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Nexus between Sharia Governance and Financial Performance: Evidence from Indonesian Islamic Banking

Share: Jurnal Ekonomi dan Keuangan Islam · Vol. 13 No. 1 (2024) · pp. 184–209

DOI
10.22373/share.v13i1.20233
ISSN
2549-0648, 2089-6239
Published
2024-02-28
Publisher
Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-Raniry
Language
eng

Abstract

ABSTRACT – This study critically evaluates the effectiveness of Islamic governance on the financial performance of Islamic banks in Indonesia. Due to the absence of regulations defining optimal Sharia Supervisory Board (SSB) structure and qualifications, the research explores the empirical relationship between SSB characteristics and financial performance. Using a quantitative approach, the study analyzes data from 14 Islamic banks over a seven-year period (2014-2020). Multiple regression analysis reveals that SSB size, educational background, and financial/accounting expertise have minimal impact on financial performance. Interestingly, cross-membership on SSBs is found to have a negative effect. These findings, coupled with the observation of SSBs often lacking banking and finance backgrounds, suggest a potential disconnect between Sharia governance and managerial activities. The study advocates for clear and comprehensive regulations to strengthen SSB composition and competence, ultimately promoting the sustainable development of Islamic banking in Indonesia.========================================================================================================ABSTRAK – Hubungan Antara Tata Kelola Syariah dan Kinerja Keuangan: Bukti dari Perbankan Syariah Indonesia. Studi ini secara kritis mengevaluasi efektivitas tata kelola Syariah terhadap kinerja keuangan perbankan syariah di Indonesia. Mengingat belum adanya peraturan yang mengatur struktur minimum dan kualifikasi optimal Dewan Pengawas Syariah (DPS), penelitian ini bermaksud mengkaji secara empiris empiris hubungan antara karakteristik DPS dan kinerja keuangan. Dengan menggunakan pendekatan kuantitatif, penelitian ini menganalisis data dari 14 bank Islam selama tujuh tahun (2014-2020). Hasil analisis regresi berganda menunjukkan bahwa ukuran DPS, latar belakang pendidikan, dan keahlian keuangan dan akuntansi kurang memiliki dampak terhadap kinerja keuangan perbankan syariah. Menariknya, cross-membership pada DPS ditemukan memiliki efek negatif. Temuan ini, ditambah dengan pengamatan terhadap DPS yang seringkali tidak memiliki latar belakang perbankan dan keuangan, menunjukkan potensi keterputusan antara tata kelola Syariah dan aktivitas manajerial. Studi ini merekomendasikan adanya peraturan yang jelas dan komprehensif untuk memperkuat komposisi dan kompetensi DPS, yang pada akhirnya mendorong pengembangan bank syariah yang berkelanjutan di Indonesia.

Keywords

Collaboration network of the authors

39 authors · 106 co-authorship links · 11 across different organisations

Hover or tap a name to highlight its co-authors. Double-click to open the author's page.

  • Bandung Institute of Technology
  • Universitas Airlangga
  • Binus University
  • Affiliation unknown
  • Different organisations
  • Same organisation
  • Affiliation unknown
  • Thicker line = more joint articles · bigger circle = more articles
Show as table
Co-authorOrganisationJoint articles
Imron MawardiUniversitas Airlangga3
Raditya SukmanaUniversitas Airlangga2
Tika WidiastutiAffiliation unknown2
Satria Fadil PersadaBinus University1
Reza Ashari NasutionBandung Institute of Technology1
Michelle FericaBandung Institute of Technology1
Prawira Fajarindra BelgiawanBandung Institute of Technology1
Lidia MayangsariBandung Institute of Technology1
Nila Armelia WindasariBandung Institute of Technology1
Bayu Arie FiantoAffiliation unknown1
Muhammad MadyanAffiliation unknown1
KP PrabheeshAffiliation unknown1
Luluk AfiqohAffiliation unknown1
Dewie Saktia ArdiantonoAffiliation unknown1
Wahyu Wibisono WahidAffiliation unknown1
Mohammad Haidar RisyadAffiliation unknown1
Dzikri NurrohmanAffiliation unknown1
Nuria LatifahAffiliation unknown1
Dien MardhiyahUniversitas Airlangga1
Rizky Amalia SinulinggaAffiliation unknown1
Syahidah AbdullahAffiliation unknown1
Errin Dwi SaptowatiAffiliation unknown1
Faza Muhlizoh A. NoerAffiliation unknown1
Lissa Rosdiana NoerAffiliation unknown1
Nafla AqilahAffiliation unknown1
Lienggar RahadiantinoAffiliation unknown1
Zainul MuhibbinAffiliation unknown1
SoedarsoAffiliation unknown1
Anidah RobaniAffiliation unknown1
Puput Rosita FebriantiAffiliation unknown1
Sylva Alif RusmitaAffiliation unknown1
Eko Fajar CahyonoAffiliation unknown1
Afifatun Ni’mahAffiliation unknown1
Aam Slamet RusydianaAffiliation unknown1

Affiliations come from OpenAlex; journal OAI-PMH metadata carries none. Authors without an OpenAlex ID are matched by name, which can merge or split people.

