Effect of board quality on the financial performance of conventional and Islamic banks: international comparative study after the Subprime crisis

Haddad, Achraf

doi:10.1108/jaee-01-2021-0004

Cited by 4 publications

(4 citation statements)

References 190 publications

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“…The separation of the CEO and the chairman of the board, as well as a high degree of BIND, are the central tenets of agency theory (Jensen and Meckling, 1976), which leads to safeguarding the interest of shareholders, enhances the trust and confidence level of the investor and restricts the opportunist behaviour of managers (Al-Gamrh et al, 2020;Carty and Weiss, 2012;Fakhfakh and Jarboui, 2022;Haddad, 2022;Wijethilake and Ekanayake, 2020). The presence of outside directors also bridges the information asymmetry gap between both parties by asking the "right questions" from the internal directors (Hamrouni et al, 2021;Monks and Minow, 2008).…”

Section: Ceo Duality and Board Independencementioning

confidence: 99%

Performance and CEO duality in Indian public banks: a moderating role of board independence

Singh

Sharma

2023

JAEE

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PurposeThe study aims to estimate the impact of the vigilant board independence (BIND) dimension that potentially neutralises the unfair influence of chief executive officer duality (CEODU) on Indian public banks' performance.Design/methodology/approachThe study takes into account the fixed-effects model to investigate the potential moderating effect of BIND in the relationship between CEODU and Indian bank performance. The econometric model is also robust against heteroscedasticity, serial correlation and cross-section dependence issues to ensure that the model is free from such biases. The study also addresses the major issue of endogeneity via vector autoregression and performs the analysis by considering one period lag of the explanatory variables.FindingsThe findings demonstrate that CEODU does not always lead to a negative outcome on the performance until or unless the board is monitored by the effective presence of outside directors.Research limitations/implicationsThe regulatory bodies consider the results to strengthen board capital where CEODU can benefit a business entity if vigilance BIND is present at or above a threshold point.Originality/valueThe study evaluated an under-researched role of BIND as a moderator that undermines the negative influence of CEODU on the performance of Indian banks. The study also establishes that the CEO's contribution to performance increases when the number of outside directors is at or above a certain threshold.

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Section: Ceo Duality and Board Independencementioning

confidence: 99%

Performance and CEO duality in Indian public banks: a moderating role of board independence

Singh

Sharma

2023

JAEE

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“…Other findings indicate that corporate governance has a significant impact on ROA and ROE (Manu et al, 2019). Board quality as a GCG proxy is found to positively affect the financial performance of an Islamic bank (Haddad, 2022) Third-party funds (TPF) are bank funds sourced from the public. TPF can be used by banks to increase business activities by channeling it to debtors.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Do corporate governance implementation and bank characteristics improve the performance of Indonesian Islamic banking? Before-COVID-19 pandemic analysis

Nurkhin

Kusmuriyanto

Widiyanto

et al. 2023

Banks and Bank Systems

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Islamic banking has existed in Indonesia since 1992. The performance of Islamic banking is interesting for further analysis. This study aims to analyze the impact of good corporate governance (GCG) implementation and bank characteristics on the performance of Islamic banking in Indonesia before the COVID-19 pandemic. Profitability is a measure of banking performance and is proxied by return on assets (ROA) and return on equity (ROE). The research sample consists of Islamic commercial banks that published financial and annual reports between 2011 and 2019. The data collection method used is documentation. Multiple regression analysis was used for data analysis. The results indicate that the implementation of GCG has no significant impact on performance (probability values of 0.425 and 0.420 on ROA and ROE with coefficients of 0.016 and 0.019). The P-value of the non-performing loans (NPF) variable is &lt; 0.001 on ROA and ROE, which means that NPF has a significant negative impact on ROA and ROE. Third-party funds only have a significant impact on ROE with a p-value of 0.046. Meanwhile, the size of a bank has not been shown to have a significant impact on the performance of Islamic banking in Indonesia. Efforts to maintain NPF are critical for banks to achieve good performance (profitability). NPF demonstrates the risk of nonpayment of Islamic bank financing. AcknowledgmentWe gratefully acknowledge the research funding provided by LPPM Universitas Negeri Semarang (contract number: 19.8.3/UN37/PPK.3.1/2022).

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“…According to Haddad (2023) the global financial crisis of 2008 served as the main impetus for the development of financial technology. With the onset of the global financial crisis, people started to lose faith in the banking system and started searching for other options that would provide them greater security while investing.…”

Section: Figurementioning

confidence: 99%

Exploring the Nexus of Financial Technologies, Financial Inclusion, and Blockchain in Islamic Finance within Digital Transformation

Kanwal,

Tayyab,

Idrees

2023

Pak. J. Humanit. Soc. Sci

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Financial technology and continuous digital growth are having an influence on financial inclusion which has significant ramifications for the faith-based financial paradigm. The objective of this research is to investigate the relationships and effects of financial technologies in Islamic financing inside financial institutions within the framework of digital transformation and blockchain technology. The use of these advancements will significantly affect Sharia-compliant Islamic finance. This paper critically investigates the historical and current implications of Financial Technologies, financial inclusion, and Blockchain in Islamic Finance worldwide with a focus on banking, investing, and compliance with regulations. Using a comprehensive review of the literature, indexing journals, and empirical case studies, this research seeks to provide significant new insights on the development and status of several areas within the Islamic financial industry. In order to make Sharia compatible, it also examines how digitalization has altered the landscape. Furthermore, before they can considerably promote financial inclusion in many countries, the Islamic financial services industry and the junction of technology and Islamic finance still have a ways to go due to the scale necessary. The study's findings may serve as a guide for financial institutions, decision-makers, and other interested parties in order to maximise the potential of blockchain technology and other financial innovations in Islamic finance across a range of Islamic nations. Long-term, equitable economic growth will result from this.

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Effect of board quality on the financial performance of conventional and Islamic banks: international comparative study after the Subprime crisis

Cited by 4 publications

References 190 publications

Performance and CEO duality in Indian public banks: a moderating role of board independence

Performance and CEO duality in Indian public banks: a moderating role of board independence

Do corporate governance implementation and bank characteristics improve the performance of Indonesian Islamic banking? Before-COVID-19 pandemic analysis

Exploring the Nexus of Financial Technologies, Financial Inclusion, and Blockchain in Islamic Finance within Digital Transformation

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