Strategic Innovation in Sharia Governance: The Evolving Management Role of the Sharia Supervisory Board
DOI:
https://doi.org/10.55583/ijisim.v2i1.953Keywords:
Sharia Supervisory Board, Sharia SupervisionAbstract
The Shariah Supervisory Board (DPS) plays a vital role in ensuring that the operations and financial products of Islamic financial institutions comply with Shariah principles. This research aims to explore the roles, responsibilities, and challenges faced by DPS through analyzing the available literature. Through the literature study method, this research analyzes various secondary sources, including scientific articles, books, regulations, and reports from Islamic financial institutions. The results show that DPS has a key role in providing trust to stakeholders, but also faces various challenges, such as the lack of uniform global standards and limited resources. This study provides recommendations to strengthen the role of DPS, including improved training and education of DPS members, as well as harmonization of regulations at the international level. Thus, DPS can be more effective in supporting the sustainable growth of the Islamic finance industry in accordance with Islamic principles.
References
Aliyu, S., & Yusof, R. M. (2016). Profitability and cost efficiency of Islamic banks: A panel analysis of some selected countries. International Journal of Economics and Financial Issues, 6(4), 1736-1743. https://doi.org/10.2139/ssrn.2751051
Aminah, S. (2019). Dewan Pengawas Syariah. Stebis Darussalam.
Azad, A. S. M. S., & Ibrahim, M. H. (2019). Market structure and competition in emerging markets: Evidence from the Malaysian Islamic banking industry. Emerging Markets Finance and Trade, 55(1), 65-81. https://doi.org/10.1080/1540496X.2018.1517883
Bakar, N. A., & Yusoff, M. E. (2016). Sharia governance: Effectiveness in the Malaysian Islamic financial institutions. Journal of Islamic Accounting and Business Research, 7(4), 342-362. https://doi.org/10.1108/JIABR-11-2015-0055
Chazi, A., & Syed, L. A. M. (2010). Risk exposure during the global financial crisis: The case of Islamic banks. International Journal of Islamic and Middle Eastern Finance and Management, 3(4), 321-333. https://doi.org/10.1108/17538391011093261
El-Hawary, D., Grais, W., & Iqbal, Z. (2007). Diversity in the regulation of Islamic financial institutions. The Quarterly Review of Economics and Finance, 46(5), 778-800. https://doi.org/10.1016/j.qref.2006.08.010
Farook, S., & Farooq, M. (2019). The socio-economic development role of awqaf in the Islamic Republic of Iran and Pakistan. Journal of Islamic Accounting and Business Research, 10(4), 437-453. https://doi.org/10.1108/JIABR-12-2017-0176
Grassa, R. (2013). Sharia governance system in Islamic financial institutions: An ethical perspective. Journal of Business Ethics, 123(4), 601-614. https://doi.org/10.1007/s10551-013-2007-8
Hasan, M., & Dridi, J. (2011). The effects of the global crisis on Islamic and conventional banks: A comparative study. Journal of International Commerce and Economics, 3(3), 1-24. https://doi.org/10.5089/9781463931909.001
Khan, M. F., & Bhatti, M. I. (2008). Development in Islamic banking: A financial risk-allocation approach. The Journal of Risk Finance, 9(1), 40-51. https://doi.org/10.1108/15265940810842401
Khan, M. M., & Azad, M. M. (2021). Innovation management in Islamic finance: Exploring the nexus of Sharia compliance and financial technology. Journal of Islamic Accounting and Business Research, 12(1), 18-32. https://doi.org/10.1108/JIABR-03-2020-0075
Mollah, S., & Zaman, M. (2015). Sharia supervision, corporate governance and performance: Conventional vs. Islamic banks. Journal of Banking & Finance, 58, 418-435. https://doi.org/10.1016/j.jbankfin.2015.04.030
Srairi, S. A. (2009). Cost and profit efficiency of conventional and Islamic banks in GCC countries. Journal of Productivity Analysis, 34(1), 45-62. https://doi.org/10.1007/s11123-009-0161-7
Wirdyaningsih, D. (2005). Bank dan Asuransi Islam di Indonesia. Kencana Pranada Media.
