Authors retain the copyright without restrictions for their published content in this journal. HSSR is a SHERPA ROMEO Green Journal.
Publishing License
This is an open-access article distributed under the terms of
THE SHARIA SUPERVISORY BOARD AND CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE: A SHARIA PERSPECTIVE IN INDONESIA
Corresponding Author(s) : Winarsih Winarsih
Humanities & Social Sciences Reviews,
Vol. 8 No. 1 (2020): January
Abstract
Purpose of the study: This research aims to examine the relationship between the Sharia Supervisory Board (SSB) and the Corporate Social Responsibility (CSR) disclosure with financial performance as a mediating variable in Indonesia. By understanding the importance of the SSB responsibilities in the continuity of Sharia Banks, therefore, it is necessary to re-examine them.
Methodology: This research was conducted on sharia banks registered in Sharia Banking Statistics of the Financial Services Authority (Otoritas Jasa Keuangan (OJK) in Bahasa) during the period of 2010-2016. There were 6 Sharia Banks involved as the sample of this study selected through a purposive sampling technique.
Main Findings: The results showed that the Sharia Supervisory Board had a positive relationship with the CSR disclosure. But, this study implies that the CSR disclosure is not able to mediate the relationship between the SSB with the CSR disclosure of sharia banks in Indonesia.
Applications of this study: In Indonesia, the purpose of existence of the SSB in Sharia Banks is to tend to comply with regulation, and this condition may affect the results. So, some measurement about the SSB in Indonesia is needed in future studies. Also, for future studies, it is suggested that they may add quality assets as a proxy for financial performance and other variables in order to obtain better results.
Novelty/Originality of this study: This study tries to prove empirically the relationship between the SSB on the CSR disclosure of Sharia Banks in Indonesia with financial performance as its mediating variable. This study is indispensable to do in Indonesia, as the country with the biggest Muslim population in the world.
Keywords
Download Citation
Endnote/Zotero/Mendeley (RIS)BibTeX
- Act of the Republic of Indonesia Number 21 of 2008 Concerning Sharia (Islamic) Banking, (2008).
- Adefemi, F., Hassan, A., & Fletcher, M. (2018). Corporate governance disclosure in Nigerian listed companies. International Research Journal of Business Studies, 11(2), 67-80. https://doi.org/10.21632/irjbs.11.2.67-80 DOI: https://doi.org/10.21632/irjbs.11.2.67-80
- Basri, H., Siti-Nabiha, A. K., & Majid, M. S. A. (2016). Accounting and Accountability in Religious Organizations: An Islamic Contemporary Scholars’ Perspective. Gadjah Mada International Journal of Business, 18(2), 207-230. https://doi.org/10.22146/gamaijb.12574 DOI: https://doi.org/10.22146/gamaijb.12574
- Brahmana, R. K., Brahmana, R. K., & Ho, T. C. F. (2018). Training and Development Policy, Corporate Governance, and Firm Performance. Gadjah Mada International Journal of Business, 20(1), 59-87. https://doi.org/10.22146/gamaijb.12995 DOI: https://doi.org/10.22146/gamaijb.12995
- Bukair, A. A., & Rahma, A. A. (2013). The Influence of the Shariah Supervision Board on Corporate Social Responsibility Disclosure by Islamic Banks of Gulf Co-operation Council Countries. Asian Journal of Business and Accounting, 6(2), 65-104.
- Bukair, A. A., & Rahma, A. A. (2015). The Effect of the Board of Directors’ Characteristics on Corporate Social Responsibility Disclosure by Islamic Banks. Journal of Management Research, 7(2), 506-519. https://doi.org/10.5296/jmr.v7i2.6989 DOI: https://doi.org/10.5296/jmr.v7i2.6989
- Chariri, A. (2008). Organizational Culture and Financial Reporting Practice in an Indonesian Insurance Company. Paper presented at The 3th International Conference on Business and Management Research (ICBMR), Denpasar, Bali, Indonesia.
