Corporate governance and risk management: An evaluation of board responsibilities in western and Islamic banks

Alatassi Bchr () and Pillai Rekha ()
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Alatassi Bchr: Bournemouth University, 89 Holdenhurst Rd, Bournemouth BH8 8EB, Dorset, United Kingdom
Pillai Rekha: British University in Dubai, Block 11, Dubai International Academic City PO Box 345015, Dubai, UAE

Economics and Business Review, 2024, vol. 10, issue 1, 125-152

Abstract: This research aims to explore the role of the board in corporate governance (CG) and risk management within the context of Islamic banking. Given the global reach of financial institutions, it is important to compare and evaluate the unique position of Shari’ah committees or Shari’ah Supervisory Board (SSB) in addressing the unique risks of Islamic banks. Using a comparative analysis, this study evaluated risk management guidelines in the CG codes of the United Kingdom, Germany, Saudi Arabia, and Malaysia. It found that board were ultimately responsible for risk management, regardless of the governance structure, and Shari’ah-related risks fell under the board’s purview. An innovative blend of Western CG frameworks and Islamic principles enhanced governance robustness through the strategic collaboration between board and SSBs.

Keywords: corporate governance; Islamic banking; risk management; Shari’ah; governance codes (search for similar items in EconPapers)
JEL-codes: G21 G30 G34 G39 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecobur:v:10:y:2024:i:1:p:125-152:n:1

DOI: 10.18559/ebr.2024.1.1004

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