Proceedings of the International Conference on Management, Accounting, and Economy (ICMAE 2020)

The Quality of Corporate Governance and Its Effect on Sharia Bank Financial Performance in Indonesia

Authors
Susy Muchtar, Powell Gian Hartono, Wahyuni Rusliyana Sari
Corresponding Author
Powell Gian Hartono
Available Online 15 September 2020.
DOI
https://doi.org/10.2991/aebmr.k.200915.045How to use a DOI?
Keywords
corporate governance, bank size, bank age, bank leverage, return on equity
Abstract
The research examines factors that impact financial performance of Islamic Banks. It focuses on the banks listed at Bank Indonesia (BI) and the Financial Services Authority of Indonesia (OJK). The independent variables examined include the efficiency of the Board of Directors, Audit Committee, and Sharia Supervisory Board (SSB), as well as the size, age and equity of the bank. The dependent variable includes the Islamic Bank’s Financial Performance, which is determined using Return on Equity (ROE). Also, the study uses samples of 11 Islamic banks registered at BI and OJK from 2013 to 2017. They were selected using purposive sampling with specific criteria for sample withdrawal and panel data used in processes. The results showed that the Board of Director Effectiveness and Leverage had a significant positive effect on ROE. However, the Audit Committee Effectiveness, Shariah Supervisory Board Effectiveness, Bank Size, Age Bank did not affect ROE. Islamic banks need to pay attention to the factors that influence financial performance, especially the effectiveness of the Board of Directors. This is because their decisions directly contribute to the bank’s performance. For investors, they can see the profits and losses the companies make from year to year through financial statements. They might also determine the quality of corporate governance from the annual reports.
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This is an open access article distributed under the CC BY-NC license.

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Proceedings
International Conference on Management, Accounting, and Economy (ICMAE 2020)
Part of series
Advances in Economics, Business and Management Research
Publication Date
15 September 2020
ISBN
978-94-6239-053-9
ISSN
2352-5428
DOI
https://doi.org/10.2991/aebmr.k.200915.045How to use a DOI?
Open Access
This is an open access article distributed under the CC BY-NC license.

Cite this article

TY  - CONF
AU  - Susy Muchtar
AU  - Powell Gian Hartono
AU  - Wahyuni Rusliyana Sari
PY  - 2020
DA  - 2020/09/15
TI  - The Quality of Corporate Governance and Its Effect on Sharia Bank Financial Performance in Indonesia
BT  - International Conference on Management, Accounting, and Economy (ICMAE 2020)
PB  - Atlantis Press
SP  - 192
EP  - 196
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200915.045
DO  - https://doi.org/10.2991/aebmr.k.200915.045
ID  - Muchtar2020
ER  -