Voluntary Disclosure of Shari’ah Governance of Islamic Financial Institutions in Saudi Arabia

Abstract

The study explores how financial institutes in Saudi Arabia report compliance with shari'ah teachings in terms of improving its legitimacy. The study covers all banks and insurance companies listed in Saudi stock market from 2012 to 2015. Around 181 annual reports were investigated by employing content analysis approach. The results show some trends toward more compliance with shariah teachings. Nevertheless, this is still below, especially for insurance companies. Analysis of variance suggests that banks are more likely to report about their compliance with shariah teachings than insurance companies. The conclusions that can be drafted about these results are that the nature of products and social attributes might influence the attitude of financial institutes to show their compliance with shari'ah teachings, reflecting the aim of the company to present its legitimacy.

Citation

Alnodel, A.A. and Azid, T. (2019), "Voluntary Disclosure of Shari’ah Governance of Islamic Financial Institutions in Saudi Arabia", Azid, T., Alnodel, A.A. and Qureshi, M.A. (Ed.) Research in Corporate and Shari’ah Governance in the Muslim World: Theory and Practice, Emerald Publishing Limited, Leeds, pp. 141-152. https://doi.org/10.1108/978-1-78973-007-420191012