- Dawkins, J., & Lewis, S. (2003). CSR in Stakeholder Expectations: And Their Implication for Company Strategy. Journal of Business Ethics, 44(2), 185-193. https://doi.org/10.1023/A:1023399732720 DOI: https://doi.org/10.1023/A:1023399732720
- Freeman, R. E. (2010). Strategic Management: A Stakeholder Approach. Cambridge: Cambridge University Press. DOI: https://doi.org/10.1017/CBO9781139192675
- Handriani, E., & Robiyanto, R. (2018). Investment opportunity and industrial growth in Indonesia. International Journal of Business and Society, 19(2), 295-312. http://www.ijbs.unimas.my/images/repository/pdf/Vol19-no2-paper3.pdf
- Handriani, E., & Robiyanto, R. (2019). Institutional ownership, independent board, board size, and firm performance: evidence from Indonesia. ContadurÃa y Administración, 64(3), 1-16. http://doi.org/10.22201/fca.24488410e.2018.1849 DOI: https://doi.org/10.22201/fca.24488410e.2018.1849
- Haniffa, R. M., & Cooke, T. E. (2005). The impact of culture and governance on corporate social reporting. Journal of Accounting and Public Policy, 24(5), 391-430. https://doi.org/10.1016/j.jaccpubpol.2005.06.001 DOI: https://doi.org/10.1016/j.jaccpubpol.2005.06.001
- Ibrahim, Z., Marshall, A., & Rahman, R. A. (2013). Islamic Social Disclosure (ISCR) of Malaysian Public Listed Companies: Empirical Findings. British Journal of Economics, Finance and Management Sciences, 7(1), 26-46.
- Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X DOI: https://doi.org/10.1016/0304-405X(76)90026-X
- Khediri, K. B., Charfeddine, L., & Youssef, S. B. (2015). Islamic versus conventional banks in the GCC countries: A comparative study using classification techniques. Research in International Business and Finance, 33, 75-98. https://doi.org/10.1016/j.ribaf.2014.07.002 DOI: https://doi.org/10.1016/j.ribaf.2014.07.002
- Khoirudin, A. (2013). Corporate Governance dan Pengungkapan Islamic Social Reporting pada Perbankan Syariah di Indonesia. Accounting Analysis Journal, 2(2), 227-232. https://doi.org/10.15294/aaj.v2i2.2919
- Lestari, P. (2013). Determinants Of Islamic Social Reporting In Syariah Banks: Case Of Indonesia. International Journal of Business and Management Invention, 2(10), 28-34.
- Mai, M. U. (2017). Mediation of CSR and Profitability on the Influences of GCG Mechanism to the Firm Value. Jurnal Keuangan dan Perbankan, 21(2), 253-264. http://jurnal.unmer.ac.id/index.php/jkdp/article/view/393 DOI: https://doi.org/10.26905/jkdp.v21i2.393
- Manaf, N. B. A., Saad, N. B. M., Mohamad, N. E. A. B., Ali, I. B. M., & Rahim, N. B. (2018). Determinants of Sustainable Growth Rate (SGR) By Using Zakon ’ S Model To Encounter With Shariah Compliance Requirements for Shariah Securities Compliance Firms in Malaysia. International Journal of Industrial Management, 4(4), 61-71.
