Modeling the effect of Shari’ah governance, risk governance and corporate governance in predicting risk-taking behavior of Islamic banks

This research investigates the relationship between board monitoring, risk committee (RC) independence, Sharia Supervision Boards (SSBs) and risk-taking of Islamic banks (IBs) in Malaysia, Gulf Cooperation Council (GCC) and Southeast Asia (SEA). Independent directors and board size represent board...

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Main Author:	Ramly, Zulkufly
Format:	Monograph
Language:	English
Published:	2019
Subjects:	HG Finance HG3368 Islamic Banking and Finance
Online Access:	http://irep.iium.edu.my/71827/ http://irep.iium.edu.my/71827/1/RESEARCH_REPORT_RIGS15-055-0055.PDF

id	iium-71827
recordtype	eprints
spelling	iium-718272020-01-09T12:38:14Z http://irep.iium.edu.my/71827/ Modeling the effect of Shari’ah governance, risk governance and corporate governance in predicting risk-taking behavior of Islamic banks Ramly, Zulkufly HG Finance HG3368 Islamic Banking and Finance This research investigates the relationship between board monitoring, risk committee (RC) independence, Sharia Supervision Boards (SSBs) and risk-taking of Islamic banks (IBs) in Malaysia, Gulf Cooperation Council (GCC) and Southeast Asia (SEA). Independent directors and board size represent board monitoring. This research focuses on the expertise and educational level of SSB members as well as gender diversity in SSBs. Credit risk and insolvency risk represent the level of risk-taking. Using panel data regression techniques to analyze the data for the period of 2009-2015, this study observes that the combinations of (1) board monitoring and SSBs and (2) RC independence and SSBs reduce risk-taking. Further, SSB’s expertise in Sharia and banking-related areas lower credit risk and higher board independence is likely to reduce credit risk when SSBs consist of Sharia advisors with expertise in Sharia and banking-related areas. This study suggests that the resources in terms of valuable experience that SSB advisors bring to IBs combined with the typical board oversight mechanisms such as board independence and RC as suggested by corporate governance literature are beneficial to control risk-taking in IBs. Further, this paper demonstrates that integrating agency theory and resource dependence view in a corporate governance study produces a more meaningful result. In sum, this research shows that greater independent directors monitoring, SSBs expertise, RC independence, gender diverse SSBs are able to control risk-taking activities of IBs. 2019-04-25 Monograph NonPeerReviewed application/pdf en http://irep.iium.edu.my/71827/1/RESEARCH_REPORT_RIGS15-055-0055.PDF Ramly, Zulkufly (2019) Modeling the effect of Shari’ah governance, risk governance and corporate governance in predicting risk-taking behavior of Islamic banks. Research Report. UNSPECIFIED. (Unpublished)
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 Modeling the effect of Shari’ah governance, risk governance and corporate governance in predicting risk-taking behavior of Islamic banks
description	This research investigates the relationship between board monitoring, risk committee (RC) independence, Sharia Supervision Boards (SSBs) and risk-taking of Islamic banks (IBs) in Malaysia, Gulf Cooperation Council (GCC) and Southeast Asia (SEA). Independent directors and board size represent board monitoring. This research focuses on the expertise and educational level of SSB members as well as gender diversity in SSBs. Credit risk and insolvency risk represent the level of risk-taking. Using panel data regression techniques to analyze the data for the period of 2009-2015, this study observes that the combinations of (1) board monitoring and SSBs and (2) RC independence and SSBs reduce risk-taking. Further, SSB’s expertise in Sharia and banking-related areas lower credit risk and higher board independence is likely to reduce credit risk when SSBs consist of Sharia advisors with expertise in Sharia and banking-related areas. This study suggests that the resources in terms of valuable experience that SSB advisors bring to IBs combined with the typical board oversight mechanisms such as board independence and RC as suggested by corporate governance literature are beneficial to control risk-taking in IBs. Further, this paper demonstrates that integrating agency theory and resource dependence view in a corporate governance study produces a more meaningful result. In sum, this research shows that greater independent directors monitoring, SSBs expertise, RC independence, gender diverse SSBs are able to control risk-taking activities of IBs.
format	Monograph
author	Ramly, Zulkufly
author_facet	Ramly, Zulkufly
author_sort	Ramly, Zulkufly
title	Modeling the effect of Shari’ah governance, risk governance and corporate governance in predicting risk-taking behavior of Islamic banks
title_short	Modeling the effect of Shari’ah governance, risk governance and corporate governance in predicting risk-taking behavior of Islamic banks
title_full	Modeling the effect of Shari’ah governance, risk governance and corporate governance in predicting risk-taking behavior of Islamic banks
title_fullStr	Modeling the effect of Shari’ah governance, risk governance and corporate governance in predicting risk-taking behavior of Islamic banks
title_full_unstemmed	Modeling the effect of Shari’ah governance, risk governance and corporate governance in predicting risk-taking behavior of Islamic banks
title_sort	modeling the effect of shari’ah governance, risk governance and corporate governance in predicting risk-taking behavior of islamic banks
publishDate	2019
url	http://irep.iium.edu.my/71827/ http://irep.iium.edu.my/71827/1/RESEARCH_REPORT_RIGS15-055-0055.PDF
first_indexed	2023-09-18T21:41:50Z
last_indexed	2023-09-18T21:41:50Z
_version_	1777413191878311936

Modeling the effect of Shari’ah governance, risk governance and corporate governance in predicting risk-taking behavior of Islamic banks

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