Determinants of Sustainability Reporting of Islamic Banks in Emerging Countries

Afifah Oki Nilasakti, Falikhatun Falikhatun

Abstract


This study aims to determine the effect of Islamic corporate governance and slack resources on sustainability reporting of Islamic Commercial Banks in Indonesia and Malaysia from 2015-2018. The corporate governance in this study consists of sharia supervisory board, the size, board of directors meeting, and audit committee. This is a quantitative study that used secondary data such as the annual and sustainability report. The reporting proxy was measured by the content analysis method which consisted of 78 items from the six dimensions adopted disclosure of AAOIFI. Furthermore, the analysis technique used was panel data regression with Random Effect Model (REM) as the estimation model. The results showed that the sharia supervisory board has a negative effect on sustainability reporting, while the board size, audit committee, and slack resources have a positive effect. Meanwhile, the board of directors' meeting has no effect on sustainability reporting. Therefore, the related government agencies such as Otoritas Jasa Keuangan (Financial Service Authority/FSA) and Bank Negara Malaysia are able to consider that the regulation related to the composition of sharia supervisory board for banking is in line with international ideal standards.

 


Keywords


Islamic corporate governance; sharia commercial bank; slack resources; sustainability reporting

Full Text:

PDF

References


Abdullah, W. A. W., Percy, M., & Stewart, J. (2013). Shari’ah Disclosures in Malaysian and Indonesian Islamic banks: The Shari’ah Governance System. Journal of Islamic Accounting and Business Research, 4(2), 100–131. https://doi.org/10.1108/JIABR-10-2012-0063.

Adams, R. B., Hermalin, B. E. & Weisbach, M. S. (2010). The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey. Journal of Economic Literature, 48(1), 58-107.

Akhtaruddin, M., Hossain, M. A., Hossain, M. & Yao. L. (2009). Corporate Governance and Voluntary Disclosure in Corporate Annual Reports of Malaysian Listed Firms. Journal of Applied Management Accounting Research, 7(1), 1-20.

Al-Baidhani, A. M. (2014). The Role of Audit Committee in Corporate Governance : Descriptive Study. International Journal of Research & Methodology in Social Science, 2(2), 45-57.

Anggraeni, D. Y., & Djakman, C. D. (2017). Slack Resources, Feminisme Dewan, dan Kualitas Pengungkapan Tanggung Jawab Sosial Perusahaan. Jurnal Akuntansi dan Keuangan Indonesia, 14(1), 94–118. https://doi.org/10.21002/jaki.2017.06.

Aniktia, R., & Khafid, M. (2015). Pengaruh Mekaniseme Good Corporate Governance dan Kinerja Keuangan Terhadap Pengungkapan Sustainability Report. Accounting Analysis Journal, 4(3), 1–10. https://doi.org/10.15294/aaj.v4i3.8303.

Arora, P., & Dharwadkar, R. (2011). Corporate Governance and Corporate Social Responsibility (CSR): The Moderating Roles of Attainment Discrepancy and Organization Slack. Corporate Governance: An International Review, 19(2), 136–152. https://doi.org/10.1111/j.1467-8683.2010.00843.x.

Baydoun, N., & Willett, R. (2000). Islamic Corporate Reports. Abacus, 36(1), 71–90. https://doi.org/10.1111/1467-6281.00054.

Bastina, A. D., & Bernawati, Y. (2019). Sharia Supervisory Board, Audit Committee, and Corporate Social Responsibility Disclosure. Jurnal Akuntansi, 23(3), 349. https://doi.org/10.24912/ja.v23i3.600.

Bourgeois, L. J., III. (1981). On the Measurement of Organizational Slack. The Academy of Management Review, 6(1), 29-39. https://doi.org/10.2307/257138.

Branco, M. C., & Rodrigues. L. L. (2006). Corporate Social Responsibility and Resource-Based Perspective. Journal of Business Ethics, 69(2), 111-132. DOI: 10.1007/s10551-006-9071-z.

Buallay, A. M., & AlDhaen, E. S. (2018). The Relationship between Audit Committee Characteristics. 17th IFIP International Federation for Information Processing, 3 (11195), 492–503. https://doi.org/10.1007/978-3-030-02131-3_44.

Bukair, A. A., & Rahman, A. A. (2015). The Effect of the Board of Directors’ Characteristics on Corporate Social Responsibility Disclosure by Islamic Banks. Journal of Management Research, 7(2), 506. https://doi.org/10.5296/jmr.v7i2.6989.

Darus, F., Mad, S., & Yusoff, H. (2014). The Importance of Ownership Monitoring and Firm Resources on Corporate Social Responsibility (CSR) of Financial Institutions. Procedia - Social and Behavioral Sciences, 145, 173–180. https://doi.org/10.1016/j.sbspro.2014.06.024.

El Hussein, N. H. A. (2018). The Sharia Supervisory Board: Does it Influence Corporate Social Responsibility Disclosure by Islamic Banks? A Review. Journal of Islamic Studies and Culture, 6(1), 121–132. https://doi.org/10.15640/jisc.v6n1a13.

Farook, S., Hassan, M. K., & Lanis, R. (2011). Determinants of Corporate Social Responsibility Disclosure: The Case of Islamic Banks. Journal of Islamic Accounting and Business Research, 2(2), 114–141. https://doi.org/10.1108/17590811111170539.

Foss, N. J., & Christensen, J. F. (2001). A Market-Process Approach to Corporate Coherence. Managerial and Decision Economics, 22 (4/5), 213-26.

Haniffa, R. M., & Cooke, T. E. (2002). Culture, Corporate Governance and Disclosure in Malaysian Corporations. Abacus, 38(3), 317–349. DOI: 10.1111/1467-6281.00112.

