Corporate social responsibility disclosure and Shari'ah supervisory board : a case study of Islamic banks in GCC region

The awareness of corporate social responsibility (CSR) has been observed among firms since last few decades. The existing literature related to Islamic finance has emphasised nature and level of CSR disclosure, rather than examining the elements that may impact the level of such CSR disclosure. Based on such understanding, this study aims to examine the level of the CSR disclosure as well as measure the impact of the Shari’ah Supervisory Board (SSB) on level of the CSR disclosure of Islamic banks in the Gulf Cooperation Council (GCC) countries. In order to test the research hypotheses and answer the research questions, this study uses the data gathered from the annual reports of the sampled GCC Islamic banks covering the period between 2006 and 2016. Accordingly, this study applied the content analysis method to analyse the data from twenty-eight Islamic banks. Furthermore, this study uses OLS multiple regression with fixed effect model to examine the effect of SSB on the level of CSR disclosure in the case of the sampled GCC Islamic banks. The research findings reported that the examined Islamic banks in the GCC region scored relatively a low level of CSR disclosure at a value of 0.53. Furthermore, the fixed effect regression model shows that SSB has a significant and positive relationship on the level of CSR disclosure in the case of the examined Islamic banks. Having achieved such results, it can be stated that when Islamic banks pay more attention to their SSB, they will disclose a greater level of information related to their CSR activities in their annual reports. Furthermore, to have a comprehensive understanding, this study examined the effect of SSB on the individual dimensions of the CSR, where statistically significant relationship is achieved by fixed effect regression analysis of the examined data throughout the sample period in the case of the GCC Islamic banks