The Influence of Board of Directors Personal Characteristics On the Work Performance of Sharia Bank: The Sharia Supervisory Board's Function as a Moderating Variable
Keywords:
Characters of the board of directors; Sharia bank performance; Sharia Supervisory Board
Abstract
The purpose of this study is to provide empirical evidence about the effect of size, educational background, and board independence on the performance of Sharia bank, as well as the role of the Sharia supervisory board in moderating the effect of size, educational background, and board independence on Sharia bank performance. From 2015 through 2021, the sample for this study is Sharia commercial banks and Sharia business units. Purposive sampling is used in the corporate sampling methodology. According to the findings of this study, the size and independence of the board of directors have a favorable and significant impact on the performance of Sharia bank, however educational background has no impact on the performance of Sharia bank. The Sharia supervisory board is proven to moderate the influence of size, educational background, and independence of the board of directors on the performance of Sharia bank.
References
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Adusei, M. (2011). Board structure and bank performance in Ghana. Journal of Money, Investment and Banking, 19(1), 72-84.
Aebi, V., Sabato, G., & Schmid, M. (2012). Risk management, corporate governance, and bank performance in the financial crisis. Journal of Banking & Finance, 36(12), 3213-3226.
Ajili, H. & Bouri, A. (2018). Corporate governance quality of Islamic banks: measurement and effect on financial performance. International Journal of Islamic and Middle Eastern Finance and Management, Vol. 11 No. 3, pp. 470-487
Al‐Saidi, M., & Al‐Shammari, B. (2013). Board composition and bank performance in Kuwait: an empirical study. Managerial auditing journal.
Audio, R., & Serly, V. (2022). Pengaruh Karakteristik Dewan Direksi terhadap Kinerja Bank Sharia. Jurnal Eksplorasi Akuntansi, 4(1), 232-247.
Bendickson, J., Muldoon, J., Liguori, E., & Davis, P. E. (2016). Agency theory: the times, they are a-changin’. Management decision.
Belkhir, M. (2009). Board of directors' size and performance in the banking industry. International Journal of Managerial Finance.
Bukair, A. A., & Rahman, A. A. (2015). Bank performance and board of directors attributes by Islamic banks. International Journal of Islamic and Middle Eastern Finance and Management.
Chahine, S., & Safieddine, A. (2011). Is corporate governance different for the Lebanese banking system?. Journal of Management & Governance, 15(2), 207-226.
Dewayanto, Totok. 2010. Pengaruh Mekanisme Good Corporate Governance terhadap Kinerja Perbankan Nasional Studi pada Perusahaan Perbankan yang terdaftar di Bursa Efek Indonesia Periode 2006-2008. Fokus Ekonomi. Vol. 5 No.2. p. 104-123.
Doğan, B., & Ekşi, İ. H. (2020). The effect of board of directors characteristics on risk and bank performance: Evidence from Turkey. Economics and Business Review, 6(3), 88-104.
Dong, Y., Girardone, C., & Kuo, J. M. (2017). Governance, efficiency and risk taking in Chinese banking. The British Accounting Review, 49(2), 211-229.
Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of management review, 14(1), 57-74.
Elsharkawy, M., Paterson, A., & Sherif, M. (2018). Now you see me: Diversity, CEO education, and bank performance in the UK. Investment management and financial innovations.
Falato, A., Li, D., & Milbourn, T. (2015). Which skills matter in the market for CEOs? Evidence from pay for CEO credentials. Management Science, 61(12), 2845-2869.
Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. The journal of law and Economics, 26(2), 301-325.
Freihat, A. F., Farhan, A., & Shanikat, M. (2019). Do board of directors characteristics influence firm performance? evidence from the emerging market. Journal of Management Information and Decision Sciences, 22(2), 148-166.
Gafoor, C. A., Mariappan, V., & Thiyagarajan, S. (2018). Board characteristics and bank performance in India. IIMB management review, 30(2), 160-167.
Gottesman, A. A., & Morey, M. R. (2010). CEO educational background and firm financial performance. Journal of Applied Finance (Formerly Financial Practice and Education), 20(2).
Grais, W., & Pellegrini, M. (2006). Corporate governance and Shariah compliance in institutions offering Islamic financial services (Vol. 4054). World Bank Publications.
Hidayat, R., Umam, R., & Tripalupi, R. I. (2021). Kinerja Keuangan Perbankan Sharia Pada Masa Covid-19 Dan Strategi Peningkatannya. Finansha: Journal of Sharia Financial Management, 2(2), 77-91.
