Corporate governance of Islamic banks: A comparative study between GCC and Southeast Asia countries
International Journal of Islamic and Middle Eastern Finance and Management
ISSN: 1753-8394
Article publication date: 12 August 2014
Abstract
Purpose
This paper aims to understand the current governance practices and governance structure of Islamic banks (IBs) in Gulf Cooperation Council (GCC) and Southeast Asia countries with the purpose of providing relevant information in guiding the future development of the governance system for IBs. As well, the paper discusses and compares the state of the governance system in GCC countries (Kuwait, Bahrain, United Arab Emirates, Qatar and Saudi Arabia) and Southeast Asia countries (Malaysia and Indonesia).
Design/methodology/approach
The study utilizes descriptive analysis approach in extracting and analyzing data collected for 83 IBs observed for the period 2002-2011. The authors test for differences in means and medians of corporate governance attributes between a sample of IBs in GCC countries and another one for Southeast Asia countries. They use selected variables of corporate governance of different governance structures, namely, the ownership structure, the board of directors, the Shariah board and the CEO attributes.
Findings
The paper findings argue that there are significant differences and divergence of corporate governance structure of IBs in GCC countries and those in Southeast Asia countries. This position acknowledges that there are shortcomings to the existing governance framework for IBs which needs further improvement and standardization.
Practical implications
The paper is a very useful source of information that may provide relevant guidelines in guiding the future development of corporate governance of IBs. As well, the paper provides relevant guidelines for improving regulations and laws covering the governance of IBs.
Originality/value
This paper provides fresh data and recent information on the actual corporate governance system in IBs in GCC and Southeast Asia countries. As well, the paper discusses a significant shortage in corporate governance literature of Islamic finance.
Keywords
Citation
Grassa, R. and Matoussi, H. (2014), "Corporate governance of Islamic banks: A comparative study between GCC and Southeast Asia countries", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 7 No. 3, pp. 346-362. https://doi.org/10.1108/IMEFM-01-2013-0001
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited