Governance mechanisms and Islamic bank performance: insights from South East Asia and the Gulf Cooperation Council / Fahru Azwa Mohd Zain, Wan Amalina Wan Abdullah and Siti Fariha Muhamad

Mohd Zain, Fahru Azwa and Wan Abdullah, Wan Amalina and Muhamad, Siti Fariha (2025) Governance mechanisms and Islamic bank performance: insights from South East Asia and the Gulf Cooperation Council / Fahru Azwa Mohd Zain, Wan Amalina Wan Abdullah and Siti Fariha Muhamad. Management & Accounting Review (MAR), 24 (1): 3. pp. 57-97. ISSN 2550-1895

Official URL: https://mar.uitm.edu.my/

Abstract

This study explores how corporate governance (CG) disclosure influences the relationship between governance mechanisms and the financial performance of Islamic banks in Southeast Asia (SEA) and the Gulf Cooperation Council (GCC) regions. Using panel data analysis and structural equation modelling (SEM), data from 33 Islamic banks in SEA and 46 in the GCC, covering the period from 2012 to 2021, was analysed to capture both pre- and postCOVID-19 effects. The study examines various governance mechanisms, including corporate governance practices, Shari’ah supervisory boards (SSBs), and legal systems. The findings show that strong governance mechanisms positively affect bank performance, with CG disclosure playing a key role in this relationship. Specifically, CG disclosure has an independent positive impact on bank performance. The research highlights that effective governance structures, such as SSBs and strong legal frameworks, lead to better performance. It also stresses the importance of precise CG disclosure requirements to improve financial stability and trust in Islamic banks. This study offers valuable insights into how Islamic governance mechanisms, especially those aligned with Shari’ah principles, influence the performance of banks, and provides a basis for future research in this field.

Metadata

Item Type: Article
Creators:
Creators
Email / ID Num.
Mohd Zain, Fahru Azwa
fahrumdzain@unisza.edu.my
Wan Abdullah, Wan Amalina
UNSPECIFIED
Muhamad, Siti Fariha
UNSPECIFIED
Subjects: H Social Sciences > HD Industries. Land use. Labor > Corporations > Corporate organization. Corporate governance
Divisions: Universiti Teknologi MARA, Shah Alam > Accounting Research Institute (ARI)
Journal or Publication Title: Management & Accounting Review (MAR)
UiTM Journal Collections: Listed > Management & Accounting Review (MAR)
ISSN: 2550-1895
Volume: 24
Number: 1
Page Range: pp. 57-97
Keywords: Governance Mechanisms, Shari’ah Supervisory Board, Corporate Governance Disclosure, Islamic Bank
Date: April 2025
URI: https://ir.uitm.edu.my/id/eprint/113516
Edit Item
Edit Item

Download

[thumbnail of 113516.pdf] Text
113516.pdf

Download (732kB)

ID Number

113516

Indexing

Statistic

Statistic details