Title: Do Islamic banks react due to the impact of Charia Supervisory Board on their financial performance? A joint worldwide analysis

Authors: Achraf Haddad; Abdelfattah Bouri

Addresses: Faculty of Economic Sciences and Management of Sfax, Department of Finance and Accounting, University of Sfax-Tunisia, Airport Road Km 4-3018, Sfax, Tunisia ' Faculty of Economic Sciences and Management of Sfax, Department of Finance and Accounting, University of Sfax-Tunisia, Airport Road Km 4-3018, Sfax, Tunisia

Abstract: The real impacts generated by the Charia Supervisory Board (CSB) on the Islamic banks' financial performance (IBs' FP) have not yet been thoroughly investigated in detail. To explore the relationship between the CSB determinants through the application of the fixed and random effects methods, we used 180 IBs from 56 countries during the period (2010-2019). The empirical results revealed that the CSB size, the number of meetings, and the presence of Charia advisers improved the IBs' FP. However, the presence of financial experts in the CSB degraded their FP. The IBs' CSB size ensured the skills' diversification, since the number offers them the necessary time to discuss monetary exchanges, investment choices, and complaints from other committees, while the existence of specialist advisers has optimised the respect for Charia standards. Nevertheless, the experts' impact confirmed either their qualification insufficiency, or their training inadequacy in terms of Fikh Al-Muamalat.

Keywords: FP; financial performance; IBs; Islamic banks; CSB; Charia Supervisory Board; financial stability period.

DOI: 10.1504/IJAAPE.2023.133043

International Journal of Accounting, Auditing and Performance Evaluation, 2023 Vol.19 No.3, pp.384 - 415

Received: 19 Apr 2021
Accepted: 20 Oct 2021
Published online: 28 Aug 2023 *

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