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This paper aims to investigate the relationship between the composition of Sharīʿah supervisory boards (independence and frequency of meetings) and the performance of Islamic banks in the Gulf Cooperation Council (GCC) countries.

The study developed a multiple linear regression model, and data were collected from the annual reports of 48 standalone Islamic banks listed in the GCC countries covering the period between 2013 and 2017.

The results showed a statistically significant and negative relationship between the composition of the Sharīʿah supervisory boards and the performance of Islamic banks.

As the current study used only one indicator, that is Return on Assets to measure performance, it is recommended to expand the framework of this study, through the addition of market-based performance indicators such as Tobin’s Q.

This study recommends the GCC countries to follow a more proactive Sharīʿah governance model to strengthen their frameworks from both regulatory and non-regulatory aspects.

The study contributes to the Sharīʿah governance and Islamic banking literature relating to the GCC countries as previous studies gave no attention to the composition of Sharīʿah supervisory boards.

The main purpose of this research is to figure out the most effective determinants that play a vital role in enhancing the effectiveness of the internal Sharīʿah audit in the Islamic banking industry.

This paper reviews the existing literature to build comprehensive knowledge that would assist in determining the main factors that impact on the effectiveness of Sharīʿah audit in Islamic banks.

This research proposes a conceptual framework of factors that impact on Sharīʿah audit effectiveness in IBs based on previously published studies. The proposed framework includes external and internal factors as well as internal Sharīʿah audit structure, process and requirements.

First, the regulators need to provide a detailed framework for Sharīʿah audit which covers the main requirements for effective Sharīʿah governance. Second, Islamic financial institutions (IFIs) need to pay more attention to following the Sharīʿah audit process in order to achieve the objective of effective Sharīʿah governance. Finally, the dearth of empirical research on the role and effectiveness of Sharīʿah audit in Islamic banking highlights the need to develop an appropriate methodology to enhance the study of the effectiveness of Sharīʿah governance practices.

The Sharīʿah ensures compliance with its rules and regulations and enhances the soundness and credibility of the Islamic finance industry. This study identifies a number of issues that require further investigation in order to establish a better system of Sharīʿah audit and to identify the factors that affect Sharīʿah auditing practices. This paper is unique in covering the main elements that have influence on the effectiveness of Sharīʿah audit and proposes them in one framework.

This study aims to explore and assess the key Sharīʿah governance factors that may have an influence on the internal Sharīʿah audit structure and its practices in Islamic financial Institutions in Yemen, particularly in the Islamic banking sector.

To do so, the study adopts a qualitative approach employing case study analysis, and both primary and secondary data are used to formulate the appropriate interview questions and achieve the objectives of the study.

The authors observed that the key factors that help in assessing the internal Sharīʿah audit structure and its practices are Sharīʿah auditor charter, audit plan and audit manual. In addition, the authors observed that, in general, internal Sharīʿah audit tends to be subjective in Yemeni banks because they depend on the internal Sharīʿah auditor’s qualifications and experience more than formal guidelines and regulations. This is because there are no detailed internal Sharīʿah audit plans or detailed audit manual. Moreover, the internal Sharīʿah auditor charter is not comprehensive in explaining the duties required of the internal Sharīʿah auditor, and it is mixed with the Sharīʿah Supervisory Board (SSB) duties. This means the internal Sharīʿah auditor lacks the critical tools that enable him to achieve the desired audit manual objectives where the effectiveness of internal Sharīʿah audit can be measured.

One of the important implications of this study is providing very important guidance about enhancing the areas where shortfalls are found within the Sharīʿah governance process in the Yemeni banking system. This enhancement process of the internal factors of Sharīʿah governance can be achieved by increasing the awareness of the enhancing internal Sharīʿah audit structure as it reflects ultimately on the internal Sharīʿah auditor’s role and his practices.

Understanding the effectiveness of internal Sharīʿah audit structure among internal auditors will improve the Sharīʿah audit framework standards, enhance the Sharīʿah knowledge among internal auditors and provide general guidelines to design audit programmes for Sharīʿah governance auditing process.

The purpose of this study is to understand and evaluate the roles and functions of the Sharīʿah committee (SC) of Islamic banks (IBs) in Malaysia and to recommend a resetting of the scope of responsibilities to enable the SC to effectively respond to current market needs.

