Executives’ commitment, corporate governance, and performance of Islamic banks: Evidence from the Saudi context
This paper aims to investigate the impact of executives’ ethical commitment and corporate governance on the Islamic banks’ performance in the Saudi context. The sample of this study consists of Saudi Islamic banks over the period 2012–2020. The financial data were extracted from the Saudi stock exch...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2022-05-01
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| Series: | Banks and Bank Systems |
| Subjects: | |
| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16563/BBS_2022_02_Aliani.pdf |
| _version_ | 1828147760226893824 |
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| author | Khaoula Aliani Aysha Alsalih Fadhila Hamza |
| author_facet | Khaoula Aliani Aysha Alsalih Fadhila Hamza |
| author_sort | Khaoula Aliani |
| collection | DOAJ |
| description | This paper aims to investigate the impact of executives’ ethical commitment and corporate governance on the Islamic banks’ performance in the Saudi context. The sample of this study consists of Saudi Islamic banks over the period 2012–2020. The financial data were extracted from the Saudi stock exchange (Tadawul). While the behavioral data, particularly the executives’ ethical commitment, is measured through the ethical commitment index. In the econometric analysis, a generalized least square regression method (GLS) is applied to two different sub-models with different dependent variables (return on assets and return on equity). Empirical results suggest that board size and board independence have a significant impact on bank performance. The ethical commitment of executives contributes positively and significantly to the performance of Islamic banks in terms of return on assets. However, there is no statistical evidence of the effect of ethical commitment on Islamic banks’ returns on equity. Therefore, boards of directors of Islamic banks should include expert independent directors to promote best governance practices and enhance executives’ commitment. Larger boards can improve their credit ratings and access to resources.
AcknowledgmentThis study was funded by Deanship of Scientific Research at Princess Nourah bint Abdulrahman University (Grant No. 39/S/243). |
| first_indexed | 2024-04-11T21:04:54Z |
| format | Article |
| id | doaj.art-6a0e0b77f0984598a9d9d46f4ad87bd9 |
| institution | Directory Open Access Journal |
| issn | 1816-7403 1991-7074 |
| language | English |
| last_indexed | 2024-04-11T21:04:54Z |
| publishDate | 2022-05-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Banks and Bank Systems |
| spelling | doaj.art-6a0e0b77f0984598a9d9d46f4ad87bd92022-12-22T04:03:22ZengLLC "CPC "Business Perspectives"Banks and Bank Systems1816-74031991-70742022-05-01172869710.21511/bbs.17(2).2022.0816563Executives’ commitment, corporate governance, and performance of Islamic banks: Evidence from the Saudi contextKhaoula Aliani0https://orcid.org/0000-0001-6299-7991Aysha Alsalih1https://orcid.org/0000-0003-1737-9822Fadhila Hamza2https://orcid.org/0000-0002-2145-8016Assistant Professor, Business Administration Department, College of Business and Administration, Princess Nourah bint Abdulrahman UniversityAssistant Professor, Accounting Department, College of Business and Administration, Princess Nourah bint Abdulrahman UniversityAssistant Professor, Accounting Department, College of Business and Administration, Princess Nourah bint Abdulrahman UniversityThis paper aims to investigate the impact of executives’ ethical commitment and corporate governance on the Islamic banks’ performance in the Saudi context. The sample of this study consists of Saudi Islamic banks over the period 2012–2020. The financial data were extracted from the Saudi stock exchange (Tadawul). While the behavioral data, particularly the executives’ ethical commitment, is measured through the ethical commitment index. In the econometric analysis, a generalized least square regression method (GLS) is applied to two different sub-models with different dependent variables (return on assets and return on equity). Empirical results suggest that board size and board independence have a significant impact on bank performance. The ethical commitment of executives contributes positively and significantly to the performance of Islamic banks in terms of return on assets. However, there is no statistical evidence of the effect of ethical commitment on Islamic banks’ returns on equity. Therefore, boards of directors of Islamic banks should include expert independent directors to promote best governance practices and enhance executives’ commitment. Larger boards can improve their credit ratings and access to resources. AcknowledgmentThis study was funded by Deanship of Scientific Research at Princess Nourah bint Abdulrahman University (Grant No. 39/S/243).https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16563/BBS_2022_02_Aliani.pdfbanking governanceethical commitmentGLSperformance |
| spellingShingle | Khaoula Aliani Aysha Alsalih Fadhila Hamza Executives’ commitment, corporate governance, and performance of Islamic banks: Evidence from the Saudi context Banks and Bank Systems banking governance ethical commitment GLS performance |
| title | Executives’ commitment, corporate governance, and performance of Islamic banks: Evidence from the Saudi context |
| title_full | Executives’ commitment, corporate governance, and performance of Islamic banks: Evidence from the Saudi context |
| title_fullStr | Executives’ commitment, corporate governance, and performance of Islamic banks: Evidence from the Saudi context |
| title_full_unstemmed | Executives’ commitment, corporate governance, and performance of Islamic banks: Evidence from the Saudi context |
| title_short | Executives’ commitment, corporate governance, and performance of Islamic banks: Evidence from the Saudi context |
| title_sort | executives commitment corporate governance and performance of islamic banks evidence from the saudi context |
| topic | banking governance ethical commitment GLS performance |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16563/BBS_2022_02_Aliani.pdf |
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