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This paper aims to examine the impacts of both Sharīʿah supervision and corporate social responsibility on banks’ risk-taking behavior and profitability. The analysis empirically uses dynamic and balanced panel data from 12 banks of Bangladesh for 2010–2019.

Dynamic panel generalized method of moments has been used primarily to examine the effects of Sharīʿah supervision and corporate social responsibility on risk-taking behavior and profitability. Later, the authors validate the core results using three-stage least squares and incorporates alternative risk and profitability measures in the baseline equation.

This study finds that Sharīʿah supervision heterogeneously derives benefits for Islamic banks and Islamic windows. Though there is no significant impact of female diversity on risk relying on board diversification, the bank can strengthen profitability. On the one hand, the annual changes in board composition reduce (increase) risk (financial and stability efficiency) but compromise profitability. Notably, socially responsible banks have been characterized as risk-averse and better stabilized (in terms of solvency and efficiency), more efficient and profitable.

Very few studies are available in the current literature which examine the impacts of Sharīʿah supervision and corporate social responsibility on either bank performance or risk-taking in the developing economy’s context.

The purpose of this paper is to find out the possible gaps in the Sharīʿah governance, and suggest how to fill the same, in line with the principles of Islamic finance and the global developments regarding social and value-based financial intermediation.

The paper uses secondary data gathered through analysis of documents and regulations to portray the current Sharīʿah governance framework and to suggest a unique paradigm to be adopted by the regulators of Islamic financial institutions.

The paradigm encompassing value-oriented financial ecosystem would need a comprehensive set of discipline, accountability and governance for making the pursuit of sustainable development goals and corporate social responsibilities effective in a well-defined schedule prepared and implemented by the regulators.

The scope of this research is limited to theory building in the light of emerging trends in responsible and social finance. It is not to empirically test the impact of the governance framework in terms of social justice, corporate responsibility and sustainability.

It would help the policy makers, regulators, researchers and the practitioners in finance to align banking and finance with social and environmental responsibility, and equity through governance and accountability for realizing the sustainable development goals.

It links the regulatory approaches to the emerging paradigm and ecosystem comprising sustainability and value-based governance, awareness and corporate social responsibility.

The paper adds value to the current regulatory frameworks enabling the Islamic financial institutions to realize the economic, social and sustainability objectives, in addition to Shariah legitimacy and enhanced credibility.

This paper aims to investigate the relationship between the composition of Sharīʿah supervisory boards (independence and frequency of meetings) and the performance of Islamic banks in the Gulf Cooperation Council (GCC) countries.

The study developed a multiple linear regression model, and data were collected from the annual reports of 48 standalone Islamic banks listed in the GCC countries covering the period between 2013 and 2017.

The results showed a statistically significant and negative relationship between the composition of the Sharīʿah supervisory boards and the performance of Islamic banks.

As the current study used only one indicator, that is Return on Assets to measure performance, it is recommended to expand the framework of this study, through the addition of market-based performance indicators such as Tobin’s Q.

This study recommends the GCC countries to follow a more proactive Sharīʿah governance model to strengthen their frameworks from both regulatory and non-regulatory aspects.

The study contributes to the Sharīʿah governance and Islamic banking literature relating to the GCC countries as previous studies gave no attention to the composition of Sharīʿah supervisory boards.

The purpose of this paper is threefold. First, it assesses communicated (information disclosed in annual reports and websites) ethical values of Islamic banks (IBs) by using an index based on Islamic precept. Second, this research paper analyzes the perception of employees working in IBs of Pakistan regarding previously mentioned dimensions constructed in the form of index. Third, it explores the difference (if any) between communicated and perceived ethical values of IBs in Pakistan.

This study incorporated two research methods, namely, content analysis (qualitative method) and descriptive analysis (quantitative method) to assess communicated and perceived ethical values. A checklist was designed that includes total six dimensions with 106 items or constructs. For perceived ethics, survey method is used to explore how far in practice IBs are operating in line with Islamic finance ethics in Pakistan by distributing questionnaires among employees.

This research study revealed overall satisfactory communicated and perceived ethical values in IBs of Pakistan. It is generally concluded that Meezan Bank is doing well in all dimensions as compare to other three banks in Pakistan. Some banks such as Dubai Islamic Bank and Albaraka Islamic bank lack proper format of annual reports. It recommended proper training and development of employees particularly about Islamic banking products and procedure. Moreover, it is recommended to take initiative of attracting female segment of the society and environment protection related campaigns.

Because of data and time constraints, an extended beneficiary analysis could not be materialized in this study. Therefore, for future research, it is recommended to expand the stakeholders’ analysis beyond employees of IBs.

This study may be helpful for policymakers and other stakeholders to improve the image and for further growth of IBs in Pakistan.

This study is the part of corporate social responsibility, so it will add value to social norms of banking sector and provide different dimensions and constructs based on Islamic ethical and moral system. It highlights banker’s responsibilities toward society.

