The influence of board of directors’ characteristics on corporate social responsibility disclosures in Jordanian Islamic banks

Abstract

In an era where organizations are increasingly recognizing the paramount importance of addressing societal and environmental concerns, corporate social responsibility (CSR) has emerged as a pivotal facet of contemporary business practices. Within the banking sector, Islamic banks assume a significant role in advocating ethical and socially responsible conduct. This study delves into the impact of the board of directors' characteristics on corporate social responsibility disclosures (CSRD) within Jordanian Islamic banks. Data were meticulously gathered from three Jordanian Islamic banks, all of which are listed on the Amman Stock Exchange (ASE), over the span of the years 2010 to 2022. Our findings illuminate that Jordanian Islamic banks, on average, disclose 47 percent of their CSR endeavors, marking a commendable level of transparency, particularly when contrasted with less developed economies. Notably, independent directors comprise 42% of the board composition, with the average age of board members standing at 41 years. Moreover, 8.10% of board members hold degrees in finance and accounting, while 0.24% possess professional experience within the Big Four accounting firms. On average, Jordanian Islamic banks convene 10.27 board meetings annually, and 48% of directors maintain multiple directorships. Significantly, our analysis underscores that all examined characteristics of board members have a favorable influence on CSR disclosure within Jordanian Islamic banks. This paper constitutes a substantial contribution to the extant literature by providing empirical substantiation of the nexus between the board of directors' characteristics and CSRD in Jordanian Islamic banks, with a specific emphasis on the unique domain of Islamic banking, which has hitherto received limited scholarly attention. Further avenues of research are recommended to explore additional variables and delve deeper into the intricate interplay between board characteristics, external contextual factors, and the disclosure of CSR activities.

Exploring the impact of digital accounting and digital zakat on improving business sustainability in the Middle East and Malaysia

“…According to Al-Zaqeba et al (2023), digital accounting paired with zakat integration enables organizations to monitor how zakat donations affect sustainability parameters. Businesses may learn a lot about the success of their sustainability initiatives by using digital tools to track and evaluate the results of zakat-funded projects.…”

“…The corpus of literature highlights the significant benefits of digital accounting, demonstrating gains in financial efficiency, transparency, and accountability, all crucial components directly influencing an organization's sustainability goals. Additionally, the combination of digital accounting with zakat enhances these advantages by offering a methodical way to monitor and assess how zakat donations affect sustainability measures (Al-Zaqeba et al, 2023). This integration improves social responsibility and financial transparency while also allowing organizations to fine-tune their sustainability strategy and make sure that zakat monies are used to their fullest potential (Alam et al, 2023).…”