IDEAS home Printed from https://ideas.repec.org/a/ajp/edwast/v8y2024i6p4372-4383id2937.html
   My bibliography  Save this article

The role of Sharia compliance in moderating the indirect influence of board diversity on roe mediated by Zakat disclosure

Author

Listed:
  • Rizalnur Firdaus
  • Sumiati Sumiati
  • Atim Djazuli
  • Nur Khusniyah Indrawati

Abstract

This study aims to examine the moderating role of Sharia compliance on the relationship between the diversity of the Board of Directors, Board of Commissioners, and Sharia Supervisory Board and Return on Equity (ROE), with Zakat Disclosure as a mediating factor. The research is grounded in agency theory, stakeholder theory, and legitimacy theory, focusing on how board diversity and Sharia compliance influence corporate governance and financial performance, specifically in the context of Islamic banking. The study utilizes a sample of Islamic commercial banks listed with Bank Indonesia. Data from the banks' annual reports and financial statements between 2013 and 2023 are analyzed using a panel data regression model. Multi-Group Analysis (MGA) is employed to test the moderating effects of Sharia compliance on the indirect relationships between board diversity and ROE, mediated by zakat disclosure. The results show that Sharia compliance moderates the relationship between the diversity of the Board of Directors and ROE, with zakat disclosure acting as a mediator. However, Sharia compliance does not moderate the relationship between the diversity of the Board of Commissioners and Sharia Supervisory Board with ROE, as mediated by zakat disclosure. The research provides insights for Islamic banks, highlighting the importance of Sharia compliance and board diversity in enhancing financial performance through zakat disclosure. The findings can inform regulators and practitioners in improving corporate governance practices within Islamic financial institutions. This study contributes to the literature by offering new evidence on the role of Sharia compliance in the governance-performance relationship, particularly the indirect effects through zakat disclosure, and how this dynamic operates within the unique framework of Islamic banking.

Suggested Citation

  • Rizalnur Firdaus & Sumiati Sumiati & Atim Djazuli & Nur Khusniyah Indrawati, 2024. "The role of Sharia compliance in moderating the indirect influence of board diversity on roe mediated by Zakat disclosure," Edelweiss Applied Science and Technology, Learning Gate, vol. 8(6), pages 4372-4383.
  • Handle: RePEc:ajp:edwast:v:8:y:2024:i:6:p:4372-4383:id:2937
    as

    Download full text from publisher

    File URL: https://learning-gate.com/index.php/2576-8484/article/view/2937/1107
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ajp:edwast:v:8:y:2024:i:6:p:4372-4383:id:2937. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Melissa Fernandes (email available below). General contact details of provider: https://learning-gate.com/index.php/2576-8484/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.