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Article
Publication date: 8 July 2021

Afef Khalil

The purpose of the study is to examine the relationship between the board of directors (BODs) and the Shariah board (SB) and assess its impact on the financial soundness…

Abstract

Purpose

The purpose of the study is to examine the relationship between the board of directors (BODs) and the Shariah board (SB) and assess its impact on the financial soundness of Islamic banks (IBs).

Design/methodology/approach

The authors use a regression model to test the effects of the relationship between the BOD and the SB on the financial soundness of IBs by applying a panel data set of 61 IBs, covering 18 countries from 2008 to 2014. The dependent variable is the Z-score indicator. To test the robustness of the results, the authors use dependent variables other than the Z-score [A rating of Capital adequacy (C), Asset quality (A), Management (M), Earnings (E), Liquidity (L), and Sensitivity (S) (CAMELS)] for 2018.

Findings

The results show that meetings between directors and SB members significantly reduce the financial soundness of IBs. The relationship between the BOD and the SB increases conflicts of interest and agency costs. However, a representation of the SB at the BOD meetings and vice versa does not affect financial soundness. The Accounting and Auditing Organization for Islamic Financial Institutions and the Islamic Financial Services Board corporate governance standards do not require the presence of the SB representative at the BOD meetings or vice versa, which justifies the results.

Practical implications

This study attempts to fill gaps in the literature by investigating the impact of meetings between the SB and the BOD on the financial soundness of IBs across the world. The results suggest that the BOD’s frequent interference in the affairs of the SB can have adverse effects on IBs and should be avoided.

Originality/value

The authors depart from the previous literature by using three new characteristics that link the BOD to the SB. Methodologically, the authors use three new measures to evaluate this relationship and its effect on the financial soundness of IBs. This study is unique because it explores the comparative impacts of the presence of a SB representative at the BOD meetings and a director at the SB meetings and meetings between the two governing boards of IBs.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

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Article
Publication date: 10 June 2021

Afef Khalil and Imen Ben Slimene

The purpose of this paper is to examine the Board of Directors’ characteristics and their impact on the financial soundness of Islamic banks.

Abstract

Purpose

The purpose of this paper is to examine the Board of Directors’ characteristics and their impact on the financial soundness of Islamic banks.

Design/methodology/approach

Regression analysis is applied to test the impact of the Board of Directors’ characteristics on the financial soundness of Islamic banks, using a panel data set of 67 Islamic banks covering 20 countries from 2005 to 2018. The Z-score indicator is used to evaluate the Islamic banks’ soundness. To check the robustness of the results, this paper uses other dependent variables (CAMEL) than the Z-score.

Findings

The main results show that the presence of an independent non-executive director negatively impacts the financial soundness of Islamic banks, while the chief executive officer duality practice has a positive effect on it. Other characteristics of the Board of Directors do not significantly impact the financial soundness of Islamic banks (foreign director, institutional director, chairman with a Shari’ah degree, interlocked chairman and the Board of Directors’ size).

Practical implications

This study aims to fill the gaps in the literature that discuss the Board of Directors’ role in corporate governance and its impact on the financial soundness of Islamic banks. In other words, it shows the role played by the Board of Directors and improves the knowledge of the corporate governance-financial soundness relationship. Plus, managers, investors and regulators may gain evocative insights, particularly those looking to improve their Islamic banks’ soundness by restructuring their boards’ composition.

Originality/value

This study sheds new light on the literature on Islamic banking by clarifying the relationship between the Board of Directors and the financial soundness of Islamic banks. Contrary to previous research, this paper uses an additional hypothesis stating that a chairman with a Shari’ah degree (Fiqh Muamalt) has a positive impact on the financial soundness of Islamic banks.

