Corporate governance and the global performance of Islamic banks

Corporate governance and the global performance of Islamic banks Purpose – The purpose of this paper is to study the operation of Islamic banks and the elements which determine their performance. Design/methodology/approach – In order to ensure the respect of Shari’a , religious committee of monitoring exists within the Islamic bank to take care of the conformity of the activities and banking products with the Shari’a . This paper supposes that corporate governance of Islamic banks imposes an important constraint on Islamic banks operations. Furthermore, the directors of the Islamic banks are subjected to the governorship exerted by the board of directors and the Shari’a board. Findings – The findings of this paper are that the performance of an Islamic bank – as a company based on principles of Islam – is affected not only by the internal variables of quantitative nature (for example financial ratios) but also by the internal qualitative variables like the managerial variables. Moreover, the performance of an Islamic bank and a conventional bank should not be measured in the same way because of their divergence on the level of the objectives. The Shari’a member must have a qualification in finance and commerce to ensure better quality of supervision and consultation. Research limitations/implications – The findings of this paper are based on case studies from one country only (Bahrain). Practical implications – This paper implies that in practice, members of Shari’a Board must have stature to give the bank credibility vis‐à‐vis the stakeholders and the depositors. Originality/value – The original contribution of this paper is that it shows that the members of Shari’a board were a serious handicap for the directors of the Islamic banks. Directors and members of Shari’a board did not speak the same language. The members of the Shari’a board were not very specialized in the fields other than Shari’a and contrary the directors in Shari’a . http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Humanomics Emerald Publishing

Corporate governance and the global performance of Islamic banks

Humanomics, Volume 24 (3): 10 – Aug 29, 2008

Loading next page...
 
/lp/emerald-publishing/corporate-governance-and-the-global-performance-of-islamic-banks-0L4ykqHQDB
Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
0828-8666
DOI
10.1108/08288660810899368
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to study the operation of Islamic banks and the elements which determine their performance. Design/methodology/approach – In order to ensure the respect of Shari’a , religious committee of monitoring exists within the Islamic bank to take care of the conformity of the activities and banking products with the Shari’a . This paper supposes that corporate governance of Islamic banks imposes an important constraint on Islamic banks operations. Furthermore, the directors of the Islamic banks are subjected to the governorship exerted by the board of directors and the Shari’a board. Findings – The findings of this paper are that the performance of an Islamic bank – as a company based on principles of Islam – is affected not only by the internal variables of quantitative nature (for example financial ratios) but also by the internal qualitative variables like the managerial variables. Moreover, the performance of an Islamic bank and a conventional bank should not be measured in the same way because of their divergence on the level of the objectives. The Shari’a member must have a qualification in finance and commerce to ensure better quality of supervision and consultation. Research limitations/implications – The findings of this paper are based on case studies from one country only (Bahrain). Practical implications – This paper implies that in practice, members of Shari’a Board must have stature to give the bank credibility vis‐à‐vis the stakeholders and the depositors. Originality/value – The original contribution of this paper is that it shows that the members of Shari’a board were a serious handicap for the directors of the Islamic banks. Directors and members of Shari’a board did not speak the same language. The members of the Shari’a board were not very specialized in the fields other than Shari’a and contrary the directors in Shari’a .

Journal

HumanomicsEmerald Publishing

Published: Aug 29, 2008

Keywords: Islam; Banks; Organizational performance; Corporate governance; Ethics; Bahrain

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create folders to
organize your research

Export folders, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off