This paper supports the phenomena of Islamic banking and finance in emerging markets and shows its potential growth for the economy.

The Maqāṣid (objective) hierarchy is a triple-tiered conceptualisation of individual and social needs that is grounded in the five objectives of Sharīʿah (Islamic Law). Managerialism is the ideological representation of human interaction based on managerial doctrines and practices. This paper aims to explore the tension between the Maqāṣid hierarchy and managerialism by evaluating the Sharīʿah requirements in the Islamic Financial Services Act (IFSA) 2013 of Malaysia from the Maqāṣid al-Sharīʿah perspective.

This qualitative study uses an inductive approach to review the sources of Sharīʿah and classical literature of Islamic jurists to present Sharīʿah rulings on managerialism and Maqāṣid al-Sharīʿah.

The Maqāṣid hierarchy promotes a vision of human life that is the opposite of managerialism. In the case of IFSA 2013, the Maqāṣid hierarchy, which is supposed to be the bedrock for Islamic finance, is replaced by a managerial hierarchy closer to Maslow’s hierarchy than it is to Imam Shatibi’s concept of human life. A process of fitting the Maqāṣid hierarchy into a narrow managerial mould occurs in IFSA 2013, meaning that many of the unique aspects of the Maqāṣid al-Sharīʿah are lost.

This study will assist Sharīʿah scholars, policymakers and Islamic financial institutions to develop the financial system and to implement the Maqāṣid al-Sharīʿah to improve macro policy and shaping Islamic institutions.

This is a pioneer study that develops a bridge between the Islamic Maqāṣid and conventional managerial hierarchies, which will encourage academics and practitioners to enrich the literature by conducting more in-depth studies on this topic.

This study aims to empirically investigate the impact of the Sharīʿah Governance Framework (SGF) on improving Sharīʿah governance practices in Islamic banks in Malaysia and in addressing its related issues.

Data collection was carried out using a comprehensive questionnaire survey, which was developed primarily based on SGF-2010 and arguments in the literature. The sample for this study includes key functionaries in Sharīʿah governance including senior managers, Sharīʿah committee (SC) and Sharīʿah team members of Islamic banks in Malaysia.

The analysis of scores obtained from the questionnaire survey–including 41 items representing current significant issues in Sharīʿah governance–indicates that SGF-2010 has been successful in achieving its objectives and in addressing related issues. The results of the paired sample t-test show significant improvements in Sharīʿah governance practices in Malaysian Islamic banks in light of the aforementioned guideline by Bank Negara Malaysia.

Findings of this research suggest that among the five essential pillars of Sharīʿah governance, namely, accountability and responsibility, independence, competence, confidentiality and transparency, most of the improvements and changes brought about by SGF-2010 are attributable to accountability and responsibility. However, there is still room for improvement in other components of the SGF, particularly with regard to transparency and the independence of the SC and Sharīʿah team.

Given the importance of Sharīʿah governance and considering recent endeavours to improve Sharīʿah-compliant culture among Islamic banks in Malaysia, this research is among the first attempts to empirically and comprehensively delve into this subject and evaluate its main issues by directly contacting key players in the Islamic banking industry and providing first-hand highlights. This research also compares the findings based on SGF-2010 with the requirements of SGF-2017 and Sharīʿah Governance Policy Document (SGPD-2019), which were released after this research was completed, where applicable.

The purpose of this study is to understand the reasons behind the different patterns of Sharīʿah non-compliant income (SNCI) disclosures amongst Islamic banks and, in particular, the extent to which Islamic banks make SNCI disclosures. The process involved in gaining and maintaining moral legitimacy forms the framework for this study.

Interviews were conducted with managers of Islamic banks involved in the reporting of SNCI in company annual reports.

The interview findings show that Islamic banks prefer to use procedures to gain and enhance moral legitimacy amongst their customers, business partners and staff. The constraints and challenges that Islamic banks face in SNCI reporting make this a popular means of securing moral legitimacy. However, these practices may not lead to enhanced and more communicative SNCI disclosures by Islamic banks.

To the best of the authors’ knowledge, this is the first study that explains the motivations behind SNCI reporting by Islamic banks and frames these motivations under the moral legitimacy framework.

This study aims to explore and assess the key Sharīʿah governance factors that may have an influence on the internal Sharīʿah audit structure and its practices in Islamic financial Institutions in Yemen, particularly in the Islamic banking sector.

To do so, the study adopts a qualitative approach employing case study analysis, and both primary and secondary data are used to formulate the appropriate interview questions and achieve the objectives of the study.

