Corporate governance statement disclosure of Malaysian banks and the role of Islam

The objective of this study is to undertake a qualitative study to examine the influence of religion, specifically Islam, on corporate governance statement disclosure in the annual reports of three major Malaysian banks, both conventional and Islamic banks. It has been argued that given the characteristics and values espoused by Islam, there is an expectation that in Malaysia, an Islamic organization ‐like the Bank Islam ‐ should make additional governance disclosures that would set it apart from conventional banks. The evidence thus far seems to suggest that the role of Islam has not been as expected. Specifically, being an Islamic organization (by virtue of label attached to and/or the nature of its operations) and/or having Malays/Muslim directors leading such Islamic organization have not resulted in better corporate governance practices and disclosure relative to other secular banking institutions that have fewer Malay/Muslims directors. Possible implications of these findings are proffered in the paper