What the study found
The study found that Shariah governance functions in Malaysian Islamic banks are affected by financial performance, especially profitability. In particular, Shariah committee attributes and disclosure and transparency were linked to profitability.
Why the authors say this matters
The authors suggest that higher trust in Shariah committee members may encourage Islamic banks to be more transparent. They also conclude that control functions under Shariah governance need to be strengthened and that awareness of Shariah review, Shariah audit, and Shariah risk should be reinforced.
What the researchers tested
The researchers examined how Shariah governance through Shariah Supervisory Board (SSB) functions in Malaysian Islamic banks is affected by financial performance. They used content analysis of annual reports and a checklist to code five governance measures: Shariah committee attributes, Shariah risk, Shariah audit, Shariah review, and disclosure and transparency.
What worked and what didn't
The findings suggested that Shariah committee attributes and disclosure and transparency were affected by bank profitability, measured using return on assets (ROA). Financial performance was also measured with the debt-equity ratio, but the abstract does not report specific results for that measure. The abstract says control function systems need to be enhanced and that attention to Shariah review, Shariah audit, and Shariah risk should be reinforced.
What to keep in mind
The abstract does not provide detailed statistical results or effect sizes. It also does not specify the outcome of every governance measure for every performance indicator, so the available summary is limited to the relationships explicitly stated.
Key points
- Shariah governance in Malaysian Islamic banks was examined in relation to financial performance.
- Shariah committee attributes and disclosure and transparency were associated with bank profitability.
- The study used content analysis of annual reports and a checklist to code five Shariah governance measures.
- Financial performance was measured with return on assets (ROA) and the debt-equity ratio.
- The authors say control functions should be strengthened and attention to Shariah review, audit, and risk should be reinforced.
Disclosure
- Research title:
- Bank profitability is linked to some Shariah governance functions
- Authors:
- Rosnia Masruki, Mustafa Mohd Hanefah, Norailis Ab. Wahab
- Publication date:
- 2026-04-25
- OpenAlex record:
- View
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