Ilyas, R. (2021). Peran Dewan Pengawas Sharia Dalam Perbankan Sharia. JPS (Jurnal Perbankan Sharia), 2(1), 42-53.
Jalbert, T., Jalbert, M., & Furumo, K. (2011). Does AACSB accreditation matter? Evidence from large firm CEOs. Journal of Applied Business Research, 27(3), 93-106.
Jensen, M.C. and W.H. Meckling. (1976), “Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure”, Journal of Financial Economics 3 (4), 305-360
Johl, S.K., Kaur, S., & Cooper, B.J. (2015). Board Characteristics and Firm Performance: Evidence from Malaysian Public Listed Firms. Journal of Economics, Business and Management, 3(2), 239–243
Juras, P. E., & Hinson, Y. L. (2008). Examining The Effect of Board Characteristics on Agency Costs And Selected Performance Measures In Banks. Academy of Banking Studies Journal, 7.
Kanakriyah, R. (2021). The impact of board of directors' characteristics on firm performance: a case study in Jordan. The Journal of Asian Finance, Economics and Business, 8(3), 341-350.
Kusumastuti, S., Supatmi, S., & Sastra, P. (2007). Pengaruh board diversity terhadap nilai perusahaan dalam perspektif corporate governance. Jurnal Akuntansi dan Keuangan, 9(2), 88-98.
Lee, S. K., & Carlson, L. R. (2007). The changing board of directors: Board independence in S & P 500 firms. Journal of Organizational Culture, Communications and Conflict, 11(1), 31.
Liang, Q., Xu, P., & Jiraporn, P. (2013). Board characteristics and Chinese bank performance. Journal of Banking & Finance, 37(8), 2953-2968.
Mamatzakis, E., & Bermpei, T. (2015). The effect of corporate governance on the performance of US investment banks. Financial Markets, Institutions & Instruments, 24(2-3), 191-239.
Masykuroh, E. (2012). Eksistensi DPS dalam Memoderasi Pengaruh Pembiayaan, Kinerja Keuangan dan Pengungkapan CSR pada Bank Umum Sharia di Indonesia. Al-Tahrir: Jurnal Pemikiran Islam, 12(1), 113-132.
Matoossi, H., & Grassa, R. (2014). Is corporate governance different for Islamic banks?. International Journal of Business Governance and Ethics, 9(1), 27-51.
Mollah, S., & Zaman, M. (2015). Shari’ah supervision, corporate governance and performance: Conventional vs. Islamic banks. Journal of Banking & Finance, 58, 418-435.
Mulyaningsih, T., Adhitya, D., & Rosalia, A. C. T. (2021). Education, skills and labour market outcome in Indonesia: An instrumental variable approach. Economic Journal of Emerging Markets, 168-177.
Nahar, S., Azim, M., & Jubb, C. (2016). The determinants of risk disclosure by banking institutions: Evidence from Bangladesh. Asian Review of Accounting.
Ness, R. K., Miesing, P., & Kang, J. (2010). Board of director composition and financial performance in a Sarbanes-Oxley world. Academy of Business and Economics Journal, 10(5), 56-74.
Nomran, N. M., Haron, R., & Hassan, R. (2018). Shari’ah supervisory board characteristics effects on Islamic banks’ performance: Evidence from Malaysia. International Journal of Bank Marketing.
Papadimitri, P., Pasiouras, F., Tasiou, M., & Ventouri, A. (2020). The effects of board of directors’ education on firms’ credit ratings. Journal of Business Research, 116, 294-313.
Pathan, S., & Faff, R. (2013). Does board structure in banks really affect their performance?. Journal of Banking & Finance, 37(5), 1573-1589.
Pathan, S., & Skully, M. (2010). Endogenously structured boards of directors in banks. Journal of Banking & Finance, 34(7), 1590-1606.
Patulak, M. R., Tania, M., Pratitha, N. K., & Wafaretta, V. (2022). Peran Dewan Pengawas Sharia dalam Perbankan Sharia di Indonesia. In Prosiding National Seminar on Accounting, Finance, and Economics (NSAFE), Vol. 2 (7).
O’Sullivan, J., Mamun, A., & Hassan, M. K. (2016). The relationship between board characteristics and performance of bank holding companies: Before and during the financial crisis. Journal of Economics and Finance, 40(3), 438-471.