- Muharam, H., Anwar, R. J., & Robiyanto, R. (2019). Islamic stock market and Sukuk market development, economic growth, and trade openness (the case of Indonesia and Malaysia). Business: Theory and Practice, 20, 196-207. https://doi.org/10.3846/btp.2019.19 DOI: https://doi.org/10.3846/btp.2019.19
- Musibah, A., & Alfattani, W. (2014). The Mediating Effect of Financial Performance on the Relationship between Shariah Supervisory Board Effectiveness, Intellectual Capital and Corporate Social Responsibility, of Islamic Banks in Gulf Cooperation Council Countries. Asian Social Science, 10(17), 139-164. https://doi.org/10.5539/ass.v10n17p139 DOI: https://doi.org/10.5539/ass.v10n17p139
- Nurhikmah, F., &Winarsih, W., & Kusumaningtyas, M. (2018). The Influence of Sharia Supervisory Board and Intellectual Capital Towards Corporate Social Responsibility Disclosure with Financial Performance as The Mediation Variable (Empirical Study of Shariah Banking in Indonesia). Journal of Islamic Banking and Finance, 2(2), 174-188. DOI: https://doi.org/10.21043/malia.v2i2.4785
- Othman, R., & Thani, A. M. (2010). Islamic Social Reporting Of Listed Companies In Malaysia. International Business & Economics Research Journal, 9(4). doi:https://doi.org/10.19030/iber.v9i4.561 DOI: https://doi.org/10.19030/iber.v9i4.561
- Othman, R., Thani, A. M., & Ghani, E. K. (2009). Determinants of Islamic Social Reporting Among Top Shariah-Approved Companies in Bursa Malaysia Research Journal of Internatıonal Studıes(12), 4-20.
- Ousama, A. A., & Fatima, A. H. (2010). Voluntary disclosure by Shariah approved companies: an exploratory study. Journal of Financial Reporting and Accounting, 8(1), 35-49. https://doi.org/10.1108/19852511011055943 DOI: https://doi.org/10.1108/19852511011055943
- Purnamawati, I. G. A., Yuniarta, G. A., & Astria, P. R. (2017). Good Corporate Governance dan Pengaruhnya Terhadap Nilai Perusahaan Melalui Corporate Social Responsibility Disclosure. Jurnal Keuangan dan Perbankan, 21(2), 276-286. DOI: https://doi.org/10.26905/jkdp.v21i2.505
- Renneboog, L., ter Horst, J., & Zhang, C. (2008). The price of ethics and stakeholder governance: The performance of socially responsible mutual funds. Journal of Corporate Finance, 14(3), 302–322. https://doi.org/10.1016/j.jcorpfin.2008.03.009 DOI: https://doi.org/10.1016/j.jcorpfin.2008.03.009
- Riahiâ€Belkaoui, A. (2003). Intellectual capital and firm performance of US multinational firms: A study of the resourceâ€based and stakeholder views. Journal of Intellectual Capital, 4(2), 215-226. https://doi.org/10.1108/14691930310472839 DOI: https://doi.org/10.1108/14691930310472839
- Robiyanto, R., Anggraeni, A. D., Nugraha, A. K. N. A., & Lako, A. (2019). The Effect of Good Corporate Governance Mechanism on Firm Value of Indonesian Socially Responsible Firms. Quality: Access to Success, 20(173), 59-63.
- Robiyanto, R., Putra, A. R., & Lako, A. (2019). The effect of corporate governance and intellectual capital toward financial performance and firm value of socially responsible firms. ContadurÃa y Administración, 66(1), 1-29. http://dx.doi.org/10.22201/fca.24488410e.2021.2489 DOI: https://doi.org/10.22201/fca.24488410e.2021.2489
- Robiyanto, R., Santoso, M. A., & Ernayani, R. (2019). Sharia Mutual Funds Performance in Indonesia. Business: Theory and Practice, 20, 11-18. https://doi.org/10.3846/btp.2019.02 DOI: https://doi.org/10.3846/btp.2019.02
- Santoso, N. T., Ningsih, R. M., & Paramitha, R. P. (2017). Determinants of Islamic Social Reporting Disclosure: The Case of Jakarta Islamic Index. In R. Said, N. Z. M. Sidek, Z. Azhar, & K. A. Kamarudin (Eds.), State-of-the-Art Theories and Empirical Evidence (pp. 27-39). Singapore: Springer. http://doi-org-443.webvpn.fjmu.edu.cn/10.1007/978-981-10-6926-0_2 DOI: https://doi.org/10.1007/978-981-10-6926-0_2
- Smith, R. E. (2011). Defining Corporate Social Responsibility: A Systems Approach For Socially Responsible Capitalism. (Master of Philosophy Thesis), University of Pennsylvania, Philadelphia. Retrieved from http://repository.upenn.edu/cgi/viewcontent.cgi?article=1009&context=od_theses_mp
- Sunarsih, U., & Ferdiansyah, F. (2017). Determinants of the Islamic Social Reporting Disclosure. Journal of Islamic Economics, 9(1), 69-80. http://dx.doi.org/10.15408/aiq.v9i1.3771 DOI: https://doi.org/10.15408/aiq.v9i1.3771
- Wahyudi, S., Nofendi, D., Robiyanto, R., & Hersugondo, H. (2018). Factors affecting return on deposit (ROD) of sharia banks in Indonesia Business: Theory and Practice, 19, 166-176. https://doi.org/10.3846/btp.2018.17 DOI: https://doi.org/10.3846/btp.2018.17
References
Act of the Republic of Indonesia Number 21 of 2008 Concerning Sharia (Islamic) Banking, (2008).
