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CSR Disclosure, Corporate Governance and Firm Value: a study on GCC Islamic Banks

Mohd Shukor Harun (Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, Nilai, Malaysia)
Khaled Hussainey (Portsmouth Business School, University of Portsmouth, Portsmouth, UK)
Khairul Ayuni Mohd Kharuddin (School of Business and Economics, Loughborough University, Loughborough, UK)
Omar Al Farooque (UNE Business School, University of New England, Armidale, Australia)

International Journal of Accounting & Information Management

ISSN: 1834-7649

Article publication date: 28 May 2020

Issue publication date: 16 October 2020



This study aims to explore the corporate social responsibility disclosure (CSRD) practices of the Islamic banks in the Gulf Cooperation Council (GCC) countries during the period 2010-2014 and examines the determinants of CSRD and its effects on firm value.


Based on the Accounting and Auditing Organization for Islamic Financial Institutions Governance Standard No. 7 guidelines and using content analysis, the paper develops a comprehensive CSRD index for GCC Islamic banks. The study applies ordinary least squares regression analysis for hypothesis testing and for finding determinants of respective dependent variables.


The results show a very low level of CSRD among the sample Islamic banks in GCC countries. When using corporate governance characteristics to examine the determinants of CSRD, this study provides evidence of a significant positive association between board size and CSRD practice in Islamic banks and a significant negative relationship of chief executive officer (CEO) duality with CSRD, as per expectation. For the economic consequences of CSRD, the study documents an inverse performance effect of CSRD while board size, board composition and CEO duality indicate significant positive effects on firm value.

Research limitations/implications

The relatively small sample size of GCC Islamic banks may limit the application of the findings to other Islamic financial institutions such as Takaful and the Islamic unit trust company.

Practical implications

The findings of this study initiate the global debate on the need for corporate governance reform in Islamic banks by providing insights on the role played by corporate governance mechanisms in encouraging and enhancing CSRD practices among Islamic banks. The findings also have important implications for investors, managers, regulatory bodies, policymakers and Islamic banks in the GCC countries.

Social implications

The results of the study do not support the idea that Islamic banks operating on Islamic principles can meet their social responsibilities through promoting corporate social responsibility (CSR) activities and by differentiating themselves from non-Islamic banks.


This is the first study to examine the determinants of CSRD in GCC Islamic banks using comprehensive CSRD and corporate governance variables and, therefore, adds value to the existing CSR literature in banking.



Harun, M.S., Hussainey, K., Mohd Kharuddin, K.A. and Farooque, O.A. (2020), "CSR Disclosure, Corporate Governance and Firm Value: a study on GCC Islamic Banks", International Journal of Accounting & Information Management, Vol. 28 No. 4, pp. 607-638.



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