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Islamic financial institutions and corporate governance: New insights for agency theory

Show simple item record Safieddine A.
dc.contributor.editor 2009 2017-09-07T07:51:44Z 2017-09-07T07:51:44Z 2009
dc.identifier 10.1111/j.1467-8683.2009.00729.x
dc.identifier.issn 09648410
dc.description.abstract Manuscript Type: Empirical Research Question-Issue: This paper takes a theory building approach to highlighting variations of agency theory in the unique and complex context of Islamic banks, mainly stemming from the need to comply with Sharia and the separation of cash flow and control rights for a category of investors. Research Findings-Results: The paper provides insights that agency structures in the context of Islamic banking might give rise to trade-offs between Sharia compliance and mechanisms protecting investors' rights. Alternative models of idiosyncratic governance might be effective in balancing the two cornerstones of the agency dynamic. In practice, the paper finds that most of the surveyed Islamic banks appear to recognize the value of governance and institute some basic mechanisms. Nonetheless, some governance flaws relating to audit, control, and transparency are observed, a situation further exacerbated by the fact that investment account holders are not represented on the board, and are not granted control or monitoring rights. This leads to a discussion on the tradeoff between the costs and benefits of such a practice. Theoretical Implications: This study contributes to the agency theory literature by providing theoretical propositions highlighting challenges to this theory whereby mechanisms with the purpose of mitigating agency problems might lead to a divergence from Islamic principles of Sharia. Practical Implications: The paper motivates Islamic banks to improve governance practices currently in place. It alerts policy makers to the need to tailor the regulations to safeguard the interests of all investors without violating the principles of Sharia. © 2009 Blackwell Publishing Ltd.
dc.format.extent Pages: (142-158)
dc.language English
dc.publisher MALDEN
dc.relation.ispartof Publication Name: Corporate Governance; Publication Year: 2009; Volume: 17; no. 2; Pages: (142-158);
dc.source Scopus
dc.title Islamic financial institutions and corporate governance: New insights for agency theory
dc.type Article
dc.contributor.affiliation Safieddine, A., School of Business, American University of Beirut, Bliss Street, Beirut, Lebanon, Lebanon, American University of Beirut, Lebanon
dc.contributor.authorAddress Safieddine, A.; School of Business, American University of Beirut, Bliss Street, Beirut, Lebanon, Lebanon; email:
dc.contributor.authorCorporate University: American University of Beirut; Faculty: Suliman S. Olayan School of Business; Department: School of Business;
dc.contributor.authorDepartment School of Business
dc.contributor.authorFaculty Suliman S. Olayan School of Business
dc.contributor.authorInitials Safieddine, A
dc.contributor.authorReprintAddress Safieddine, A (reprint author), Amer Univ Beirut, Sch Business, Corp Governance Program, Bliss St,POB 11-0236, Beirut, Lebanon.
dc.contributor.authorUniversity American University of Beirut
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dc.description.citedCount 9
dc.description.citedTotWOSCount 5
dc.description.citedWOSCount 5
dc.format.extentCount 17
dc.identifier.scopusID 62249130156
dc.publisher.address COMMERCE PLACE, 350 MAIN ST, MALDEN 02148, MA USA
dc.relation.ispartOfISOAbbr Corp. Gov.
dc.relation.ispartOfIssue 2
dc.relation.ispartofPubTitle Corporate Governance
dc.relation.ispartofPubTitleAbbr Corp. Gov.
dc.relation.ispartOfVolume 17
dc.source.ID WOS:000263965700003
dc.type.publication Journal
dc.subject.otherAuthKeyword Agency Theory
dc.subject.otherAuthKeyword Board Evaluation
dc.subject.otherAuthKeyword Board of Director Issues
dc.subject.otherAuthKeyword Corporate Governance
dc.subject.otherAuthKeyword Gulf States
dc.subject.otherKeywordPlus PERFORMANCE
dc.subject.otherKeywordPlus OWNERSHIP
dc.subject.otherKeywordPlus BOARD
dc.subject.otherWOS Business
dc.subject.otherWOS Business, Finance
dc.subject.otherWOS Management

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