Adefemi, F., Hassan, A., & Fletcher, M. (2018). Corporate governance disclosure in Nigerian listed companies. International Research Journal of Business Studies, 11(2), 67-80. https://doi.org/10.21632/irjbs.11.2.67-80 DOI: https://doi.org/10.21632/irjbs.11.2.67-80
Basri, H., Siti-Nabiha, A. K., & Majid, M. S. A. (2016). Accounting and Accountability in Religious Organizations: An Islamic Contemporary Scholars’ Perspective. Gadjah Mada International Journal of Business, 18(2), 207-230. https://doi.org/10.22146/gamaijb.12574 DOI: https://doi.org/10.22146/gamaijb.12574
Brahmana, R. K., Brahmana, R. K., & Ho, T. C. F. (2018). Training and Development Policy, Corporate Governance, and Firm Performance. Gadjah Mada International Journal of Business, 20(1), 59-87. https://doi.org/10.22146/gamaijb.12995 DOI: https://doi.org/10.22146/gamaijb.12995
Bukair, A. A., & Rahma, A. A. (2013). The Influence of the Shariah Supervision Board on Corporate Social Responsibility Disclosure by Islamic Banks of Gulf Co-operation Council Countries. Asian Journal of Business and Accounting, 6(2), 65-104.
Bukair, A. A., & Rahma, A. A. (2015). The Effect of the Board of Directors’ Characteristics on Corporate Social Responsibility Disclosure by Islamic Banks. Journal of Management Research, 7(2), 506-519. https://doi.org/10.5296/jmr.v7i2.6989 DOI: https://doi.org/10.5296/jmr.v7i2.6989
Chariri, A. (2008). Organizational Culture and Financial Reporting Practice in an Indonesian Insurance Company. Paper presented at The 3th International Conference on Business and Management Research (ICBMR), Denpasar, Bali, Indonesia.
