The Influence of Islamic Corporate Governance and Islamic Corporate Social Responsibility on Financial Performance of Islamic Commercial Banks in Indonesia
Journal Title: Oblik i finansi - Year 2023, Vol 1, Issue 1
Abstract
Islamic banks in Indonesia must implement good corporate governance and adhere to the principles of corporate social responsibility to have good financial performance and gain customers' trust. This study aims to determine the impact of Islamic Corporate Governance (ICG) and Islamic Corporate Social Responsibility (ICSR) on financial performance based on the Islamic Performance Index of Indonesian Islamic Banks from 2015-2019. The study population included Islamic commercial banks registered with the Financial Services Authority (OJK) from 2015-2019. The sample size was determined by targeted sampling to obtain 9 Islamic banks. This study used a descriptive quantitative approach. The descriptive analysis aims to demonstrate that the ICG, ICSR and financial performance data are relevant and valid concerning the development of the Islamic banking industry from 2015-2019. Quantitative analysis to justify the proposed hypothesis uses the multiple linear regression method. The results show that (1) Islamic corporate governance (ICG) has a positive and significant impact on the financial performance of Indonesian Islamic banks; (2) Islamic Corporate Social Responsibility (ICSR) has a positive and significant impact on the financial performance of Indonesian Islamic Banks. Implementing the principles of good corporate governance, including transparency and openness, following sharia principles helps to increase the financial performance of Islamic banks in Indonesia. Sharia theory of corporations suggests that social responsibility is a form of human accountability to God. The primary goal of disclosing information to corporate stakeholders can minimize information asymmetries about the extent to which an institution is fulfilling its obligations to all stakeholders.
Authors and Affiliations
Alfiah Permatasari & Ahmad Syathiri & Luk Luk Fuadah
Keywords
Related Articles
- EP ID EP715503
- DOI 10.33146/2307-9878-2023-1(99)-115-121
- Views 63
- Downloads 0
Integrated Process for Multiple Product Breakeven Analysis and Limiting Resource Allocation in Profit Planning
Breakeven analysis for multiple products can help managers understand how each product or service contributes to a company's overall profitability and performance. It can help identify the most and least profitable produ...
The Influence of Employee Responsibility and Knowledge on the Speed of Service and Employee Performance Moderated by the Hospital Management Information System: A Case Study of Type D Hospitals in the East Kalimantan Province
All medical system employees must work harmoniously and responsibly to provide quality medical services to the population. However, the effectiveness of their work can be influenced by various factors, the impact of whic...
Budget Absorption Phenomena: Evidence from Education Quality Assurance Institutions
From the perspective of public sector organizations, budget absorption is the disbursement or realization of the budget from listed programs and activities presented in the Budget Realization Report for a certain period....
Accounting and Legal Aspects of Military Fee Administration
The article studies the issue of legal coverage of charging and accounting the military fee and explains the ways of solving it. As based on the content analysis of the provisions of the Tax Code of Ukraine the issue of...
Banking Ecosystem: A New Conceptual Tool of Banking Science
The essence and structure of the banking system of Ukraine were largely regulated by law in the 1990s. Many changes have taken place since then. Today there are questions about changing the conceptual tools of banking sc...