Enhancing Islamic bank performance: the synergy between Shariah supervisory boards and management responsibilities

• Main Authors: Shah, Hassan Shakeel, Musa, Muhammad, Mohd. Zain, Nor Razinah
• Format: Article
• Language: English
• Published: Society of Management Research and Consultancy 2024
• Subjects: BPK Islamic law. Shari'ah. Fiqh; HF5001 Business. Business Administration; HG3368 Islamic Banking and Finance
• Online Access: http://irep.iium.edu.my/116826/3/116826_%20Enhancing%20Islamic%20bank%20performance.pdf; http://irep.iium.edu.my/116826/; https://journals.smarcons.com/index.php/iecs/article/view/276

This article explores the intricate interplay between Shariah Supervisory Boards (SSBs) and the responsibilities of bank management in shaping the performance of Islamic banks. Islamic banking, guided by the principles of Shariah, presents a distinctive model where SSBs ensure compliance with Islamic law, conduct audits, and issue religious rulings. Simultaneously, bank management is tasked with strategic decision-making, product development, risk management, and customer relationship management. The collaboration of these two entities significantly impacts the efficiency, market competitiveness, and financial performance of Islamic banks, creating a compelling value proposition for customers and investors in the contemporary financial landscape. This synergy between SSBs and management is vital in enhancing the overall performance of Islamic banks. The objectives of this study are to discern the roles and responsibilities of both SSBs and bank management and to analyze how their collaboration influences efficiency, market competitiveness, and financial performance. Through this study, we anticipate shedding light on the critical roles of SSBs in ensuring compliance with Islamic law and their rigorous audit procedures, as well as the strategic decision-making, product development, and risk management responsibilities of bank management. The expected outcomes of this research are a holistic perspective on the cooperative efforts of SSBs and management in enhancing Islamic bank efficiency, competitiveness in the financial market, and financial performance. This collaborative approach is anticipated to result in a compelling value proposition for both customers and investors, ultimately underlining the significance of their combined influence on the performance of Islamic banks.