A Likert-type survey questionnaire was developed and distributed to all available SC members through e-mails and online surveys as well as self-administered questionnaires. At the end of the survey, 87 useable questionnaires were collected from 161 SC members, representing a 54% response rate.

This study finds that most SC members have the necessary Sharīʿah qualification, and they are mostly academics with doctoral degrees. However, there is a noticeable lack of diversity in the composition of experts in the committees. Respondents indicate that their main functions are to ensure Sharīʿah compliance of bank operations and product offerings. This is of course consistent with their stated functions as outlined in the Bank Negara Malaysia's Sharīʿah Governance Policy Document (BNM, 2019). The study finds that SCs are not involved in product development, nor responsible for financial performance. Respondents indicate three ways to enhance the role of SCs: improving banking knowledge of the members, more engagement with the board of directors (BoDs) and broadening the functions of SCs.

This study highlights two policy implications. First, there is a strategic need for IBs to consider having a diversity of expertise in the SCs while maintaining the Sharīʿah experts as core members. Second, this study recommends a reset of the scope of duties of the SC to include three new areas: risk management, product development and financial performance.

This study evaluates the current functions of the SC of IBs in Malaysia and provides suggestions for improvement in the composition of the committee and in the scope of duties of SCs based on contemporary needs.

This study aims to investigate the impact of Shari’ah and corporate governance on Islamic banks performance in Asia.

The study uses hand collected data set on Shari’ah and corporate governance variables of 79 Islamic banks of 19 countries of Asia, for the period of 2011-2016. Augmented Mollah et al. (2017) composite corporate governance index into Islamic corporate governance (ICG) index by incorporate Shari’ah board’s (SBs) attributes. Two types of statistical analysis were performed; descriptive statistics, sample t-test and panel random effects regression. The analysis was further sub-sampled by considering the supervisory vs advisory, GCC vs non-GCC and large vs small effects of Shari’ah and corporate boards on Islamic banks performance.

The results of the baseline model reveal that Shari’ah governance-related variables are more influential in determining the financial performance of the Islamic banks. The sub-sampled data findings illustrated some interesting facts. Shari’ah supervisory vs advisory boards regression results show that the ICG index was found significant in both the models. However, when SBs are weak the general board dominates in determining the performance. GCC vs non-GCC results show a relatively good governance in non-GCC countries. While, in case of large vs small Islamic banks, banks having high total assets demonstrates sound governance characteristics.

Independent, large and educated SB can play a significant role in removing the hurdles facing the Islamic banking industry and can also enhance stakeholders’ value.

This study enriches the understanding on Shari’ah governance, corporate governance and financial performance of Islamic banks in Asia.

The purpose of this paper is threefold. First, it assesses communicated (information disclosed in annual reports and websites) ethical values of Islamic banks (IBs) by using an index based on Islamic precept. Second, this research paper analyzes the perception of employees working in IBs of Pakistan regarding previously mentioned dimensions constructed in the form of index. Third, it explores the difference (if any) between communicated and perceived ethical values of IBs in Pakistan.

This study incorporated two research methods, namely, content analysis (qualitative method) and descriptive analysis (quantitative method) to assess communicated and perceived ethical values. A checklist was designed that includes total six dimensions with 106 items or constructs. For perceived ethics, survey method is used to explore how far in practice IBs are operating in line with Islamic finance ethics in Pakistan by distributing questionnaires among employees.

This research study revealed overall satisfactory communicated and perceived ethical values in IBs of Pakistan. It is generally concluded that Meezan Bank is doing well in all dimensions as compare to other three banks in Pakistan. Some banks such as Dubai Islamic Bank and Albaraka Islamic bank lack proper format of annual reports. It recommended proper training and development of employees particularly about Islamic banking products and procedure. Moreover, it is recommended to take initiative of attracting female segment of the society and environment protection related campaigns.

Because of data and time constraints, an extended beneficiary analysis could not be materialized in this study. Therefore, for future research, it is recommended to expand the stakeholders’ analysis beyond employees of IBs.

This study may be helpful for policymakers and other stakeholders to improve the image and for further growth of IBs in Pakistan.

This study is the part of corporate social responsibility, so it will add value to social norms of banking sector and provide different dimensions and constructs based on Islamic ethical and moral system. It highlights banker’s responsibilities toward society.

This paper supports the phenomena of Islamic banking and finance in emerging markets and shows its potential growth for the economy.

