Proceedings of 32nd International Business Research Conference
23 - 25 November, 2015, Rendezvous Hotel, Melbourne, Australia
ISBN: 978-1-922069-89-4
The Influance of Cross-Directorship, The Competency and
The Reputation of Shariah Supervisory Board to Islamic
Social Reporting of Islamic Banking in Indonesia
Rifqi Muhammad and Ferdista Hikmasetyadi
Abstract
Islamic banks are one of the most important Islamic institutions. In theory, Islamic banks
are also unique institutions, as they should not only focus on economic matters but also
should focus on their social roles to their society. Islamic social reporting emerges as an
alternative to fill this gap. Islamic social reporting is the process of identifying, providing,
and communicating social and other relevant information in conformity with the spiritual
need of Muslims decision makers in order to demonstrate accountability to God and
community; to increase transparency of business activities toward Muslim Ummah; and
to achieve Mardhatillah (blessing from Allah).
During the measurement of social responsibility disclosure in Islamic banking still refers
to the Index of Global Reporting Initiative (GRI), but this time a lot of discussion about the
Islamic Social Reporting (ISR) in accordance with Islamic principles. This study aimed to
determine the influence of variables cross-directorship, the competency, and the
reputation Shariah Supervisory Board (SSB) to the Islamic Social Reporting (ISR). SSB
has the roles of reviewing and auditing the documents and activities of Islamic financial
institutions in accordance with Islamic principles and to ensure that the vision, mision,
and strategic of organization are always fulfill the Shariah compliance.
Furthermore, the level of disclosure of corporate social reporting of Islamic banks in
Indonesia would be measured by proposing some disclosures items based on
Governance Standards of Islamic Financial Institutions (GSIFI) No. 7 about Corporate
Social Responsibility Conduct and Disclosure for Islamic Financial Institutions that was
issued by Accounting and Auditing Organization for Islamic Financial Institutions
(AAOIFI) and previous research.
The population of this research is all Islamic banks in Indonesia including full-fledge
Islamic banks and Islamic windows. The total samples tested are 33 Islamic banks were
selected by purposive sampling method during the year of 2010 - 2013. This study
analyzes the annual reports of Islamic banks particularly on social disclosures. Technical
analysis of this research using descriptive analysis and statistical analysis of regression.
This study found that the cross-directorship and the competency have significantly
influence the Islamic Social Reporting disclosure and the reputation of SSB does not
have a significant influence on the ISR disclosures.
Keywords : Islamic Social Reporting (ISR), Cross-Directorship, Competency,
Reputation, Shariah Supervisory Board (SSB)
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Mr. Rifqi Muhammad, *Corresponding author, Accounting Department, Faculty of Economics, Universitas
Islam Indonesia, Jalan Ringroad Utara, Condongcatur, Sleman, Yogyakarta, Indonesia 55283,
Email: rifqimuhammad@yahoo.com, rifqimuhammad@uii.ac.id,
Ferdista Hikmasetyadi, Universitas Islam Indonesia, Indonesia.