Title: Corporate governance: what about Islamic banks?

Authors: Saida Daly; Mohamed Frikha

Addresses: Department of Applied Economics, University of Sfax, Airport Road Km 4, 3018 Sfax, BP 1088, Tunisia ' Faculty of Economics and Management of Sfax, Airport Road Km 4, 3018 Sfax, BP 1088, Tunisia

Abstract: The purpose of this research is to analyse some key issues in corporate governance in Islamic banks. This governance has been analysed almost exclusively in the context of conventional banking markets. Islamic banking shows a fundamental departure from conventional banking. Our objective is also to compare corporate governance in Islamic banking firms in both the (GCC) countries and Southeast Asia countries (SAC). Moreover, this study investigates the effects of the relevant corporate governance variables of the financial performance of the Islamic banks. It focuses on a sample of 67 Islamic banks (42 Islamic banks in GCC countries and 25 Islamic banks in (SAC)) during the 2004-2012 period. Our investigation reveals that the board's fee, CEO duality and age positively and significantly affect the performance of Islamic banks. In contrast, the Shari'ah Supervisory Board characteristics do not have an impact on the financial performance of the Islamic banks.

Keywords: CEO age; CEO duality; conventional banking; corporate governance; financial performance; GCC countries; Islamic banks; Shari'ah Supervisory Board; southeast Asia countries; Islamic finance; banking industry; Gulf Cooperation Council; bank governance; board fees.

DOI: 10.1504/IJFSM.2015.066567

International Journal of Financial Services Management, 2015 Vol.8 No.1, pp.18 - 41

Received: 11 Dec 2013
Accepted: 20 Jun 2014
Published online: 24 Dec 2014 *

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