The Sharia Supervisory Board: Does it Influence Corporate Social Responsibility Disclosure by Islamic Banks? A Review

Abstract

This paper aims at reviewing current empirical studies on Corporate Social Responsibility (CSR) disclosure in Islamic banks in an attempt to elicit a general conclusion of relevance of the Sharia Supervisory Board (SSB) to the level of Islamic Banks’ corporate social responsibility disclosure and its improvement. The paperis based on a comprehensive review of researches that explore and discuss the issue of CSR disclosure in Islamic banks. The study suggests that despite Islamic banks’ assertion of commitment to Sharia teachings, such commitment does not appear to be translated in their disclosure of socially related undertakings; their CSR disclosure is far below average. The influence of the SSB on CSR disclosure is found to be a positive one. This implies that SSBs have the potentials to further enhance and improve the quality of Islamic banks CSR reporting. This however, requires changes regarding the position and functioning of SSB as an element of Sharia corporate governance. The paper contributes to the growing debate on CSR from Islamic perspective by providing some insights and suggestions and opens doors for more researches to arrive at a deeper understanding of the determinants of disclosure practices in Islamic banks.