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Corporate governance and Islamic banks’ products and services disclosure

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Corporate governance and Islamic banks’ products and services disclosure. / Grassa, Rehab; Chakroun, Raida; Hussainey, Khaled.

In: Accounting Research Journal, Vol. 31, No. 1, 06.2018, p. 75-89.

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Grassa, R, Chakroun, R & Hussainey, K 2018, 'Corporate governance and Islamic banks’ products and services disclosure', Accounting Research Journal, vol. 31, no. 1, pp. 75-89. https://doi.org/10.1108/ARJ-09-2016-0109

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Grassa, Rehab ; Chakroun, Raida ; Hussainey, Khaled. / Corporate governance and Islamic banks’ products and services disclosure. In: Accounting Research Journal. 2018 ; Vol. 31, No. 1. pp. 75-89.

Bibtex

@article{a0192abeb2a042008a0857bb12003b13,
title = "Corporate governance and Islamic banks’ products and services disclosure",
abstract = "The main objective of this paper is to examine the effect of corporate governance on Islamic banks (IBs) products and services (P&S) disclosure. We run a computer based content-analysis upon the annual reports for a sample of 78 IBs operating in 11 countries over the period from 2004 to 2012 to find the number of P&S statements. We identify the levels and trends of P&S disclosure. We, also, use regression analysis to identify the factors affecting P&S disclosure in IBs. Our paper’s findings suggest that there has been a significant improvement of P&S disclosure over time. Our study’s results show a positive association between P&S disclosure and Shariah board size; board size; CEO tenure, duality in position, blockholders and investment account holders. However, they show a negative association between P&S disclosure and institutional ownership. In addition, it appears that board independence does not affect significantly banks’ P&S disclosure. We find, also, that bank performance, the bank age, the leverage, the listing and country transparency index have a positive effect on the P&S disclosure. While the adoption of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards and the Islamic finance share have a negative effect on the P&S disclosure. This study offers an original contribution to corporate disclosure literature by being the first to develop and investigate P&S disclosure for a large sample of IBs during a long period of time. It links P&S disclosure with bank corporate governance characteristics. The findings have many important policy implications. More specifically, this paper encourages regulators in the studied countries to improve corporate governance mechanisms in their Islamic banking systems through the optimization of ownership structure, CEO’s characteristics and the board’s characteristics, in order to promote P&S disclosure. Moreover, our findings support the theoretical predictions of the stakeholder-agency theory. This study’s empirical evidence enhances the understanding of the corporate social responsibility (CSR) disclosure environment in general and the P&S disclosure environment in particular for IBs. This study is the first one that tends to measure P&S disclosure in the annual reports for a large cross-countries sample of IBs during a long period of time. It is also the first one that links P&S disclosure with IBs corporate governance characteristics",
keywords = "IBs, computer based content analysis, P&S disclosure, annual reports, corporate governance, CSR",
author = "Rehab Grassa and Raida Chakroun and Khaled Hussainey",
year = "2018",
month = "6",
doi = "10.1108/ARJ-09-2016-0109",
language = "English",
volume = "31",
pages = "75--89",
journal = "Accounting Research Journal",
issn = "1030-9616",
publisher = "Emerald Group Publishing Limited",
number = "1",

}

RIS

TY - JOUR

T1 - Corporate governance and Islamic banks’ products and services disclosure

AU - Grassa, Rehab

AU - Chakroun, Raida

AU - Hussainey, Khaled

PY - 2018/6

Y1 - 2018/6

N2 - The main objective of this paper is to examine the effect of corporate governance on Islamic banks (IBs) products and services (P&S) disclosure. We run a computer based content-analysis upon the annual reports for a sample of 78 IBs operating in 11 countries over the period from 2004 to 2012 to find the number of P&S statements. We identify the levels and trends of P&S disclosure. We, also, use regression analysis to identify the factors affecting P&S disclosure in IBs. Our paper’s findings suggest that there has been a significant improvement of P&S disclosure over time. Our study’s results show a positive association between P&S disclosure and Shariah board size; board size; CEO tenure, duality in position, blockholders and investment account holders. However, they show a negative association between P&S disclosure and institutional ownership. In addition, it appears that board independence does not affect significantly banks’ P&S disclosure. We find, also, that bank performance, the bank age, the leverage, the listing and country transparency index have a positive effect on the P&S disclosure. While the adoption of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards and the Islamic finance share have a negative effect on the P&S disclosure. This study offers an original contribution to corporate disclosure literature by being the first to develop and investigate P&S disclosure for a large sample of IBs during a long period of time. It links P&S disclosure with bank corporate governance characteristics. The findings have many important policy implications. More specifically, this paper encourages regulators in the studied countries to improve corporate governance mechanisms in their Islamic banking systems through the optimization of ownership structure, CEO’s characteristics and the board’s characteristics, in order to promote P&S disclosure. Moreover, our findings support the theoretical predictions of the stakeholder-agency theory. This study’s empirical evidence enhances the understanding of the corporate social responsibility (CSR) disclosure environment in general and the P&S disclosure environment in particular for IBs. This study is the first one that tends to measure P&S disclosure in the annual reports for a large cross-countries sample of IBs during a long period of time. It is also the first one that links P&S disclosure with IBs corporate governance characteristics

AB - The main objective of this paper is to examine the effect of corporate governance on Islamic banks (IBs) products and services (P&S) disclosure. We run a computer based content-analysis upon the annual reports for a sample of 78 IBs operating in 11 countries over the period from 2004 to 2012 to find the number of P&S statements. We identify the levels and trends of P&S disclosure. We, also, use regression analysis to identify the factors affecting P&S disclosure in IBs. Our paper’s findings suggest that there has been a significant improvement of P&S disclosure over time. Our study’s results show a positive association between P&S disclosure and Shariah board size; board size; CEO tenure, duality in position, blockholders and investment account holders. However, they show a negative association between P&S disclosure and institutional ownership. In addition, it appears that board independence does not affect significantly banks’ P&S disclosure. We find, also, that bank performance, the bank age, the leverage, the listing and country transparency index have a positive effect on the P&S disclosure. While the adoption of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards and the Islamic finance share have a negative effect on the P&S disclosure. This study offers an original contribution to corporate disclosure literature by being the first to develop and investigate P&S disclosure for a large sample of IBs during a long period of time. It links P&S disclosure with bank corporate governance characteristics. The findings have many important policy implications. More specifically, this paper encourages regulators in the studied countries to improve corporate governance mechanisms in their Islamic banking systems through the optimization of ownership structure, CEO’s characteristics and the board’s characteristics, in order to promote P&S disclosure. Moreover, our findings support the theoretical predictions of the stakeholder-agency theory. This study’s empirical evidence enhances the understanding of the corporate social responsibility (CSR) disclosure environment in general and the P&S disclosure environment in particular for IBs. This study is the first one that tends to measure P&S disclosure in the annual reports for a large cross-countries sample of IBs during a long period of time. It is also the first one that links P&S disclosure with IBs corporate governance characteristics

KW - IBs

KW - computer based content analysis

KW - P&S disclosure

KW - annual reports

KW - corporate governance

KW - CSR

UR - https://www.emeraldinsight.com/doi/full/10.1108/ARJ-09-2016-0109

U2 - 10.1108/ARJ-09-2016-0109

DO - 10.1108/ARJ-09-2016-0109

M3 - Article

VL - 31

SP - 75

EP - 89

JO - Accounting Research Journal

JF - Accounting Research Journal

SN - 1030-9616

IS - 1

ER -

ID: 7704042