Jurnal Ekonomi & Studi Pembangunan
Vol 24, No 2: October 2023

Shariah board governance and sustainability performance: analysis of sharia banking in Indonesia

Puspitasari, Novia Dwi (Unknown)
Kasri, Rahmatina Awaliah (Unknown)



Article Info

Publish Date
31 Oct 2023

Abstract

This study aims to investigate the relationship between sharia governance and sustainability performance in the Indonesian Islamic banking industry. Sharia governance is measured by the sharia supervisory board (SSB) score and the individual attributes of its members (size, number of meetings, educational background, and diversity). Sustainability performance (SP) is proxied by its economic, environmental, and social dimensions, as defined by the Global Reporting Initiative (GRI) framework. Secondary data from 2010—2020 company reports are used and analyzed using manual content analysis. Panel data regression is also employed to test the hypotheses and identify which individual attributes of the SSB influence sustainability performance. The results show that the SSB has a positive and significant effect on Indonesia’s overall SP of Islamic banking. Among the individual attributes, the frequency of SSB meetings has a positive and significant effect on overall SP, while the diversity of SSB members negatively affects economic and social SP. Meanwhile, SSB member’s size and educational background do not affect overall SP. The findings are expected to enhance understanding of Islamic bank’s development and approaches to addressing sustainability-related issues of Islamic bank. This study also contributes as consideration in the improvement of standard practices or the current implementation of sharia governance in Indonesia and to promote sustainable operations through Islamic corporate governance.

Copyrights © 2023






Journal Info

Abbrev

esp

Publisher

Subject

Economics, Econometrics & Finance

Description

Jurnal Ekonomi & Studi Pembangunan (JESP) focuses on research papers relating to development economics and multidisciplinary concern to systemic problems in developing countries particularly using quantitative or theoretical work in which novelty is essential. JESP does not publish manuscripts in ...