Rachdi, H., & Ameur, I. G. B. (2011). Board characteristics, performance and risk taking behaviour in Tunisian banks. International Journal of Business and Management, 6(6), 88-97.
Raman, A. A., & Bukair, A. A. (2013). The influence of the Shariah supervision board on corporate social responsibility disclosure by Islamic banks of Gulf Co-operation Council countries. Asian Journal of Business and Accounting, 6(2).
Sakawa, H., & Watanabel, N. (2018). Board structures and performance in the banking industry: Evidence from Japan. International Review of Economics & Finance, 56, 308-320.
Salim, R., Arjomandi, A., & Seufert, J. H. (2016). Does corporate governance affect Australian banks' performance?. Journal of International Financial Markets, Institutions and Money, 43, 113-125.
Sarkar, J., & Sarkar, S. (2018). Bank ownership, board characteristics and performance: Evidence from commercial banks in India. International Journal of Financial Studies, 6(1), 17.
Shukeri, S.N., Shin,O.W., &Shaari,M.S. (2012). Does board directors characteristics affect firm performance? Evidence from Malaysian public listed companies. International Business Research.
Syafirqurrahman, M., Andiarsyah, W., & Suciningsih, W. (2014). Analisis pengaruh corporate governance dan pengaruh keputusan pendanaan terhadap kinerja perusahaan perbankan di indonesia. Jurnal Akuntansi, 18(1), 21-44.
Uadiale, O.M. (2010). The Impact of Board Structure on Corporate Financial Performance in Nigeria. International Journal of Business and Management, 5 (10)
Widyati, M.F. (2013). Pengaruh Dewan Direksi, Komisaris Independen, KomiteAudit, Kepemilikan Manajerial dan Kepemilikan Institusional Terhadap Kinerja Keuangan. Jurnal Ilmu Manajemen, 1-(1), 234–249.
Yeh, Y. H., Chung, H., & Liu, C. L. (2011). Committee independence and financial institution performance during the 2007-08 credit crunch: Evidence from a multi-country study. Corporate Governance-An International Review, 19(5), 437-458.
Zaharman, Z., Arini, A., & Novianti, S. (2022). Analisis Perkembangan Aset, Pembiayaan, Dan Dana Pihak Ketiga Perbankan Sharia Di Indonesia Dimasa Pandemi Covid-19. Jurnal Akuntansi Kompetif, 5(2), 174-179.
Adusei, M. (2011). Board structure and bank performance in Ghana. Journal of Money, Investment and Banking, 19(1), 72-84.
Aebi, V., Sabato, G., & Schmid, M. (2012). Risk management, corporate governance, and bank performance in the financial crisis. Journal of Banking & Finance, 36(12), 3213-3226.
Ajili, H. & Bouri, A. (2018). Corporate governance quality of Islamic banks: measurement and effect on financial performance. International Journal of Islamic and Middle Eastern Finance and Management, Vol. 11 No. 3, pp. 470-487
Al‐Saidi, M., & Al‐Shammari, B. (2013). Board composition and bank performance in Kuwait: an empirical study. Managerial auditing journal.
Audio, R., & Serly, V. (2022). Pengaruh Karakteristik Dewan Direksi terhadap Kinerja Bank Sharia. Jurnal Eksplorasi Akuntansi, 4(1), 232-247.
Bendickson, J., Muldoon, J., Liguori, E., & Davis, P. E. (2016). Agency theory: the times, they are a-changin’. Management decision.
Belkhir, M. (2009). Board of directors' size and performance in the banking industry. International Journal of Managerial Finance.
Bukair, A. A., & Rahman, A. A. (2015). Bank performance and board of directors attributes by Islamic banks. International Journal of Islamic and Middle Eastern Finance and Management.
Chahine, S., & Safieddine, A. (2011). Is corporate governance different for the Lebanese banking system?. Journal of Management & Governance, 15(2), 207-226.
Dewayanto, Totok. 2010. Pengaruh Mekanisme Good Corporate Governance terhadap Kinerja Perbankan Nasional Studi pada Perusahaan Perbankan yang terdaftar di Bursa Efek Indonesia Periode 2006-2008. Fokus Ekonomi. Vol. 5 No.2. p. 104-123.
Doğan, B., & Ekşi, İ. H. (2020). The effect of board of directors characteristics on risk and bank performance: Evidence from Turkey. Economics and Business Review, 6(3), 88-104.
