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Although the phenomenon of the corporate social responsibility disclosure (CSRD) has derived the interest of several scholars, in recent years, the comparative studies between Islamic banks (IBs) regarding CSRD quantity versus quality have not been the subject matter of studies till now. In this perspective, this chapter aims to investigate the importance given by IBs to the quality and quantity disclosure of CSR. Moreover, it seeks to explore the impact of CSRD quality and quantity on the IBs' financial performance (FP). To meet these objectives, we used a sample of 59 IBs from 2011 to 2016 in the Arab world and non-Arab world. Then, by adopting the content analysis approach, the authors constructed two CSRD indexes (quality and quantity). The empirical results indicated that IBs give more importance to the qualitative disclosure than the quantitative. Our findings will be very helpful for the policymakers and the managers of IBs because maintaining a good CSRD policy increases the capacity of IBs to deal with possible reputational events, thus protecting their profits and financial results. As far as the comparison between the Arabian and non-Arabian IBs, based on financial reports and Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) governance standard N°7 is concerned, our study is among the first studies that provides two new CSRD indexes (quantity and quality).

This chapter aims to explore and examine the extent of Islamic corporate governance practices in 35 Islamic Financial Institutions (IFIs) in Malaysia, Gulf Cooperation Council countries and the United Kingdom, particularly in its six major areas, namely approaches to Islamic governance, regulatory framework and internal policies, roles and functions of shari’ah board, attributes of shari’ah board members on independence, competency and transparency, and confidentiality, operational procedures and perception of IFIs of the shari’ah board’s performance. A questionnaire was developed by benefiting from the Islamic corporate governance standards identified by International Financial Services Board and Accounting and Auditing Organization for IFIs, which included mainly about 50 standards with sub-sections as questions. The study demonstrates the state of Islamic corporate governance practices in these countries. The survey findings affirm that there are significant differences and diverse Islamic governance practices amongst IFIs in the case countries. The study hence provides evidence that there are shortcomings and weaknesses to the existing governance framework, which needs further enhancement and improvement.

The authors measure the impact of culture on Sharia; Social and Financial Disclosure (SSFD) of Islamic Banks (IBs) around the world.

Content analysis is used to measure levels of disclosure for a sample of 136 IBs of 25 countries for years 2013 and 2014. Different cultural measures are used. These include secrecy/transparency as suggested by Gray (1988) and Hofstede (1980, 1983, 2001, 2010)’s culture dimensions which include: Power Distance; Individualism; Masculinity; Uncertainty Avoidance; Long-Term Ordination and Indulgence. Ordinary least square (OLS) regression is used to test the research hypotheses.

After controlling bank-specific, corporate governance and country characteristics, the authors found that Hofstede’s culture dimensions have a significant impact on SSFD. They also found that Gray's transparency dimension positively influence levels of sharia, social and aggregated disclosure. Therefore, they conclude that culture influences levels of disclosure in IBs.

This study has policy implications for managers and regulators of Islamic banking industry.

This study is the first to use both Gray and Hofstede models in the context of IBs around the world. It also the first to explore the impact of culture on three different disclosure levels for IBs.

This chapter assesses the effects of corporate governance (CG) variables on the level of Corporate Social Responsibility Disclosure (CSRD), Shari'ah Supervisory Board Disclosure (SSBD), and Financial Disclosure (FD) for Islamic banks. This study, based on a sample of 95 Islamic banks, assessed this in 2013. The findings suggest that CG mechanisms, firm's age, auditor and shari'ah auditing department are effective in influencing SSBD, CSRD, and FD practices in Islamic banks. This chapter encourages regulators to improve CG mechanisms in their Islamic banking systems through the optimization of ownership structure (dispersed ownership) and the board's characteristics in order to promote transparency and disclosure. Moreover, the findings support theoretical arguments that firms disclose CG information in order to mitigate information asymmetry and agency costs and to improve investor confidence in the reported financial statements. The empirical evidence of this study enhances the understanding of the CG disclosure environment in Islamic banks as a promoting new financial system.

