The Effect of Shariah Supervisory Board (SSB) on Corporate Social Responsibility (CSR) Disclosure in MENA Islamic Banks
DOI:
https://doi.org/10.56830/IJAMS04202504Keywords:
Corporate Social Responsibility, Shariah Supervisory Board, MENA, Islamic Banks, AAOIFIAbstract
Based on agency theory, the main aim of this research is to examine the effectiveness of Shariah Supervisory Board (SSB) characteristics on Corporate Social Responsibility (CSR) disclosure depending on the AAOIFI standard no.7. standard. Using unbalanced sampling, the research covered 64 Islamic banks from 13 countries in the Middle East and North Africa (MENA) region for the period 2012–2022. The study applies system generalized method of moments (SGMM) for hypothesis testing to control for potential endogeneity, reverse causality, and dynamic heterogeneity respective dependent variables. The statistical results reveal that SSBI has a significant relationship with CSR disclosure. The findings have important implications for managers, policymakers, and stakeholders’ perspectives of MENA IBs. Priority should be given by managers of IBs in MENA countries to CSR activities that are in line with their main business objectives, such as promoting ethical and sustainable financing. This can help improve the bank’s reputation and promote customer loyalty, which ultimately contributes to the bank’s performance. Future research can examine moderating factors, such as FinTech, in the relationship between CSR and IB’s performance, which have not been covered in Islamic banking context, as the FinTech technology is currently a very interesting and growing area in IBs.
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