Dong, Y., Girardone, C., & Kuo, J. M. (2017). Governance, efficiency and risk taking in Chinese banking. The British Accounting Review, 49(2), 211-229.
Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of management review, 14(1), 57-74.
Elsharkawy, M., Paterson, A., & Sherif, M. (2018). Now you see me: Diversity, CEO education, and bank performance in the UK. Investment management and financial innovations.
Falato, A., Li, D., & Milbourn, T. (2015). Which skills matter in the market for CEOs? Evidence from pay for CEO credentials. Management Science, 61(12), 2845-2869.
Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. The journal of law and Economics, 26(2), 301-325.
Freihat, A. F., Farhan, A., & Shanikat, M. (2019). Do board of directors characteristics influence firm performance? evidence from the emerging market. Journal of Management Information and Decision Sciences, 22(2), 148-166.
Gafoor, C. A., Mariappan, V., & Thiyagarajan, S. (2018). Board characteristics and bank performance in India. IIMB management review, 30(2), 160-167.
Gottesman, A. A., & Morey, M. R. (2010). CEO educational background and firm financial performance. Journal of Applied Finance (Formerly Financial Practice and Education), 20(2).
Grais, W., & Pellegrini, M. (2006). Corporate governance and Shariah compliance in institutions offering Islamic financial services (Vol. 4054). World Bank Publications.
Hidayat, R., Umam, R., & Tripalupi, R. I. (2021). Kinerja Keuangan Perbankan Sharia Pada Masa Covid-19 Dan Strategi Peningkatannya. Finansha: Journal of Sharia Financial Management, 2(2), 77-91.
Ilyas, R. (2021). Peran Dewan Pengawas Sharia Dalam Perbankan Sharia. JPS (Jurnal Perbankan Sharia), 2(1), 42-53.
Jalbert, T., Jalbert, M., & Furumo, K. (2011). Does AACSB accreditation matter? Evidence from large firm CEOs. Journal of Applied Business Research, 27(3), 93-106.
Jensen, M.C. and W.H. Meckling. (1976), “Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure”, Journal of Financial Economics 3 (4), 305-360
Johl, S.K., Kaur, S., & Cooper, B.J. (2015). Board Characteristics and Firm Performance: Evidence from Malaysian Public Listed Firms. Journal of Economics, Business and Management, 3(2), 239–243
Juras, P. E., & Hinson, Y. L. (2008). Examining The Effect of Board Characteristics on Agency Costs And Selected Performance Measures In Banks. Academy of Banking Studies Journal, 7.
Kanakriyah, R. (2021). The impact of board of directors' characteristics on firm performance: a case study in Jordan. The Journal of Asian Finance, Economics and Business, 8(3), 341-350.
Kusumastuti, S., Supatmi, S., & Sastra, P. (2007). Pengaruh board diversity terhadap nilai perusahaan dalam perspektif corporate governance. Jurnal Akuntansi dan Keuangan, 9(2), 88-98.
Lee, S. K., & Carlson, L. R. (2007). The changing board of directors: Board independence in S & P 500 firms. Journal of Organizational Culture, Communications and Conflict, 11(1), 31.
Liang, Q., Xu, P., & Jiraporn, P. (2013). Board characteristics and Chinese bank performance. Journal of Banking & Finance, 37(8), 2953-2968.
Mamatzakis, E., & Bermpei, T. (2015). The effect of corporate governance on the performance of US investment banks. Financial Markets, Institutions & Instruments, 24(2-3), 191-239.
Masykuroh, E. (2012). Eksistensi DPS dalam Memoderasi Pengaruh Pembiayaan, Kinerja Keuangan dan Pengungkapan CSR pada Bank Umum Sharia di Indonesia. Al-Tahrir: Jurnal Pemikiran Islam, 12(1), 113-132.
Matoossi, H., & Grassa, R. (2014). Is corporate governance different for Islamic banks?. International Journal of Business Governance and Ethics, 9(1), 27-51.
Mollah, S., & Zaman, M. (2015). Shari’ah supervision, corporate governance and performance: Conventional vs. Islamic banks. Journal of Banking & Finance, 58, 418-435.
Mulyaningsih, T., Adhitya, D., & Rosalia, A. C. T. (2021). Education, skills and labour market outcome in Indonesia: An instrumental variable approach. Economic Journal of Emerging Markets, 168-177.
