Do Islamic banks react due to the impact of Charia Supervisory Board on their financial performance? A joint worldwide analysis

Achraf Haddad and Abdelfattah Bouri

International Journal of Accounting, Auditing and Performance Evaluation, 2023, vol. 19, issue 3, 384-415

Abstract: The real impacts generated by the Charia Supervisory Board (CSB) on the Islamic banks' financial performance (IBs' FP) have not yet been thoroughly investigated in detail. To explore the relationship between the CSB determinants through the application of the fixed and random effects methods, we used 180 IBs from 56 countries during the period (2010-2019). The empirical results revealed that the CSB size, the number of meetings, and the presence of Charia advisers improved the IBs' FP. However, the presence of financial experts in the CSB degraded their FP. The IBs' CSB size ensured the skills' diversification, since the number offers them the necessary time to discuss monetary exchanges, investment choices, and complaints from other committees, while the existence of specialist advisers has optimised the respect for Charia standards. Nevertheless, the experts' impact confirmed either their qualification insufficiency, or their training inadequacy in terms of Fikh Al-Muamalat.

Keywords: FP; financial performance; IBs; Islamic banks; CSB; Charia Supervisory Board; financial stability period. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijaape:v:19:y:2023:i:3:p:384-415

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