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Executives’ observance of zakat among Islamic financial institutions: evidence from Bahrain and Malaysia

Jessie P.H. Poon (Department of Geography, University at Buffalo-SUNY, Buffalo, New York, USA)
Yew Wah Chow (Department of Business, Buffalo State College-SUNY, Buffalo, New York, USA)
Michael Ewers (Department of Geography and Earth Sciences, University of North Carolina at Charlotte, Charlotte, North Carolina, USA)
Trina Hamilton (Department of Geography, University at Buffalo-SUNY, Buffalo, New York, USA)

Journal of Islamic Accounting and Business Research

ISSN: 1759-0817

Article publication date: 28 May 2021

Issue publication date: 13 July 2021

316

Abstract

Purpose

The purpose of this paper is to examine the influence of Shariah board members and managerial networking on zakat observance among executives of Islamic financial firms (IFFs) in Bahrain and Malaysia.

Design/methodology/approach

The methodology is based on surveys administered to 106 respondents and personal interviews conducted with individuals holding management positions in IFFs.

Findings

The paper finds that: networking among IFF executives in Bahrain positively influences their observance and perception of zakat in their firms; and higher representation of Shariah on the board of directors increases executives’ favorable perception and observance of zakat in Malaysia. Differences in findings may be explained by Bahrain’s global Shariah institutions where networking offers opportunities for socialization of zakat ethics. In Malaysia, on the other hand, Shariah directorship sets the pace and direction of zakat ethics.

Originality/value

The seminal work of DiMaggio and Powell (1991) on neo-institutional theory has drawn attention to executives’ agency in creating cognitive frameworks that help promote the development of firm standards and norms. However, application of the theory to Islamic finance is largely absent. This paper contributes to an empirical understanding of the theory by highlighting sources of IFFs’ social agency in the development of zakat norm and its observance, namely, managerial networking and Shariah directors as change agents.

Keywords

Citation

Poon, J.P.H., Chow, Y.W., Ewers, M. and Hamilton, T. (2021), "Executives’ observance of zakat among Islamic financial institutions: evidence from Bahrain and Malaysia", Journal of Islamic Accounting and Business Research, Vol. 12 No. 4, pp. 509-523. https://doi.org/10.1108/JIABR-07-2020-0211

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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