IDEAS home Printed from https://ideas.repec.org/a/eme/imefmp/v5y2012i2p88-105.html
   My bibliography  Save this article

The conflicts of interest inside theShari'asupervisory board

Author

Listed:
  • Samy Nathan Garas

Abstract

Purpose - The purpose of this study is to identify the relation between the conflicts of interest in theShari'aSupervisory Board (SSB) in the Islamic financial institutions (IFIs) and six independent variables: the SSB executive position, the SSB remuneration, the relation between the SSB members and the Board of Directors (BoD), and the multiple memberships in Islamic funds, issuers of Islamic bonds (Sukuk), and companies trading in capital markets. Design/methodology/approach - The variables are articulated in six hypotheses and tested by ordinary least square regression. The data were collected via a questionnaire which was sent to the shareholders, the BoD, and the SSB members of all of the IFIs in the Gulf Cooperation Council (GCC) countries. Findings - The results indicate that the SSB executive position, the relation between the SSB members and the BoDs, and the membership in Islamic funds and issuers of Islamic bonds are significantly related to the conflicts of interest, whereas remuneration and membership in companies trading in capital markets have insignificant relation. Research limitations/implications - The paper does not address the impact of SSB ownership in the IFIs, or the relation between the SSB and the shareholders, or the impact of the corporate governance codes on the relationship between the IFI and the SSB. Practical implications - The study recommends testing the hypotheses in other geographies to generalize the results, and measuring the impact of the SSB ownership on the conflicts of interest as well as its relation with shareholders, regulators, and clients. Social implications - The paper provides practical implications to the SSB members and the BoD in the IFIs and calls for setting a maximum number of SSBs for each SSB member. Originality/value - This study contributes to the literature gap of the SSB role in the governance of IFIs. It is believed to be one of first studies that provide empirical evidence about the SSB conflicts of interest in the IFIs of the GCC region.

Suggested Citation

  • Samy Nathan Garas, 2012. "The conflicts of interest inside theShari'asupervisory board," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 5(2), pages 88-105, June.
    • Handle: RePEc:eme:imefmp:v:5:y:2012:i:2:p:88-105
    DOI: 10.1108/17538391211233399
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/17538391211233399/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/17538391211233399/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/17538391211233399?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:imefmp:v:5:y:2012:i:2:p:88-105. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.