The authors observed that the key factors that help in assessing the internal Sharīʿah audit structure and its practices are Sharīʿah auditor charter, audit plan and audit manual. In addition, the authors observed that, in general, internal Sharīʿah audit tends to be subjective in Yemeni banks because they depend on the internal Sharīʿah auditor’s qualifications and experience more than formal guidelines and regulations. This is because there are no detailed internal Sharīʿah audit plans or detailed audit manual. Moreover, the internal Sharīʿah auditor charter is not comprehensive in explaining the duties required of the internal Sharīʿah auditor, and it is mixed with the Sharīʿah Supervisory Board (SSB) duties. This means the internal Sharīʿah auditor lacks the critical tools that enable him to achieve the desired audit manual objectives where the effectiveness of internal Sharīʿah audit can be measured.

One of the important implications of this study is providing very important guidance about enhancing the areas where shortfalls are found within the Sharīʿah governance process in the Yemeni banking system. This enhancement process of the internal factors of Sharīʿah governance can be achieved by increasing the awareness of the enhancing internal Sharīʿah audit structure as it reflects ultimately on the internal Sharīʿah auditor’s role and his practices.

Understanding the effectiveness of internal Sharīʿah audit structure among internal auditors will improve the Sharīʿah audit framework standards, enhance the Sharīʿah knowledge among internal auditors and provide general guidelines to design audit programmes for Sharīʿah governance auditing process.

This study aims to investigate and point out the variations of agency theory in the context of Sharīʿah governance in Islamic banking operations in the Kingdom of Saudi Arabia (KSA).

The study followed the approach of quantitative Corporate Governance Index (CGI) by computing the Gov-index (Gompers et al., 2003) and the Gov-score (Brown and Caylor, 2004; Saffieddine, 2009) to examine corporate governance (CG) issues using primary as well as secondary data. The primary data was generated from three full-fledged Islamic banks (IBs) and nine traditional banks with Islamic banking wings, all operating in the KSA. The approach was to provide an insight into the agency structure in the context of Islamic banking, which may lead to a trade-off between the conformity of Sharīʿah (Islamic law) rules and processes followed in safeguarding the rights of investors.

The majority of the Islamic banking services that are surveyed in this study acknowledge the significance of Sharīʿah governance and have implemented the fundamental methods, in conformity with this system. Certain flaws in Sharīʿah governance principles pertaining to audit, control and transparency are reported.

The research outcomes will be invaluable to IBs aiming to improve existing SG practices. It also has implications for IB managers to design strategies while complying with regulations and to protect the interests of all investors without breaching the ethics of Sharīʿah.

This paper adds original value to the body of knowledge on agency relationship by analysing the dynamics of agency theory in the unique and complex context of Sharīʿah governance of IBs or those offering Islamic products in the KSA. The results can be used as a valuable feedback for improvement of Sharīʿah governance in the banking system in the KSA and the Gulf region at large.

The purpose of this paper is to review the literature on Islamic finance vis-à-vis legal and Sharīʿah non-compliance risks in its transactions and judicial dispute resolution in Nigeria. This is with a view to putting forward direction for future studies on the duo of legal and Sharīʿah non-compliance risks and their impact in Islamic finance.

This review is designed as an exploratory study and qualitative methodology is used in examining relevant literature comprising of primary and secondary data while identifying legal risk and Sharīʿah non-compliance risks of Nigeria’s Islamic finance industry. Using the doctrinal approach together with content analysis, relevant Nigerian laws and judicial precedents applicable to Islamic finance practice and related publications were examined in determining the identified risks.

Undeveloped laws, the uncertainty of Sharīʿah governance and enforceability issues are identified as legal gaps for Islamic finance under the Nigerian legal system. The gaps are inimical to and undermine investor confidence in Nigeria’s Islamic finance industry. The review reveals the necessity of tailor-made Sharīʿah-based regulations in addition to corresponding governance and oversight for a legally safe and Sharīʿah-compliant Islamic finance practice. It brings to light the imperative for mitigating the legal and Sharīʿah non-compliance risks associated with Islamic finance operations as crucial for Islamic finance businesses, Islamic finance institutions and their sustainable development.

Based on content analysis, the review is wholly doctrinal and does not involve empirical data. Legal safety and Sharīʿah compliance are not to be compromised in Islamic finance operations. The review would assist relevant regulators and investors in Islamic financial enterprises to understand and determine the impact and potential ramifications of legal safety and Sharīʿah non-compliance on Islamic Finance Institutions.

This study provides an insight into the dimensions and ramifications of legal and Sharīʿah non-compliance risks of Nigeria’s Islamic finance industry. This study is premised on the imperative for research studies whose outcome would inform regulations that strike a balance between establishing Islamic financial institution/business and ensuring legal certainty and Sharīʿah compliance of their operations. This study paves way for this kind of research studies.

The findings and discussions provide a guide for regulators and researchers on the identification and mitigation of legal and Sharīʿah non-compliance risks in Islamic finance via a literature review. This study, the first of its kind in Nigeria, advances the idea that research into legal and Sharīʿah non-compliance risks of Islamic financial entities is key to mitigating the risks and fostering the entities and their businesses.