Sharia supervision board, board independence, risk committee and risk-taking of Islamic Banks in Malaysia
This paper investigates the moderating effects of Sharia Supervision Boards (SSBs) on the links between board independence and risk committee (RC) independence and Islamic banks’ (IBs) risk-taking in Malaysia from 2010 to 2015. The paper highlights four important findings: (1) SSB’s expertise in Sha...
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| Format: | Article |
| Language: | English |
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International Journal of Economics and Financial Issues
2018
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/64828/ http://irep.iium.edu.my/64828/1/IJEFI_ZULKUFLY.pdf |
| _version_ | 1848786287214985216 |
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| author | Ramly, Zulkufly Datuk Haji Mohamad Nordin, Nurusysyifa |
| author_facet | Ramly, Zulkufly Datuk Haji Mohamad Nordin, Nurusysyifa |
| author_sort | Ramly, Zulkufly |
| building | IIUM Repository |
| collection | Online Access |
| description | This paper investigates the moderating effects of Sharia Supervision Boards (SSBs) on the links between board independence and risk committee (RC) independence and Islamic banks’ (IBs) risk-taking in Malaysia from 2010 to 2015. The paper highlights four important findings: (1) SSB’s expertise in Sharia and banking-related areas lower credit risk, (2) higher board independence is likely to reduce credit risk when SSBs consist of Sharia advisors
with expertise in Sharia and banking-related areas, (3) higher RC independence is likely to reduce credit risk when SSBs consist of Sharia advisors with expertise in Sharia and banking-related areas and (4) the reducing effect of RC on credit risk is conditional upon the higher participation of female Sharia advisors in SSBs. This study suggests that the resources in terms of the valuable experience that SSB advisors bring to IBs combined with the typical oversight mechanisms such as board independence and RC as suggested by corporate governance literature are beneficial to control risk-taking in the Malaysian IBs. Further, this paper demonstrates that integrating agency theory and resource dependence view in a corporate governance study produces a more meaningful result. |
| first_indexed | 2025-11-14T17:06:38Z |
| format | Article |
| id | iium-64828 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T17:06:38Z |
| publishDate | 2018 |
| publisher | International Journal of Economics and Financial Issues |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-648282018-07-27T02:56:39Z http://irep.iium.edu.my/64828/ Sharia supervision board, board independence, risk committee and risk-taking of Islamic Banks in Malaysia Ramly, Zulkufly Datuk Haji Mohamad Nordin, Nurusysyifa HG Finance HG3368 Islamic Banking and Finance This paper investigates the moderating effects of Sharia Supervision Boards (SSBs) on the links between board independence and risk committee (RC) independence and Islamic banks’ (IBs) risk-taking in Malaysia from 2010 to 2015. The paper highlights four important findings: (1) SSB’s expertise in Sharia and banking-related areas lower credit risk, (2) higher board independence is likely to reduce credit risk when SSBs consist of Sharia advisors with expertise in Sharia and banking-related areas, (3) higher RC independence is likely to reduce credit risk when SSBs consist of Sharia advisors with expertise in Sharia and banking-related areas and (4) the reducing effect of RC on credit risk is conditional upon the higher participation of female Sharia advisors in SSBs. This study suggests that the resources in terms of the valuable experience that SSB advisors bring to IBs combined with the typical oversight mechanisms such as board independence and RC as suggested by corporate governance literature are beneficial to control risk-taking in the Malaysian IBs. Further, this paper demonstrates that integrating agency theory and resource dependence view in a corporate governance study produces a more meaningful result. International Journal of Economics and Financial Issues 2018 Article PeerReviewed application/pdf en http://irep.iium.edu.my/64828/1/IJEFI_ZULKUFLY.pdf Ramly, Zulkufly and Datuk Haji Mohamad Nordin, Nurusysyifa (2018) Sharia supervision board, board independence, risk committee and risk-taking of Islamic Banks in Malaysia. International Journal of Economics and Financial Issues, 8 (4). pp. 290-300. ISSN 2146-4138 https://www.econjournals.com/index.php/ijefi/article/view/6726/pdf |
| spellingShingle | HG Finance HG3368 Islamic Banking and Finance Ramly, Zulkufly Datuk Haji Mohamad Nordin, Nurusysyifa Sharia supervision board, board independence, risk committee and risk-taking of Islamic Banks in Malaysia |
| title | Sharia supervision board, board independence, risk committee and risk-taking of Islamic Banks in Malaysia |
| title_full | Sharia supervision board, board independence, risk committee and risk-taking of Islamic Banks in Malaysia |
| title_fullStr | Sharia supervision board, board independence, risk committee and risk-taking of Islamic Banks in Malaysia |
| title_full_unstemmed | Sharia supervision board, board independence, risk committee and risk-taking of Islamic Banks in Malaysia |
| title_short | Sharia supervision board, board independence, risk committee and risk-taking of Islamic Banks in Malaysia |
| title_sort | sharia supervision board, board independence, risk committee and risk-taking of islamic banks in malaysia |
| topic | HG Finance HG3368 Islamic Banking and Finance |
| url | http://irep.iium.edu.my/64828/ http://irep.iium.edu.my/64828/ http://irep.iium.edu.my/64828/1/IJEFI_ZULKUFLY.pdf |