Please cite this article as: Mollah, S., Zaman, M., Shari'ah supervision, corporate governance and performance: conventional vs. islamic banks, Journal of Banking & Finance (2015), doi: http://dx. AbstractThe performance and accountability of boards of directors and effectiveness of governance mechanisms continue to be a matter of concern. Focusing on differences between conventional banks and Islamic banks, we examine the effect of (i) Shari'ah supervision boards, (ii) board structure and (iii) CEO-power on performance during the period 2005-2011. We find Shari'ah supervision boards positively impact on Islamic banks' performance when they perform a supervisory role, but the impact is negligible when they have only an advisory role. The effect of board structure (board size and board independence) and CEO power (CEO-chair duality and internally recruited CEO) on the performance of Islamic banks is overall negative. Our findings provide support for the positive contribution of Shari'ah supervision boards but also emphasize the need for enforcement and regulatory mechanism for them to be more effective.

PurposeThis paper seeks to investigate the conditions and processes affecting the operation and potential effectiveness of audit committees (ACs), with particular focus on the interaction between the AC, individuals from financial reporting and internal audit functions and the external auditors.Design/methodology/approachA case study approach is employed, based on direct engagement with participants in AC activities, including the AC chair, external auditors, internal auditors, and senior management.FindingsThe authors find that informal networks between AC participants condition the impact of the AC and that the most significant effects of the AC on governance outcomes occur outside the formal structures and processes. An AC has pervasive behavioural effects within the organization and may be used as a threat, an ally and an arbiter in bringing solutions to issues and conflicts. ACs are used in organizational politics, communication processes and power plays and also affect interpretations of events and cultural values.Research limitations/implicationsFurther research on AC and governance processes is needed to develop better understanding of effectiveness. Longitudinal studies, focusing on the organizational and institutional context of AC operations, can examine how historical events in an organization and significant changes in the regulatory environment affect current structures and processes.Originality/valueThe case analysis highlights a number of significant factors which are not fully recognised either in theorizing the governance role of ACs or in the development of policy and regulations concerning ACs but which impinge on their governance contribution. They include the importance of informal processes around the AC; its influence on power relations between organizational participants; the relevance of the historical development of governance in an organization; and the possibility that the AC's impact on governance may be greatest in non‐routine situations.

This paper extends prior research on the relationship between governance quality and auditor remuneration. We examine the influence of audit committee effectiveness (ACE), a proxy for governance quality, on audit fees (AF) and non-audit services fees (NASF) using a new composite measure comprising audit committee independence, expertise, diligence and size. We find that after controlling for board of director characteristics, there is a significant positive association between ACE and AF only for larger clients. Our results indicate that effective audit committees undertake more monitoring which results in wider audit scope and higher audit fees. Contrary to our expectations, we find the association between ACE and NASF to be positive and significant, especially for larger clients. This suggests that larger clients are more likely to purchase non-audit services (NAS) even in the presence of effective audit committees probably due to the complexity of their activities. Overall, our findings support regulatory initiatives aimed at improving corporate governance quality.

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence Newcastle University ePrints -eprint.ncl.ac.uk Al-Shaer H, Zaman M. Board gender diversity and sustainability reporting quality.

accountability, audit committee effectiveness, audit committee research, corporate governance,

Concerns about the credibility of sustainability reports can be mitigated through assurance. Although audit committee remit encompasses monitoring of sustainability issues, there are potential complementary and substitution issues between governance mechanisms. This paper explores the relationship between audit committees and sustainability reporting assurance using resource dependency theory. We find audit committee characteristics have an impact, additional to that of the board of directors and the existence of sustainability committees, on voluntary sustainability assurance. Our results also show that audit committee independence is associated with use of a Big Four audit firm for sustainability assurance. A negative association between sustainability committees and assurance, however, indicates assurance could be a burden for small firms. Overall, the findings suggest audit committees add credibility and help improve sustainability reporting through their independence, expertise and oversight.

In response to corporate failures in many countries both regulatory and professional bodies have widely promoted audit committees. This paper seeks evidence from an examination of the most recent corporate governance codes issued by 20 countries of convergence in corporate governance systems in Europe by examining the extent to which the audit committee concept (with its Anglo-Saxon origin) has been adopted in Europe.The analyses show that there has been a degree of convergence towards an Anglo-Saxon model of corporate governance as the audit committee concept is widely accepted. However, consistent with the literature on the convergence of European corporate governance systems, the recommendations of the governance codes are not consistent in the specification of a number of factors that contribute to their effectiveness -membership, independence, financial expertise, and roles. A further analysis of the changes in the codes in a number of the countries examined over a period of time revealed a gradual move towards the AngloSaxon model. In particular, there was evidence of the recent inclusion in the codes of a number of European countries of a number of the recommendations of the Blue Ribbon Committee (1999) and Higgs Report (2003), which envisage a proactive rather than passive role for audit committees.

Parent-subsidiary relationships are commonplace nowadays, yet surprisingly there is a paucity of research analysing their dynamics over time. This paper presents a (longitudinal) case study, illuminating the dynamics implicated when a UK chemicals company imposed its systems and rules on a new subsidiary. Drawing on observations from a longitudinal case study (from 1993 to 2001), the study considers: (1) the extent to which a parent imposes its (management accounting) systems, rules and procedures on a subsidiary; (2) the role which (local) political, cultural and institutional factors in a subsidiary play in shaping the dynamics of such change implementation; (3) how new systems and practices become accepted and take root as values and beliefs and how they supplement earlier norms? The study provides insight for the questions above, and draws on institutional theories and a power mobilisation framework to assist in the interpretation of observations. We find that the operations of the subsidiary company are influenced by inter-related forces, both inside and outside the organisation encompassing issues of power, politics and culture. As such, existing institutions in a subsidiary organisation are influenced, sustained, and changed by the socio-economic context in which the subsidiary is located. Organisational practices designed to secure external legitimacy are not however always symbolic and decoupled from internal operations.