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Does the board of directors influence Shariah governance in Islamic banks?

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  • Safiullah, Md
  • Miah, Mohammad Dulal
  • Azad, Asm Sohel
  • Hassan, M. Kabir

Abstract

This paper examines whether and how the board of directors influences Shariah board governance in Islamic banks. We use data from 54 Islamic banks from 10 countries where Islamic banks are systemically important from 2003 to 2019. The results show that the board of directors positively impacted Shariah governance. Our findings remain robust after using the dynamic panel GMM estimator and propensity score matching techniques as alternative estimation methods. We further document that the impact of the board of directors on Shariah board governance is more pronounced in large banks, publicly traded banks, and countries with better national governance.

Suggested Citation

  • Safiullah, Md & Miah, Mohammad Dulal & Azad, Asm Sohel & Hassan, M. Kabir, 2024. "Does the board of directors influence Shariah governance in Islamic banks?," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    • Handle: RePEc:eee:pacfin:v:85:y:2024:i:c:s0927538x24000970
    DOI: 10.1016/j.pacfin.2024.102346
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    Cited by:

    1. Mehwish Rafiq & Muhammad Fahad & Aisha Riaz & Muhammad Waqas Nazir, 2024. "Leveraging Banking Financial Performance through Shari’ah Board’s Characteristics: Empirical Investigation," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(3), pages 36-41.

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    More about this item

    Keywords

    Board of directors; Shariah governance; Islamic banks; Agency relation; National governance;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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