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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Main Authors:	Ramly, Zulkufly, Datuk Haji Mohamad Nordin, Nurusysyifa
Format:	Article
Language:	English
Published:	International Journal of Economics and Financial Issues 2018
Subjects:	HG Finance HG3368 Islamic Banking and Finance
Online Access:	http://irep.iium.edu.my/64828/ http://irep.iium.edu.my/64828/ http://irep.iium.edu.my/64828/1/IJEFI_ZULKUFLY.pdf

id	iium-64828
recordtype	eprints
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
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG Finance HG3368 Islamic Banking and Finance
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
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.
format	Article
author	Ramly, Zulkufly Datuk Haji Mohamad Nordin, Nurusysyifa
author_facet	Ramly, Zulkufly Datuk Haji Mohamad Nordin, Nurusysyifa
author_sort	Ramly, Zulkufly
title	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_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_sort	sharia supervision board, board independence, risk committee and risk-taking of islamic banks in malaysia
publisher	International Journal of Economics and Financial Issues
publishDate	2018
url	http://irep.iium.edu.my/64828/ http://irep.iium.edu.my/64828/ http://irep.iium.edu.my/64828/1/IJEFI_ZULKUFLY.pdf
first_indexed	2023-09-18T21:32:01Z
last_indexed	2023-09-18T21:32:01Z
_version_	1777412574147510272

Sharia supervision board, board independence, risk committee and risk-taking of Islamic Banks in Malaysia

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