Details

Corporate Governance: The International Journal of Business in Society, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

Keywords

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Article
Publication date: 28 July 2020

Afef Khalil and Neila Boulila Taktak

The purpose of this study is to examine the relationship between corporate governance and financial soundness of Islamic banks. Precisely, this study examines the Shariah…

Abstract

Purpose

The purpose of this study is to examine the relationship between corporate governance and financial soundness of Islamic banks. Precisely, this study examines the Shariah Board’s characteristics and empirically diagnoses its impact on the financial soundness of Islamic banks.

Design/methodology/approach

In this case, the level of bank soundness is individually measured using the z-score indicator. Regression analyses are applied to test the impact of the Shariah Board’s characteristics on the financial soundness of Islamic banks, using a panel data set of 67 Islamic banks – covering 20 countries during the period 2005–2014.

Findings

The model shows that the size of the Shariah Board has a negative and significant impact on the financial soundness of Islamic banks. However, the Shariah scholar with knowledge in finance/accounting, the presence of Mufti, the interlocked Shariah scholar and the foreign Shariah scholar do not have any significant impact on the financial soundness of Islamic banks.

Practical implications

This study contributes to fill the gaps in the literature that discussed the Shariah Boards’ role in the governance of Islamic banks. In addition, it provides practical implications to the Shariah Boards’ members in the Islamic banks and calls for setting a sufficient number of scholars for each Shariah Board.

Originality/value

With this paper, the authors aim to clarify the relationship between Shariah Board and financial soundness of the Islamic banking, and provide additional insights to the emerging literature of Islamic banking. Contrary to previous research studies, the authors use an additional hypothesis, i.e. the presence of Mufti that has a positive and significant effect on the financial soundness of Islamic Banks. Methodologically, the authors incorporate a new measure to evaluate empirically the impact of Shariah Board members with knowledge of finance and accounting on the financial soundness of Islamic banks.

Details

Journal of Islamic Accounting and Business Research, vol. 11 no. 9
Type: Research Article
ISSN: 1759-0817

Keywords

Content available
Article
Publication date: 27 June 2019

Younss Ait Mou and Muammer Koc

This paper aims to report on the findings of an investigation to compare three different three-dimensional printing (3DP) or additive manufacturing technologies [i.e…

Abstract

Purpose

This paper aims to report on the findings of an investigation to compare three different three-dimensional printing (3DP) or additive manufacturing technologies [i.e. fused deposition modeling (FDM), stereolithography (SLA) and material jetting (MJ)] and four different equipment (FDM, SLA, MJP 2600 and Object 260) in terms of their dimensional process capability (dimensional accuracy and surface roughness). It provides a comprehensive and comparative understanding about the level of attainable dimensional accuracy, repeatability and surface roughness of commonly used 3DP technologies. It is expected that these findings will help other researchers and industrialists in choosing the right technology and equipment for a given 3DP application.

Design/methodology/approach

A benchmark model of 5 × 5 cm with several common and challenging features, such as around protrusion and hole, flat surface, micro-scale ribs and micro-scale long channels was designed and printed repeatedly using four different equipment of three different 3DP technologies. The dimensional accuracy of the printed models was measured using non-contact digital measurement methods. The surface roughness was evaluated using a digital profilometer. Finally, the surface quality and edge sharpness were evaluated under a reflected light ZEISS microscope with a 50× magnification objective.

Findings

The results show that FDM technology with the used equipment results in a rough surface and loose dimensional accuracy. The SLA printer produced a smoother surface, but resulted in the distortion of thin features (<1 mm). MJ printers, on the other hand, produced comparable surface roughness and dimensional accuracy. However, ProJet MJP 3600 produced sharper edges when compared to the Objet 260 that produced round edges.

Originality/value

This paper, for the first time, provides a comprehensive comparison of three different commonly used 3DP technologies in terms of their dimensional capability and surface roughness without farther post-processing. Thus, it offers a reliable guideline for design consideration and printer selection based on the target application.

Details

Rapid Prototyping Journal, vol. 25 no. 5
Type: Research Article
ISSN: 1355-2546

Keywords

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