Shariah Supervisory Board Characteristics and Compliance Disclosures: Preliminary Evidence from African Islamic Banks

This study is motivated by increasing concerns over governance failures in Islamic banks due to inadequate oversight and transparency in Shariah compliance. It explores the association between Shariah Supervisory Board (SSB) characteristics and Shariah compliance disclosures among fully-fledged and hybrid Islamic banks in Africa in light of the agency theory and stakeholder theory. The population comprises Islamic banks operating across Africa, with the sample drawn purposively from six banks in Egypt, Ethiopia, Nigeria, South Africa, and The Gambia. The study employed content analysis of the annual reports between 2022 and 2023. Descriptive statistics and non-parametric tests were primarily used to analyse the data, while logistic regression analysis supported and compared the findings. The results reveal a positive and statistically significant association between SSB Size and Shariah Compliance disclosures. Other attributes, such as SSB Independence and Qualifications, showed no statistically significant relationship. These findings yield preliminary insights into governance disclosures in African Islamic banking and highlight board size as a potential determinant of transparency. The study addresses a gap in the literature and provides a foundation for future research in African Islamic finance. Moreover, the study recommends that Islamic banks improve their disclosure practices and empower their SSB while recommending that regulators develop standardised disclosure frameworks aligned with international best practices.