Dawkins, J., & Lewis, S. (2003). CSR in Stakeholder Expectations: And Their Implication for Company Strategy. Journal of Business Ethics, 44(2), 185-193. https://doi.org/10.1023/A:1023399732720 DOI: https://doi.org/10.1023/A:1023399732720
Freeman, R. E. (2010). Strategic Management: A Stakeholder Approach. Cambridge: Cambridge University Press. DOI: https://doi.org/10.1017/CBO9781139192675
Handriani, E., & Robiyanto, R. (2018). Investment opportunity and industrial growth in Indonesia. International Journal of Business and Society, 19(2), 295-312. http://www.ijbs.unimas.my/images/repository/pdf/Vol19-no2-paper3.pdf
Handriani, E., & Robiyanto, R. (2019). Institutional ownership, independent board, board size, and firm performance: evidence from Indonesia. ContadurÃa y Administración, 64(3), 1-16. http://doi.org/10.22201/fca.24488410e.2018.1849 DOI: https://doi.org/10.22201/fca.24488410e.2018.1849
Haniffa, R. M., & Cooke, T. E. (2005). The impact of culture and governance on corporate social reporting. Journal of Accounting and Public Policy, 24(5), 391-430. https://doi.org/10.1016/j.jaccpubpol.2005.06.001 DOI: https://doi.org/10.1016/j.jaccpubpol.2005.06.001
Ibrahim, Z., Marshall, A., & Rahman, R. A. (2013). Islamic Social Disclosure (ISCR) of Malaysian Public Listed Companies: Empirical Findings. British Journal of Economics, Finance and Management Sciences, 7(1), 26-46.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X DOI: https://doi.org/10.1016/0304-405X(76)90026-X
Khediri, K. B., Charfeddine, L., & Youssef, S. B. (2015). Islamic versus conventional banks in the GCC countries: A comparative study using classification techniques. Research in International Business and Finance, 33, 75-98. https://doi.org/10.1016/j.ribaf.2014.07.002 DOI: https://doi.org/10.1016/j.ribaf.2014.07.002
Khoirudin, A. (2013). Corporate Governance dan Pengungkapan Islamic Social Reporting pada Perbankan Syariah di Indonesia. Accounting Analysis Journal, 2(2), 227-232. https://doi.org/10.15294/aaj.v2i2.2919
Lestari, P. (2013). Determinants Of Islamic Social Reporting In Syariah Banks: Case Of Indonesia. International Journal of Business and Management Invention, 2(10), 28-34.
Mai, M. U. (2017). Mediation of CSR and Profitability on the Influences of GCG Mechanism to the Firm Value. Jurnal Keuangan dan Perbankan, 21(2), 253-264. http://jurnal.unmer.ac.id/index.php/jkdp/article/view/393 DOI: https://doi.org/10.26905/jkdp.v21i2.393
Manaf, N. B. A., Saad, N. B. M., Mohamad, N. E. A. B., Ali, I. B. M., & Rahim, N. B. (2018). Determinants of Sustainable Growth Rate (SGR) By Using Zakon ’ S Model To Encounter With Shariah Compliance Requirements for Shariah Securities Compliance Firms in Malaysia. International Journal of Industrial Management, 4(4), 61-71.
Muharam, H., Anwar, R. J., & Robiyanto, R. (2019). Islamic stock market and Sukuk market development, economic growth, and trade openness (the case of Indonesia and Malaysia). Business: Theory and Practice, 20, 196-207. https://doi.org/10.3846/btp.2019.19 DOI: https://doi.org/10.3846/btp.2019.19
Musibah, A., & Alfattani, W. (2014). The Mediating Effect of Financial Performance on the Relationship between Shariah Supervisory Board Effectiveness, Intellectual Capital and Corporate Social Responsibility, of Islamic Banks in Gulf Cooperation Council Countries. Asian Social Science, 10(17), 139-164. https://doi.org/10.5539/ass.v10n17p139 DOI: https://doi.org/10.5539/ass.v10n17p139
Nurhikmah, F., &Winarsih, W., & Kusumaningtyas, M. (2018). The Influence of Sharia Supervisory Board and Intellectual Capital Towards Corporate Social Responsibility Disclosure with Financial Performance as The Mediation Variable (Empirical Study of Shariah Banking in Indonesia). Journal of Islamic Banking and Finance, 2(2), 174-188. DOI: https://doi.org/10.21043/malia.v2i2.4785
Othman, R., & Thani, A. M. (2010). Islamic Social Reporting Of Listed Companies In Malaysia. International Business & Economics Research Journal, 9(4). doi:https://doi.org/10.19030/iber.v9i4.561 DOI: https://doi.org/10.19030/iber.v9i4.561
Othman, R., Thani, A. M., & Ghani, E. K. (2009). Determinants of Islamic Social Reporting Among Top Shariah-Approved Companies in Bursa Malaysia Research Journal of Internatıonal Studıes(12), 4-20.