Hasanah, N., Syam, D., & Jati, A. W. (2017). Pengaruh Corporate Governance terhadap Pengungkapan Sustainability Report pada Perusahaan di Indonesia. Jurnal Reviu Akuntansi dan Keuangan, 5(1). 711-720. DOI: https://doi.org/10.22219/jrak.v5i1.4992.

Hodgson, G. M. (1998). The Approach of Institutional Economics. Journal of Economic Literature, 36(1), 166 – 192.

Hu, M., & Loh, L. (2018). Board Governance and Sustainability Disclosure: A Cross-Sectional Study of Singapore-Listed Companies. Sustainability, 10(7). https://doi.org/10.3390/su10072578.

Ika, S. R., Dwiwinarno, T., & Widagdo, A. K. (2017). Corporate Social Responsibility and Corporate Governance in Indonesian Public Listed Companies. SHS Web of Conferences, 34 (40), 1–11. DOI: 10.1051/shsconf/20173413002.

Ju Ahmad, N. B., Rashid, A., & Gow, J. (2017). Board Meeting Frequency and Corporate Social Responsibility (CSR) Reporting: Evidence from Malaysia. Corporate Board Role Duties and Composition, 13(1), 87–99. https://doi.org/10.22495/cbv13i1c1art3.

Khasanah, Z., & Yulianto, A. (2015). Islamic Corporate Governance dan Pengungkapan Islamic Social Reporting Pada Bank Umum Syariah. Accounting Analysis Journal, 4(4), 1–10. https://doi.org/10.15294/aaj.v4i4.9108.

Khoirudin, A. (2013). Corporate Governance dan Pengungkapan Islamic Social Responsibility pada Perbankan Syariah di Indonesia. Accounting Analysis Journal, 2(2), 227-232. https://doi.org/10.15294/aaj.v2i2.2919.

Kim, S. I., Shin, H., Shin, H., & Park, S. (2019). Organizational Slack, Corporate Social Responsibility, Sustainability, and Integrated Reporting: Evidence from Korea. Sustainability, 11(16), 1-17. https://doi.org/10.3390/su11164445.

Latifah, S. W., Rosyid, M. F., Purwanti, L., & Oktavendi, T. W. (2019). Good Corporate Governance, Kinerja Keuangan dan Sustainability Report (BUMN yang listed di BEI). Jurnal Reviu Akuntansi dan Keuangan, 9(2), 200–213. https://doi.org/10.22219/jrak.v9i2.56.

Mahmood, Z., Kouser, R. Ali, W., Ahmad, Z., & Salman, T. (2018). Does Corporate Governance Affect Sustainability Disclosure ? A Mixed Methods Study. Sustainability, 10(1), 1–20. https://doi.org/10.3390/su10010207.

Mukhibad, H. (2018). Peran Dewan Pengawas Syariah Dalam Pengungkapan Islamic Sosial Reporting. Jurnal Akuntansi Multiparadigma, 9(2), 299–311. https://doi.org/10.18202/jamal.2018.04.9018.

Prasojo, P. (2015). Pengaruh Penerapan Good Corporate Governance terhadap Kinerja Keuangan Bank Syariah. Jurnal Dinamika Akuntansi dan Bisnis, 2(1), 59–69.

Pratama, A., & Yulianto, A. (2015). Faktor Keuangan dan Corporate Governance Sebagai Penentu Pengungkapan Sustainability Report. Accounting Analysis Journal, 4(2), 1–10. https://doi.org/10.15294/aaj.v4i2.7863.

Shamil, M. M., Shaikh, J. M., Ho, P, & Krishnan, A. (2014). The Influence of Board Characteristics on Sustainability Reporting: Empirical Evidence from Sri Lanka Firms. Asian Review of Accounting, 22(2), 78–97. http://doi.org/10.1108/ARA-09-2013-0060.

Siswanti, I., Salim, U., Sukoharsono, E. G., & Aisjah, S. (2017). The Impact of Islamic Corporate Governance, Islamic Intellectual Capital and Islamic Financial Performance on Sustainable Business Islamic Banks. International Journal of Economics and Financial Issues, 7(4), 316–323.

Sukmadilaga, C., & Lestari, T. U. (2017). Factors That Affect Islamic Corporate Governance. Proceeding of 1st International Conference on Islamic Economics, Business and Philanthropy. 112-117. DOI:10.5220/0007077801120117.

Suryono, H., & Prastiwi, A. (2011). Pengaruh Karakteristik Perusahaan dan Corporate Governance (CG) Terhadap Praktik Pengungkapan Sustainability Report (SR) ( Studi Pada Perusahaan – Perusahaan yang Listed (Go-Public) di Bursa Efek Indonesia (BEI) Periode 2007 - 2009). Simposium Nasional Akuntansi XIV Aceh, 1-32.

Xu, E., Yang, H., Quan, J. M., & Lu, Y. (2015). Organizational Slack and Corporate Social Performance: Empirical Evidence From China’s Public Firms. Asia Pacific Journal of Management, 32(1). 181-198. https://doi.org/10.1007/s10490-014-9401-0.

Websites:

http://aaoifi.com

https://asean-csrnetwork.org

https://bis.org

https://finance.detik.com

https://hrasiamedia.com

https://kemenkeu.go.id

https://ram.com.my

https://webforms.ey.com




DOI: https://doi.org/10.18326/muqtasid.v11i2.149-161

Refbacks

  • There are currently no refbacks.




                                                                

Creative Commons License

MUQTASID by http://muqtasid.iainsalatiga.ac.id/ is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

MUQTASID Jurnal Ekonomi dan Perbankan Syariah IAIN SALATIGA p-ISSN: 2087-7013, e-ISSN: 2527-8304