Determinants of corporate governance disclosures of Islamic banks in Sudan: implications for Shariah governance

The paper examines the association between the effectiveness of governance bodies in Islamic banks and corporate governance disclosure (CGD) in a sample of Sudanese banks. We analysed the content of annual reports and employed ordinary least squares (OLS) regression model with pooled effects. Consistent with previous studies in Islamic banks, the findings of this paper revealed low levels of CGD in Islamic banks of Sudan, which is only 39%, on average. The findings showed that Islamic banks with SSB members who hold advanced qualifications provided more information on CGD than their counterparts. However, we found that banks with SSB members who sit on more than one board tend to have lower CGD. In addition, we found that Islamic banks that have an established audit committee (AC), internal audit function (IAF) and low levels of governmental ownership have higher CGD levels. These results are robust to alternative empirical models. Our study adds to the ongoing debate of Shariah governance in Islamic banks. In particular, while we support that IAF may play a significant role in Shariah governance as recommended by the regulators of Islamic banking industry, our evidence shows that SSB multiple directorships, ceteris paribus, are not advantageous for Islamic banks.