Islamic corporate governance and performance based on maqasid sharia index– study in Indonesia

Abstract

Sharia banks and conventional banks have real differences in their objectives and operations. Therefore, performance measurements must differentiated between Sharia banks and conventional banks. One performance measure recommended by researchers is performance-based on the Maqasid sharia Index (MSI). This study is to prove the influence of the Sharia Supervisory Board attributes (number of meetings, level of education, cross-membership) and commissioners' attributes (ratio of independent commissioners, number of members, number of meetings) to performance based on MSI. The research sample is 12 Sharia banks in Indonesia during the 2014-2018 observation year. The data analysis method uses panel data analysis with a fixed effect model. We find that SSB education level and independent board ratio had a negative effect on performance based on MSI. Cross-membership; the number of SSB meetings, board size, number of board meetings, and total assets does not affect performance based on MSI. This finding indicates that MSI has not become one of the goals that must be achieved in the management of Sharia banks in Indonesia. This is because the MSI score is still low. In addition, the dominance of debt financing is a characteristic that banks prefer transactions that generate fixed income and avoid transactions that use a fairer system, i.e. the Profit and Loss Sharing system. We recommend for regulators to develop different measurement tools from conventional banks and in accordance with the objectives of sharia implementation as sharia bank business operations (maqasid sharia). Future researcher can study and develop other measurement tools in formulating maqasid sharia by involving regulators, business actors, and experts so that the produced maqasid sharia indicators can be applied by banks.

Islamic Banking Performance Measurement: A Conceptual Review of Two Decades

“…It seems that profit orientation is still the operational trend of IBs. Maqasid al-Shariah is not the primary goal that must be achieved by IBs" management, seen in several IBs choosing Murabaha financing transactions that generate fixed income other than adopting the profit-sharing system (Mukhibad et al, 2020). Besides, the existing maqasid al-Shariah-based performance measurement system is still inadequate as a tool in predicting future IBs activities because most of the financial and non-financial information needed to build a maqasid framework is not yet available in the IBs" annual reports.…”

“…A disclosure of GCG, SSB, temporary syirkah funds, and NPF affect the profitability of Islamic banks. Mukhibad et al (2020) found that maqasid al-sharia is not a goal that must be achieved by IBs" management because a large amount of financing indicates that IBs" prefer fixed income and avoids the profit-sharing system.…”

Uji Maqashid Syariah Perbankan Syariah Di Indonesia

“…Maka saran atas penelitian yang dilakukan oleh (Rao, 2018) adalah bank syariah harus mengedepankan peringkat "S" (Syariah): dalam CAMELS, dan saran dari (Hasan & Dewi, 2019), bahwa bank syariah harus memperhatikan kinerja berbasis maqashid syariah untuk meningkatkan bankability. Maka dari itu, indikator maqashid syariah perlu diterapkan di perbankan syariah, regulator dan otoritas perlu mengembangkan alat ukur berbasis syariah (Mukhibad et al, 2020), dan secara kolektif menghasilkan keputusan pengukuran kinerja berbasis maqashid syariah (Rashidah & Faisal, 2015). Sejalan dengan hasil penelitian (Nazreen Tabassum & Fahim, 2015), yang menyarankan otoritas perbankan dan keuangan Malaysia serta Peradilan mengupayakan penerapan hukum Syariah, untuk meyakinkan kepercayaan publik dan investor terhadap perbankan Islam di Malaysia.…”

Corporate Governance, Karakteristik Dewan Pengawas Syariah dan Maqoshid Sharia Index pada Perbankan Syariah di Indonesia

“…Berdasarkan temuan studi empiris sebelumnya tentang hubungan antara corporate governance dan kinerja perusahaan, dapat dikatakan bahwa studi empiris beserta teori tidak mendefinisikan secara pasti apa itu good corporate governance. Sebaliknya, penelitian sebelumnya telah mengeksplorasi beberapa karakteristik tata kelola perusahaan yang baik seperti ukuran dewan, independensi dewan, komnite audit dan kepamilikan institusional (Kusuma & Rosadi, 2019;Ghayad, 2008;Gupta et al, 2013;Kholid & Bachtiar, 2015;Mukhibad et al, 2020) Menurut de Andres & Vallelado (2008) jumlah dewan yang besar diharapkan menjadi solusi dalam kasus bank karena kompleksitas bisnis, informasi asimetris dan perubahan perilaku pasar karena melakukan pemantauan dan pemberian nasihat yang lebih baik. Quttainah & Almutairi (2017) dan Bukhari et al (2013) menemukan hubungan positif antara jumlah dewan dengan kinerja bank syariah.…”

“…Penelitian yang mengkaji faktor-faktor penyebab tinggi rendahnya skor maqashid syariah di suatu bank masih terbatas. Kami hanya menemukan Kholid & Bachtiar (2015) dan Mukhibad et al (2020) yang meneliti pengaruh mekanisme GCG terhadap kinerja maqashid syariah. Kholid & Bachtiar (2015) menemukan bahwa jumlah komisaris berpengaruh positif terhadap kinerja maqashid, jumlah komite audit berpengaruh negatif terhadap kinerja maqashid dan jumlah DPS yang tidak memiliki berpengaruh signifikan terhadap kinerja maqashid.…”