Performance of Islamic banks Do the frequency of Sharīʿah supervisory board meetings and independence matter?

Year: 2019

This publication is part of the journal (2011-2)

Purpose – This paper aims to investigate the relationship between the composition of Sharīʿah supervisory

boards (independence and frequency of meetings) and the performance of Islamic banks in the Gulf

Cooperation Council (GCC) countries.

Design/methodology/approach – The study developed a multiple linear regression model, and data

were collected from the annual reports of 48 standalone Islamic banks listed in the GCC countries covering the

period between 2013 and 2017.

Findings – The results showed a statistically significant and negative relationship between the composition

of the Sharīʿah supervisory boards and the performance of Islamic banks.

Research limitations/implications – As the current study used only one indicator, that is Return on

Assets to measure performance, it is recommended to expand the framework of this study, through the

addition of market-based performance indicators such as Tobin’s Q.

Practical implications – This study recommends the GCC countries to follow a more proactive

Sharīʿah governance model to strengthen their frameworks from both regulatory and non-regulatory


Originality/value – The study contributes to the Sharīʿah governance and Islamic banking literature

relating to the GCC countries as previous studies gave no attention to the composition of Sharīʿah supervisory


Keywords Sharīʿah governance, Sharīʿah supervisory board independence,

Sharīʿah supervisory board frequency of meetings, Performance, Islamic banking


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