Nahar, S., Azim, M., & Jubb, C. (2016). The determinants of risk disclosure by banking institutions: Evidence from Bangladesh. Asian Review of Accounting.
Ness, R. K., Miesing, P., & Kang, J. (2010). Board of director composition and financial performance in a Sarbanes-Oxley world. Academy of Business and Economics Journal, 10(5), 56-74.
Nomran, N. M., Haron, R., & Hassan, R. (2018). Shari’ah supervisory board characteristics effects on Islamic banks’ performance: Evidence from Malaysia. International Journal of Bank Marketing.
Papadimitri, P., Pasiouras, F., Tasiou, M., & Ventouri, A. (2020). The effects of board of directors’ education on firms’ credit ratings. Journal of Business Research, 116, 294-313.
Pathan, S., & Faff, R. (2013). Does board structure in banks really affect their performance?. Journal of Banking & Finance, 37(5), 1573-1589.
Pathan, S., & Skully, M. (2010). Endogenously structured boards of directors in banks. Journal of Banking & Finance, 34(7), 1590-1606.
Patulak, M. R., Tania, M., Pratitha, N. K., & Wafaretta, V. (2022). Peran Dewan Pengawas Sharia dalam Perbankan Sharia di Indonesia. In Prosiding National Seminar on Accounting, Finance, and Economics (NSAFE), Vol. 2 (7).
O’Sullivan, J., Mamun, A., & Hassan, M. K. (2016). The relationship between board characteristics and performance of bank holding companies: Before and during the financial crisis. Journal of Economics and Finance, 40(3), 438-471.
Rachdi, H., & Ameur, I. G. B. (2011). Board characteristics, performance and risk taking behaviour in Tunisian banks. International Journal of Business and Management, 6(6), 88-97.
Raman, A. A., & Bukair, A. A. (2013). The influence of the Shariah supervision board on corporate social responsibility disclosure by Islamic banks of Gulf Co-operation Council countries. Asian Journal of Business and Accounting, 6(2).
Sakawa, H., & Watanabel, N. (2018). Board structures and performance in the banking industry: Evidence from Japan. International Review of Economics & Finance, 56, 308-320.
Salim, R., Arjomandi, A., & Seufert, J. H. (2016). Does corporate governance affect Australian banks' performance?. Journal of International Financial Markets, Institutions and Money, 43, 113-125.
Sarkar, J., & Sarkar, S. (2018). Bank ownership, board characteristics and performance: Evidence from commercial banks in India. International Journal of Financial Studies, 6(1), 17.
Shukeri, S.N., Shin,O.W., &Shaari,M.S. (2012). Does board directors characteristics affect firm performance? Evidence from Malaysian public listed companies. International Business Research.
Syafirqurrahman, M., Andiarsyah, W., & Suciningsih, W. (2014). Analisis pengaruh corporate governance dan pengaruh keputusan pendanaan terhadap kinerja perusahaan perbankan di indonesia. Jurnal Akuntansi, 18(1), 21-44.
Uadiale, O.M. (2010). The Impact of Board Structure on Corporate Financial Performance in Nigeria. International Journal of Business and Management, 5 (10)
Widyati, M.F. (2013). Pengaruh Dewan Direksi, Komisaris Independen, KomiteAudit, Kepemilikan Manajerial dan Kepemilikan Institusional Terhadap Kinerja Keuangan. Jurnal Ilmu Manajemen, 1-(1), 234–249.
Yeh, Y. H., Chung, H., & Liu, C. L. (2011). Committee independence and financial institution performance during the 2007-08 credit crunch: Evidence from a multi-country study. Corporate Governance-An International Review, 19(5), 437-458.
Zaharman, Z., Arini, A., & Novianti, S. (2022). Analisis Perkembangan Aset, Pembiayaan, Dan Dana Pihak Ketiga Perbankan Sharia Di Indonesia Dimasa Pandemi Covid-19. Jurnal Akuntansi Kompetif, 5(2), 174-179.
Published
2023-07-08
How to Cite
Andarini, I., & Wahyuni, S. (2023). The Influence of Board of Directors Personal Characteristics On the Work Performance of Sharia Bank: The Sharia Supervisory Board’s Function as a Moderating Variable. Asian Journal of Management, Entrepreneurship and Social Science, 3(03), 631-657. Retrieved from https://mail.ajmesc.com/index.php/ajmesc/article/view/399
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