Relationship between Shariah governance disclosures and Islamic Financial Institutions performance in Malaysia
<p>Shariah governance framework has been established by the Bank Negara of Malaysia</p><p>(BNM) to ensure an effective Shariah governance among the Islamic Financial</p><p>Institutions in Malaysia. Nevertheless, since its implemen...
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| Format: | thesis |
| Language: | eng |
| Published: |
2022
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| Subjects: | |
| Online Access: | https://ir.upsi.edu.my/detailsg.php?det=9489 |
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| Summary: | <p>Shariah governance framework has been established by the Bank Negara of Malaysia</p><p>(BNM) to ensure an effective Shariah governance among the Islamic Financial</p><p>Institutions in Malaysia. Nevertheless, since its implementation in 2010 the financial</p><p>performance of the institutions is in doubt due to financial crisis and fraudulent acts that</p><p>have been triggered worldwide. Hence, the confidence level of the shareholders and</p><p>stakeholders towards the institutions is at stake. In addition, due to the lack of</p><p>understanding of the Shariah governance requirements and unclear roles among the</p><p>shareholders shall lead to poor disclosure and Shariah non-compliant issues. Therefore,</p><p>this study is to identify the level of disclosure of Shariah governance characteristics,</p><p>examine the relationship between Board characteristics (Board size and Non-executive</p><p>directors) and the Shariah governance characteristics and disclosures (Shariah</p><p>committee, Shariah committee report, Shariah board meeting, Shariah audit, Shariah</p><p>review, and Shariah risk management) towards Islamic financial institutions</p><p>performance using return on assets and return on equity. There are 16 Islamic banks</p><p>listed in the BNM and these banks are chosen as a sample for this study for 10</p><p>consecutive years from 2010 to 2019 by reviewing the banks annual reports. It is a</p><p>longitudinal study looking at events during and after the implementation of the Shariah</p><p>Governance Framework from 2010 onwards and the results of finding are being</p><p>analysed using E-view software 10.0 version. Findings were found that the size of the</p><p>Shariah committee, Shariah committee report, Shariah committee meeting, Shariah risk</p><p>management, Board size, and non-executive directors are significantly associated with</p><p>firm performance. This study shall give impacts on the policymakers such as the</p><p>government and BNM, the functions of the board and committees of the banks, and</p><p>theoretically on the additional literature review to ensure the Shariah governance</p><p>disclosure can be further strengthened.</p> |
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