Strong Boards and Risk-taking in Islamic Banks

Sabur Mollah, Michael Skully and Eva Liljeblom

Review of Corporate Finance, 2021, vol. 1, issue 1-2, 135-180

Abstract: This paper examines whether variations in strong boards explain the differences between risk-taking in Islamic and conventional banks. From an analysis of a pooled sample of Islamic and conventional banks, we find that strong boards in general serve their shareholders through engaging in higher risk-taking activities across both types of banks. In Islamic banks, however, the Shari’ah Supervisory Board (SSB) is found to mitigate risk-taking when integrated with a strong board, as religiosity restrains risk-taking.

Keywords: Strong board; SSB; religiosity; risk-taking; Islamic banks; conventional banks (search for similar items in EconPapers)
JEL-codes: G21 G32 G34 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Strong Boards and Risk-taking in Islamic Banks (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:now:jnlrcf:114.00000004

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