Raden Mas Said State Islamic University in Surakarta
International Conference on Islamic Economics Studies (ICIES)

The Influence of the Board of Directors and the Sharia Supervisory Board on Zakat Funds in Islamic Commercial Banks in Indonesia

Date Published : 22 October 2024

Contributors

Nur Wahyuningsih

Author

Devi Narulitasari

Author

Keywords

Corporate governance Social performance Zakat funds Sharia Supervisory Board

Proceeding

Vol. 1 No. 1 (2024): The 4th International Conference on Islamic Economics Studies

Track

General Track

Abstract

This research purpose to examine the influence of corporate governance on zakat fund distribution by Islamic commercial banks in Indonesia, with a focus on two key governance components: the characteristics of the Board of Directors and the Sharia Supervisory Board. In Islamic banking, the presence of the Board of Directors and the Sharia Supervisory Board plays a crucial role in ensuring that the bank's operations comply with Sharia principles, including the management of zakat funds. This research employs a quantitative research method, using data from the annual reports of Islamic commercial banks in Indonesia from 2016 to 2022. The data was then analyzed using panel data regression with EViews 12. The findings show that the size of the Board of Directors and the size of the DPS do not influence zakat funds, whereas the remuneration of the Board of Directors and the reputation of the DPS have a positive effect on zakat funds. This research adds to the literature on the role of governance in improving the performance of Islamic banks by offering empirical evidence of the connection between governance and the enhancement of zakat. The practical implications is that Islamic banks seeking to boost their social performance, particularly in terms of zakat funds, should focus on building a strong reputation for their Sharia Supervisory Board and increasing the remuneration of the Board of Directors.

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How to Cite

Nur Wahyuningsih, & Devi Narulitasari. (2024). The Influence of the Board of Directors and the Sharia Supervisory Board on Zakat Funds in Islamic Commercial Banks in Indonesia. International Conference on Islamic Economics Studies (ICIES), 1(1), 147-160. https://conferences.uinsaid.ac.id/icies/paper/view/49