Proceedings of the 1st International Conference on Applied Social Sciences, Business, and Humanity, ICo-ASCNITY, 2 November 2019, Padang, West Sumatra, Indonesia

Research Article

The Transparency of Risk Information in Islamic Banks: The Role of Independent Director and Shariah Supervisory

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  • @INPROCEEDINGS{10.4108/eai.1-11-2019.2293982,
        author={Gusrianti  Gusrianti and Evony Silvino Violita},
        title={The Transparency of Risk Information in Islamic Banks: The Role of Independent Director and Shariah Supervisory },
        proceedings={Proceedings of the 1st International Conference on Applied Social Sciences, Business, and Humanity, ICo-ASCNITY, 2 November 2019, Padang, West Sumatra, Indonesia},
        publisher={EAI},
        proceedings_a={ICO-ASCNITY},
        year={2020},
        month={4},
        keywords={islamic banks independent director shariah supervisory board (ssb) characteristics transparency of risk information},
        doi={10.4108/eai.1-11-2019.2293982}
    }
    
  • Gusrianti Gusrianti
    Evony Silvino Violita
    Year: 2020
    The Transparency of Risk Information in Islamic Banks: The Role of Independent Director and Shariah Supervisory
    ICO-ASCNITY
    EAI
    DOI: 10.4108/eai.1-11-2019.2293982
Gusrianti Gusrianti1,*, Evony Silvino Violita1
  • 1: Magister Science in Accounting, Faculty of Economics and Business, Universitas Indonesia, Depok, Indonesia
*Contact email: gusriantigmn@gmail.com

Abstract

This study aims to examine the effect of supervision carried out by independent director and Sharia Supervisory Board (SSB) to the transparency of risk information in Islamic banks. Data collection is carried out by analyzing the content of the annual reports of 30 Islamic banks in 2014-2017 using the transparency of risk information Index (TRII) of Islamic Banks. The result shows that the level of transparency of risk information in Islamic banks is still relatively low (59%). Regression shows that the characteristics of SSB are positively related to the transparency of risk information on Islamic banks, while independent directors are not. This research shows that the oversight mechanism carried out by SSB is more effective in encouraging transparency of risk information of Islamic banks than independent directors. This research implies the importance of strengthening the role and position of the SSB in encouraging transparency of risk information in Islamic banks.