The purpose of this study is to determine the effect of board effectiveness (BE) on financial performance and operational risk (OR) disclosure and the interaction effect of a bank’s Sharia Supervisory Board quality (SSB) with religious and ethical principles.

The data were collected from the annual financial reports of 25 Islamic banks (IBs) in the Gulf Cooperation Council countries over 2008-2017. The OR disclosure, the SSB quality and BE were measured using self-developed indices. The Tawhidi string relation methodology was used to establish the circular causal model. The moderating effect of the SSB quality on the performance, OR disclosure and board structure relationship was examined using the hierarchical regression analysis.

The main finding of this study is related to the positive moderating effect of SSB quality on the relationship between performance, OR disclosure and BE. This result seems to indicate that at a high level of SSB quality, even when the performance increase the IBs engage in complying with OR disclosure to inform the stakeholders on the real situation of the bank.

The finding of this research would be of great support to stakeholders and policymakers to make more pressure on IBs to improve the quality of their SSB structure and show more compliance with the governance recommendations. As an extension to this research, further study can examine other Islamic governance mechanisms such as Sharīʿah-compliant banks.

The present study provides a new addition to the prior literature by investigating the relationship between performance, BE, OR disclosure and the interaction effect of SSB quality. From an Islamic ethical, this research can also contribute to the growing discussion on SSB quality and performance.

The purpose of this paper is to examine the effect of specific Islamic banks’ (IBs) corporate governance (CG) mechanisms on compliance with the Accounting and Auditing Organization for Islamic Financial Institutions’ (AAOIFI) governance standards (GSs) disclosure requirements.

Using an unweighted governance compliance index, the authors measure the extent of IBs’ compliance with 7 AAOIFI GSs’ disclosure requirements over the period 2009–2015 (372 bank-year observations). In addition, a multivariate regression analysis was used to test the four hypotheses.

This study’s results report substantial non-compliance (the mean of compliance level with AAOIFI’s GSs over the covered years for the entire sampled IBs is 52.1%). The findings reveal that the Shariah Supervisory Board’s (SSB) remuneration, SSB’s members with only industry expertise, SSB’s members with the combined industry expertise and accounting and financial expertise, the existence of internal Shariah Auditing Department and the level of investment accounts holders’ funds are positively associated with the level of compliance with AAOIFI’s GSs.

The existing studies focusing on the determinants of compliance with AAOIFI’s standards are in the early research stage, as to the best of the authors’ knowledge, there is a paucity of empirical research testing this issue. The authors extend these studies by examining all the AAOIFI’s GSs and focusing on the specific IBs’ CG mechanisms. Furthermore, a major contribution of this study is the examination of the relationship between some SSB’s characteristics and compliance level. To the best of the authors’ knowledge, this is the first research that has examined the effect of the SSB’s remuneration and expertise on compliance level.

The purpose of this study is to explore the practices of Shariah governance (SG) systems in terms of their guidelines, current operational procedures, internbal policies and structures and regulatory framework of Islamic banks in Bangladesh from the viewpoints of Shariah, Tawhidic approach/ontological approach and Shuratic process of Islamic corporate governance and institutional theory.

A semi-structured interview tactic has been applied to attain the objective. Overall, data has been collected from the regulators, Shariah supervisory board members, Shariah department executives and experts from the central bank and Islamic banks of Bangladesh.

The study finds that Islamic banks do not follow complete Shariah principles in all aspects of SG nor violate them fully in their overall functions due to less accountability, which contradicts the concept of the Tawhidi epistemological process of Islamic corporate governance. Islamic banks announce that they are following Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) guidelines, but in practice, they do not follow the instructions accurately because all of the standards and policies of AAOIFI and the Islamic Financial Services Board are not applicable in Bangladesh due to its cultural, legal and regulatory structures. It is found that Islamic banks in Bangladesh have a lower practice of maqasid as-Shariah and Tawhidic approach and Shuratic process.

The study significantly contributed to the central bank of Bangladesh and Islamic banks by exploring the SG systems for their further enhancement. The research provides some suggestions for improving existing SG systems and enhancing more application of SG guidelines and Shariah principles in the overall operations of the Islamic banks in Bangladesh.

This research extends the literature regarding the Islamic banks’ SG practices in Bangladesh. The study also contributes to Shariah, Tawhidic approach/ontological approach and Shuratic process of Islamic corporate governance and institutional theory by exploring the Islamic banks’ existing SG practices in Bangladesh.