Relationship between sharia supervisory board attributes and sustainable development goals (SDGs) financing in Islamic banks

ABSTRACT

It has been widely believed that Islamic finance holds a potential role in achieving sustainable development goals (SDGs). Hence, considering the power of the Shari’a Supervisory Board (SSB) to approve or reject Islamic banking products, this paper investigates the association between SSB attributes and Islamic banks’ SDG financing. The study utilized unbalanced data generated from a sample of 32 fully Sharia-compliant Islamic banks across nine (9) countries between 2013 and 2021. The findings reveal that SSB size and SSB financial expertise significantly reduced Shariá-compliant financing for agriculture, education, and health economic activities. Besides, while SSB foreign scholars have an insignificant association with agriculture and education financing, they significantly reduced financing for health. In contrast, SSB meetings and SSB gender diversity significantly increased funding for these activities. These findings could assist regulators in revising the SSB codes of governance to enhance their effectiveness in supporting Islamic banks’ activities aimed at achieving SDGs.

KEYWORDS:

• Shari’a Supervisory Board (SSB)
• Sustainable Development Goals (SDGs)
• SDG financing
• Islamic banks

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Umar Habibu Umar

Umar Habibu Umar is among the pioneer academic staff of Yusuf Maitama Sule (Formerly Northwest) University, Kano, Nigeria, established in 2012. He was a former Head of the Department of Accounting of the university and has just completed his PhD program in Finance at Universiti Brunei Darussalam, Brunei Darussalam. Umar is also a member of the Institute of Chartered Accountants of Nigeria. Further, Umar’s research interest revolves around Corporate governance, Corporate social responsibility, and Islamic Accounting and Finance. Umar has developed a special interest in research that links accounting to Islamic inheritance. Currently, Umar has published papers in many reputable journals, which include ISRA International Journal of Islamic Finance, Journal of Islamic Accounting and Business Research, International Journal of Islamic and Middle Eastern Finance and Management, Social Responsibility, International Journal of Ethics and System, African Journal of Economics and Management Studies, Corporate Governance (Bingley), Journal of Accounting & Organizational Change, etc. Meanwhile, he is an active reviewer of most of these journals, including Financial Innovation (Springer), Cogent Economics and Finance (Taylor and Francis), etc.