Metadata source: OAI-PMH (metadata jurnal) https://jurnal.ar-raniry.ac.id/index.php/Share/oai, first harvested 6 Nov 2026, last seen 8 Nov 2026.
Original metadata (oai_dc) 
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	<dc:title xml:lang="en">Nexus between Sharia Governance and Financial Performance: Evidence from Indonesian Islamic Banking</dc:title>
	<dc:creator xml:lang="en">Hijriah, Hanifiyah Yuliatul</dc:creator>
	<dc:creator xml:lang="en">Kholidah, Himmatul</dc:creator>
	<dc:creator xml:lang="en">Alkausar, Bani</dc:creator>
	<dc:creator xml:lang="en">Laila, Nisful</dc:creator>
	<dc:creator xml:lang="en">Al Mustofa, Muhammad Ubaidillah</dc:creator>
	<dc:subject xml:lang="en">sharia governance</dc:subject>
	<dc:subject xml:lang="en">financial performance</dc:subject>
	<dc:subject xml:lang="en">Islamic banking</dc:subject>
	<dc:subject xml:lang="en">sharia supervisory board</dc:subject>
	<dc:subject xml:lang="en">financial sustainability</dc:subject>
	<dc:description xml:lang="en">ABSTRACT – This study critically evaluates the effectiveness of Islamic governance on the financial performance of Islamic banks in Indonesia. Due to the absence of regulations defining optimal Sharia Supervisory Board (SSB) structure and qualifications, the research explores the empirical relationship between SSB characteristics and financial performance. Using a quantitative approach, the study analyzes data from 14 Islamic banks over a seven-year period (2014-2020). Multiple regression analysis reveals that SSB size, educational background, and financial/accounting expertise have minimal impact on financial performance. Interestingly, cross-membership on SSBs is found to have a negative effect. These findings, coupled with the observation of SSBs often lacking banking and finance backgrounds, suggest a potential disconnect between Sharia governance and managerial activities. The study advocates for clear and comprehensive regulations to strengthen SSB composition and competence, ultimately promoting the sustainable development of Islamic banking in Indonesia.========================================================================================================ABSTRAK – Hubungan Antara Tata Kelola Syariah dan Kinerja Keuangan: Bukti dari Perbankan Syariah Indonesia. Studi ini secara kritis mengevaluasi efektivitas tata kelola Syariah terhadap kinerja keuangan perbankan syariah di Indonesia. Mengingat belum adanya peraturan yang mengatur struktur minimum dan kualifikasi optimal Dewan Pengawas Syariah (DPS), penelitian ini bermaksud mengkaji secara empiris empiris hubungan antara karakteristik DPS dan kinerja keuangan. Dengan menggunakan pendekatan kuantitatif, penelitian ini menganalisis data dari 14 bank Islam selama tujuh tahun (2014-2020). Hasil analisis regresi berganda menunjukkan bahwa ukuran DPS, latar belakang pendidikan, dan keahlian keuangan dan akuntansi kurang memiliki dampak terhadap kinerja keuangan perbankan syariah. Menariknya, cross-membership pada DPS ditemukan memiliki efek negatif. Temuan ini, ditambah dengan pengamatan terhadap DPS yang seringkali tidak memiliki latar belakang perbankan dan keuangan, menunjukkan potensi keterputusan antara tata kelola Syariah dan aktivitas manajerial. Studi ini merekomendasikan adanya peraturan yang jelas dan komprehensif untuk memperkuat komposisi dan kompetensi DPS, yang pada akhirnya mendorong pengembangan bank syariah yang berkelanjutan di Indonesia.</dc:description>
	<dc:publisher xml:lang="en">Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-Raniry</dc:publisher>
	<dc:date>2024-02-28</dc:date>
	<dc:type>info:eu-repo/semantics/article</dc:type>
	<dc:type>info:eu-repo/semantics/publishedVersion</dc:type>
	<dc:format>application/pdf</dc:format>
	<dc:identifier>https://jurnal.ar-raniry.ac.id/index.php/Share/article/view/20233</dc:identifier>
	<dc:identifier>10.22373/share.v13i1.20233</dc:identifier>
	<dc:source xml:lang="en">Share: Jurnal Ekonomi dan Keuangan Islam; Vol. 13 No. 1 (2024); 184-209</dc:source>
	<dc:source>2549-0648</dc:source>
	<dc:source>2089-6239</dc:source>
	<dc:language>eng</dc:language>
	<dc:relation>https://jurnal.ar-raniry.ac.id/index.php/Share/article/view/20233/pdf</dc:relation>
	<dc:rights xml:lang="en">Copyright (c) 2024 Hanifiyah Yuliatul Hijriah, Himmatul Kholidah, Bani Alkausar, Nisful Laila, Muhammad Ubaidillah Al Mustofa</dc:rights>
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