamic banks performance: evidence from Asia. International Journal of Islamic and Middle Eastern Finance and Management, 13(3), 483–501.
Khanifah, K., Hardiningsih, P., Darmaryantiko, A., Iryantik, I., & Udin, U. (2020). The effect of corporate governance disclosure on banking performance: Empirical evidence from Iran, Saudi Arabia and Malaysia. Journal of Asian Finance, Economics and Business, 7(3), 41–51.
Lassoued, M. (2018). Corporate governance and financial stability in Islamic banking. Managerial Finance, 44(5), 524–539.
Spence, M. (1973). I shall argue that the paradigm case of the market with this type of informational structure is the job market and will therefore focus upon it. The Quarterly Journal of Economics, 87(3), 355–374.
Umam, S. F. M., & Ginanjar, Y. (2020). Pengaruh Dewan Pengawas Syariah dan Proporsi Dewan Komisaris Independen Terhadap Kinerja Keuangan Perbankan Syariah Indonesia. Ekonomi Syariah Dan Bisnis, 3(1), 72–80.
Utami, R., & Yusniar, M. W. (2020). Pengungkapan Islamic Corporate Social Responsibility (Icsr) Dan Good Corporate Governance (Gcg) Terhadap Nilai Perusahaan Dengan Kinerja Keuangan Sebagai Variabel Intervening. EL Muhasaba Jurnal Akuntansi, 11(2), 162–176.
Al-Baidhani, A. (2015). The Effects of Corporate Governance on Bank Performance: Evidence from the Arabian Peninsula. Ahmed Mohsen Al-Baidhani CPA, MBA, PhD Candidate Putra Business School, Universiti Putra Malaysia, 1–31.
Archer, S., Karim, R. A. A., & Al-Deehani, T. (1998). Financial contracting, governance structures and the accounting regulation of Islamic banks: An analysis in terms of agency theory and transaction cost economics. Journal of Management and Governance, 2(2), 149–170.
Arouri, H., Hossain, M., & Muttakin, M. B. (2011). Ownership structure, corporate governance and bank performance: Evidence from GCC countries. Corporate Ownership and Control, 8(4 D), 365–372.
Bhat, G., Hope, O. K., & Kang, T. (2006). Does corporate governance transparency affect the accuracy of analyst forecasts? Accounting and Finance, 46(5), 715–732.
Darmadi, S. (2013). Corporate governance disclosure in the annual report: An exploratory study on Indonesian Islamic banks. Humanomics, 29(1), 4–23.
Ginena, K. (2014). Sharī‘ah risk and corporate governance of Islamic banks. Corporate Governance (Bingley), 14(1), 86–103.
Hameed, S., Wirman, A., Alrazi, B., Nazli, M., & Pramono, S. (2004). Alternative Disclosure & Performance Measures For Islamic Banks. Second Conference on Administrative Sciences: Meeting the Challenges of the Globalization Age, King Fahd University of Petroleum & Minerals, Dhahran, Saudi Arabia, 1–37.
Harisa, E., Adam, M., & Meutia, I. (2019). Effect of Quality of Good Corporate Governance Disclosure, Leverage and Firm Size on Profitability of Islamic Commercial Banks. International Journal of Economics and Financial Issues, 9(4), 189–196.
Hasan, Z. (2009). Corporate Governance: Western and Islamic Perspectives. International Review of Business Research Papers, 5(1), 277–293.
Jan, A., Marimuthu, M., Hassan, R., & Mehreen. (2019). Sustainable business practices and firm’s financial performance in Islamic banking: Under the moderating role of Islamic corporate governance. Sustainability (Switzerland), 11(23), 1–25.
Khan, I., & Zahid, S. N. (2020). The impact of Shari’ah and corporate governance on Islamic banks performance: evidence from Asia. International Journal of Islamic and Middle Eastern Finance and Management, 13(3), 483–501.
Khanifah, K., Hardiningsih, P., Darmaryantiko, A., Iryantik, I., & Udin, U. (2020). The effect of corporate governance disclosure on banking performance: Empirical evidence from Iran, Saudi Arabia and Malaysia. Journal of Asian Finance, Economics and Business, 7(3), 41–51.
Lassoued, M. (2018). Corporate governance and financial stability in Islamic banking. Managerial Finance, 44(5), 524–539.
Spence, M. (1973). I shall argue that the paradigm case of the market with this type of informational structure is the job market and will therefore focus upon it. The Quarterly Journal of Economics, 87(3), 355–374.
Umam, S. F. M., & Ginanjar, Y. (2020). Pengaruh Dewan Pengawas Syariah dan Proporsi Dewan Komisaris Independen Terhadap Kinerja Keuangan Perbankan Syariah Indonesia. Ekonomi Syariah Dan Bisnis, 3(1), 72–80.
Utami, R., & Yusniar, M. W. (2020). Pengungkapan Islamic Corporate Social Responsibility (Icsr) Dan Good Corporate Governance (Gcg) Terhadap Nilai Perusahaan Dengan Kinerja Keuangan Sebagai Variabel Intervening. EL Muhasaba Jurnal Akuntansi, 11(2), 162–176.
Published
2024-03-24
How to Cite
Mediaty, M., Mustakim, M., Mas’ud, A. A., Muhammad, G., & Made, S. (2024). The Effect of the Level of Disclosure of Islamic Corporate Governance on Financial Performance at Indonesian Sharia Banks. Islamic Research, 7(1), 37-44. https://doi.org/https://doi.org/10.47076/jkpis.v7i1.226
Section
Islamic Economics and Finance
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