Ousama, A. A., & Fatima, A. H. (2010). Voluntary disclosure by Shariah approved companies: an exploratory study. Journal of Financial Reporting and Accounting, 8(1), 35-49. https://doi.org/10.1108/19852511011055943 DOI: https://doi.org/10.1108/19852511011055943
Purnamawati, I. G. A., Yuniarta, G. A., & Astria, P. R. (2017). Good Corporate Governance dan Pengaruhnya Terhadap Nilai Perusahaan Melalui Corporate Social Responsibility Disclosure. Jurnal Keuangan dan Perbankan, 21(2), 276-286. DOI: https://doi.org/10.26905/jkdp.v21i2.505
Renneboog, L., ter Horst, J., & Zhang, C. (2008). The price of ethics and stakeholder governance: The performance of socially responsible mutual funds. Journal of Corporate Finance, 14(3), 302–322. https://doi.org/10.1016/j.jcorpfin.2008.03.009 DOI: https://doi.org/10.1016/j.jcorpfin.2008.03.009
Riahiâ€Belkaoui, A. (2003). Intellectual capital and firm performance of US multinational firms: A study of the resourceâ€based and stakeholder views. Journal of Intellectual Capital, 4(2), 215-226. https://doi.org/10.1108/14691930310472839 DOI: https://doi.org/10.1108/14691930310472839
Robiyanto, R., Anggraeni, A. D., Nugraha, A. K. N. A., & Lako, A. (2019). The Effect of Good Corporate Governance Mechanism on Firm Value of Indonesian Socially Responsible Firms. Quality: Access to Success, 20(173), 59-63.
Robiyanto, R., Putra, A. R., & Lako, A. (2019). The effect of corporate governance and intellectual capital toward financial performance and firm value of socially responsible firms. ContadurÃa y Administración, 66(1), 1-29. http://dx.doi.org/10.22201/fca.24488410e.2021.2489 DOI: https://doi.org/10.22201/fca.24488410e.2021.2489
Robiyanto, R., Santoso, M. A., & Ernayani, R. (2019). Sharia Mutual Funds Performance in Indonesia. Business: Theory and Practice, 20, 11-18. https://doi.org/10.3846/btp.2019.02 DOI: https://doi.org/10.3846/btp.2019.02
Santoso, N. T., Ningsih, R. M., & Paramitha, R. P. (2017). Determinants of Islamic Social Reporting Disclosure: The Case of Jakarta Islamic Index. In R. Said, N. Z. M. Sidek, Z. Azhar, & K. A. Kamarudin (Eds.), State-of-the-Art Theories and Empirical Evidence (pp. 27-39). Singapore: Springer. http://doi-org-443.webvpn.fjmu.edu.cn/10.1007/978-981-10-6926-0_2 DOI: https://doi.org/10.1007/978-981-10-6926-0_2
Smith, R. E. (2011). Defining Corporate Social Responsibility: A Systems Approach For Socially Responsible Capitalism. (Master of Philosophy Thesis), University of Pennsylvania, Philadelphia. Retrieved from http://repository.upenn.edu/cgi/viewcontent.cgi?article=1009&context=od_theses_mp
Sunarsih, U., & Ferdiansyah, F. (2017). Determinants of the Islamic Social Reporting Disclosure. Journal of Islamic Economics, 9(1), 69-80. http://dx.doi.org/10.15408/aiq.v9i1.3771 DOI: https://doi.org/10.15408/aiq.v9i1.3771
Wahyudi, S., Nofendi, D., Robiyanto, R., & Hersugondo, H. (2018). Factors affecting return on deposit (ROD) of sharia banks in Indonesia Business: Theory and Practice, 19, 166-176. https://doi.org/10.3846/btp.2018.17 DOI: https://doi.org/10.3846/btp.2018.17