This chapter highlights the variations of agency theory in the unique and complex context of Islamic banks in Saudi Arabia. The results provide an insight into agency structures in the context of Islamic banking that may lead to trade-offs between shari'ah compliance and mechanisms for protecting the rights of investors. This empirical study finds that most of the surveyed Islamic banks appear to recognize the value of governance and have implemented some basic mechanisms. Certain flaws in governance pertaining to audit, control, and transparency were also noted. The situation gets worse in cases where the investment account holders do not have any representation on the board or any voice for control or monetary rights. Other peculiar models balancing the two key requirements may be effective regarding agency dynamics. This study should motivate the policy makers to tailor the regulations to safeguard the interests of all investors without violating the principles of shari'ah.

This chapter’s goal is to define the kind of seeds to be planted for moving forward in the safe and stable drive toward a leading central banking role directed at achieving a sustained Islamic banking and finance development within the global financial system. The system witnessed the input of Islamic banking with its fruitful contribution as a feasible banking structure in both implementing agreed reforms and shaping the next steps directed toward crisis prevention and crisis resolution.

The adopted approach is based upon scientific conceptual basis as well as the practical experience related to the central banking role and Islamic banking evolution. This chapter will define the strategic role of Central Banks and highlight the conceptual basis governing the leading role of central banks as well as the practical basis derived from our central banking and Islamic banking experience.

In light of the conceptual and practical basis for enabling an efficient and effective role of Central Banks as a regulatory body in shaping the future of the Islamic Financial System. Legal, institutional and managerial strategic determinants for this role have been defined.

The analytical work of this chapter crystallises in a pioneering initiative the main determining factors governing the role of central banks as the main regulatory body for Islamic banking, and how this role could be effective in affecting the future role to be played by the Islamic banks in the global financial system. Also, to this end, the integrated required role by central banks, public policies, multilateral institutions and Islamic banks are illustrated.

Energy and cooperative hard work and commitment from all players, including the regulators of Islamic banks supported by public policies, international and multilateral institutions and members of the Islamic banking family is thought to be the main determining factor for transforming the Islamic banking family into one that will make the Islamic people and all humanity – through the global financial system – live with more stability, welfare and happiness.

The unique characteristic of Islamic bank leads in governance and disclosure. Using stakeholder, signaling, and market discipline theory, governance and adequate disclosure may increase bank soundness. This study aims to investigate the relationship of sharia disclosure and Sharia Supervisory Board in influencing Islamic bank soundness in the different regulatory framework of the country. Using purposive sampling, the research covered 84 Islamic banks in 16 countries during the period 2013–2015 with lag data of Islamic bank soundness. The result shows sharia disclosure influences on Islamic bank soundness for management efficiency, capital adequacy ratio, asset quality, and liquidity. The results also show that sharia disclosure mediates the indirect effect of SSB on Islamic bank soundness. The regulatory framework (sharia accounting standard and SSB regulation) shows moderating effect of regulation framework proved on the association of sharia disclosure with management efficiency, capital, and liquidity. The effect is indirectly depending on the regulatory framework for proxy management efficiency, capital, and liquidity. The implication of the research suggests that sharia disclosure could increase the market discipline mechanism of Islamic bank stream. The Islamic bank can increase the transparency using sharia disclosure as a branding for increasing public trust, even though in the deficient Islamic bank regulation countries.

An Islamic social finance ecosystem has its specific instruments in terms of funding and investment that are in line with Shariah (Islamic law) principles. These include waqf (Islamic endowment), zakat (compulsory alms), ṣadaqah (donation), qarḍ ḥasan (benevolent loan) and others. In this context, the Islamic financial institutions can be considered as Islamic social finance institutions since it has the elements of Islamic social finance concepts. The uniqueness of these two types of institutions is that they operate with the absence of riba, maysir, gharar and thus the requirement of Shariah governance comes into existence. The practice of Shariah governance in Islamic financial institutions needs to be extensively examined by using a comprehensive measurement. Therefore, this chapter attempts to discuss on the needs of Shariah Governance Practices Index (SGPi) as a comprehensive measurement to measure the Shariah governance practices. In conclusion, it is proposed to have a comprehensive index to measure the Shariah governance practices which consider few components of Shariah governance such as the board of directors, the management, Shariah Committee and Shariah compliance functions.