Moderating Role of Shariah Committee Quality in the Effect of Board of Directors Effectiveness on Performance of Takaful Companies in Pakistan

Abrar Ahmed and Danish Ahmed Siddiqui

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Abstract: Objective: This study examines the effect of Board of Directors (BOD) effectiveness on the performance of Takaful companies in Pakistan, with a focus on the moderating role of Shariah Committee quality. It aims to assess how governance elements influence firm performance in the Islamic finance context. Sampling: The study uses panel data from 14 Takaful firms in Pakistan, covering a five-year period (2018-2022). Data were sourced from annual reports and official governance disclosures. Methodology: A quantitative approach is used, employing multiple regression analysis with interaction effects to test the relationships between BOD effectiveness, Shariah committee quality, and firm performance (measured by ROA, ROE, and Tobin's Q). Results: The findings reveal that Board Independence, Shariah Committee Expertise, and Shariah Committee Independence significantly improve firm performance. Conversely, CEO Duality, Shariah Committee Size, and Meeting Frequency show no significant impact. Implications and Significance: The results highlight the importance of board independence and Shariah competence over structural factors. This study offers empirical guidance for regulators, policymakers, and Takaful firms to strengthen governance frameworks and enhance performance through high-quality dual governance.

Keywords: Takaful; Board of Directors; Shariah Committee Quality; Corporate Governance; Firm Performance; Islamic Insurance; Islamic Finance (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:341015

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