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The effect of CEO characteristics on Takaful performance

Author

Listed:
  • Nourhen Sallemi

    (University of Sfax)

  • Ghazi Zouari

    (University of Sfax)

Abstract

The chief executive officer (CEO) characteristics play a vital role in ensuring the effectiveness of Takaful insurance in terms of performance. This paper aims to examine the effect of CEO characteristics on the performance of Takaful insurance providers of distinguishable Muamalah contracts (wakalah and hybrid). A PLS-PM method has been used in this study. Particularly, this study uses a sample that comprises 18 Takaful insurances which use wakalah contracts sited in Southeast Asia (SEA) and 12 Takaful insurances which use hybrid contracts listed in Gulf Cooperation Council (GCC) countries for the period 2010–2020. We find that the professional qualification of CEOs contributes to higher performance for Takaful insurances which use wakalah contracts operating in Southeast Asia countries, whereas professional qualification of CEOs has a negative effect on the performance of Takaful insurances which use hybrid contracts operating in GCC countries. Additionally, female CEOs are beneficial for Takaful performance, which uses wakalah contracts operating in south and Southeast Asia countries, whereas male CEOs are beneficial for Takaful performance, which use hybrid contracts sited in GCC countries. Well CEO overconfidence contributes to improving Takaful performance sited in both GCC and Southeast Asia countries. This paper provides insights to regulators who are entrusted with the appointment of the CEOs in the Takaful in light of the ongoing regulatory reforms. Thus, it can be considered as one of the early studies, which investigate the relationship between CEO characteristics and Takaful performance. It also extends the existing study by considering both Takaful insurances, which use wakalah contracts and Takaful insurances which use hybrid contracts.

Suggested Citation

  • Nourhen Sallemi & Ghazi Zouari, 2023. "The effect of CEO characteristics on Takaful performance," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 20(1), pages 70-82, March.
    • Handle: RePEc:pal:ijodag:v:20:y:2023:i:1:d:10.1057_s41310-022-00161-5
    DOI: 10.1057/s41310-022-00161-5
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    More about this item

    Keywords

    Takaful performance; CEO characteristics; Muamalat contract; PLS-PM;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G3 - Financial Economics - - Corporate Finance and Governance

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