The relationship between agency theory, stakeholder theory and Shariah supervisory board in Islamic banking: An attempt towards discussion. Issue 1 (13th February 2017)

• Record Type: Journal Article
• Authors: Al-Nasser Mohammed, Sulaiman Abdullah Saif; Muhammed, Joriah
• Is Part Of: Humanomics. Volume 33:Issue 1(2017)
• Page Start: 75
• Page End: 83
• Publication Date: 2017-02-13
• Subjects: Corporate governance -- Performance -- Islamic banks -- Islamic perspective -- Shariah supervisory board (SSB); Economic development -- Moral and ethical aspects -- Periodicals; Economic policy -- Moral and ethical aspects -- Periodicals; Social change -- Moral and ethical aspects -- Periodicals; 338.9001
• DOI: 10.1108/H-08-2016-0062
• Languages: English
• ISSNs: 0828-8666

Abstract

Abstract : Purpose: In relation to the critical problem, this paper aims to present an understanding of the agency theory and the stakeholder theory from the perspective of the Islamic principles. Indeed, a thorough examination of the theoretical background explaining corporate governance from the Islamic perspective is necessary to conduct research analysing corporate governance in Islamic banks. Design/methodology/approach: The authors followed a critical review discussion; this method takes into consideration presenting important theories and comparing those theories with Islamic perspective. Findings: The authors presented important arguments on the difference between ordinary theories to explaining corporate governance and Islamic perspective. The paper browsed into whether the Shariah Supervisory Board is a fit with the agency theory by explaining the agency theory and how it differs from the Islamic banking concepts. The paper involved an analytical review on stakeholder theory and presented a critique and the rationale as to why there is ample room for the Shariah Supervisory Board to be considered a fit with the stakeholder theory, as the Shariah Supervisory Board is an independent body influencing the firm. Originality/value: The paper is of important value to those conducting research in the area of governance in Islamic banks; they may find it beneficial in terms of underlining theory building their research framework.