Modelo de Atención

As the results of the AAOIFI governance disclosure level showed, the sample of IBs that mandatorily adopt AAOIFI did not disclose information about AAOIFI governance in their annual reports. Considering that the AAOIFI governance standards are primarily the main aspect of Sharia governance in IFIs (to ensure compliance with Sharia principles), these results are discouraging. A probable interpretation of the findings may be related to the overlap between AAOIFI governance standards and local code of CG in some countries. This mean IBs in these countries may be following local CG code more than AAOIFI governance, or because the AAOIFI governance

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isnot mandatory like other AAOIFI standards.So, IBs may only be following the AAOIFI mandatory standards such as accounting and auditing. Therefore, the AAOIFI organisation should critically discuss the importance of enforcing its standards in countries that mandatorily adopt the AAOIFI standards, through the regulatory body in each country.

The next point is the nature of democratic culture; most of the sample countries do not consider the importance of CG, which is a serious issue that should be studied in each country. This is because the political systems in these countries such as, Sudan and Bahrain do not encourage the disclosure of more information. Hence, the importance of CG, in general, and Sharia governance, in particular, in these countries should be critically debated by the central bank in each country and the government in relation to disclosure, accountability and transparency. Moreover, Sharia governance aims to comply with the role of Sharia and its principles, and ensure that there is fairness between all stakeholders. However, IBs should be open to disclosure and transparency and be compliant through AAOIFI governance, as the disclosed information is a part of the Sharia governance system. Therefore, IBs should consider the importance of disclosure to all stakeholders.

The consequences of critically evaluating the results found by this research means that the factors causing the low level of disclosure, must be investigated in relation to the AAOIFI governance disclosure of IBs, rather than immediately concluding that there is a low level of disclosure. Thus, it is fundamental to observe IBs’ disclosure practice and explore the perceptions of the directors of IBs regarding AAOIFI governance disclosure, which will be a major factor in attaining a conclusion to the findings.

8.4 Research Implications

Some theoretical and practical implications are made about AAOIFI governance disclosure in IBs. These implications can be summarised as follows:

8.4.1 Theoretical implications

The analysis provides support for the arguments relating to agency and signalling theory, which suggest that a large AC have better auditing performance standards than small AC (Fama, 1980; Spence, 1973). The outcomes showed a significant positive association between AAOIFI governance disclosure and ACs. The outcomes proved that the audit committee significantly affects the level of AAOIFI governance disclosure in IBs. Therefore, if there is a rise in the level of AAOIFI governance disclosure practice, IBs may have to increase their ACs.

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The outcomes of low-level CG disclosure in IBs are inconsistent with the accountability and stakeholder theories, as Gray et al., (1995) states that to be socially responsible agents they need to provide all financial or non-financial information, to their stakeholders. The results showed that IBs are still less interested in their AAOIFI governance disclosure practice, which may be because these standards are used voluntarily by IFIs (AAOIFI, website, 2017).

Concerning the result of the insignificant effect of AAOIFI governance disclosure on bank performance (measured using ROA and ROE ratios) – this outcome is disagreeing with the outcomes of several types of research that are based on agency theory scope (Al-Najjar, 2014; Alvarado and Bravo, 2017). These papers suggest a positive association between CG characteristics and bank performance. According to the findings, it demonstrates that AAOIFI governance disclosure did not afford any significant effect to IBs’ performance that is conflicting with the theoretical claim discussed in the current research. This result indicated that AAOIFI governance disclosure does not affect the bank performance, and this might be due to the fact that the aim of IBs is to ensure compliance with Sharia and also to support society. Moreover, IBs are more interested in being effective corporate citizens and accepting their social responsibility to help develop the community, rather than focusing on how to make a profit.

8.4.2 Practical implications

The current study provides some practical implications, as follows:

There are variations between disclosure practices in IBs’ annual reports. For these reasons, the policymakers and managers of the banks should provide more information in the annual reports for stakeholders. The result calls for more transparency in relation to AAOIFI governance, if banks want to be deemed extremely worthy in the eyes of their stakeholders.

This result showed that the disclosure of AAOIFI governance information was limited in the annual reports for the chosen IBs. Thusregulatory council and policymakers might identify the minimum level of AAOIFI governance that every bank should disclose in an annual report. Furthermore, this finding is significant for IBs, which may be aware that more AAOIFI governance disclosure might have an important impact on the image of the company. Moreover, policymakers should in the future, be more effective in supporting IBs, by introducing training workshops to explain the importance of AAOIFI governance to internal sharia review members, audit and governance members. It could also be helpful for the AAOIFI organisation to be cooperative and work extra closely with the central banks for the countries that adopt AAOIFI standards as mandatory, to ensure IBs in these countries are following the AAOIFI standards. The researchers might profit from this research since there are a few studies on AAOIFI governance. The research gives

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opportunities for further research in other IFIs by looking at the results and limitations of the current study.

The results shown in the current study can be useful for the role of the SSB in the IBs, because the SSB has the ability to review and confirm that all of the activities are completely compliant with Sharia rules. This means that the SSB could have the authority to prohibit and evaluate the banks’ guidance when necessary. Otherwise, the SSB should disclose AAOIFI governance information to the public. To do so, IBs will highlight their AAOIFI governance standards, and that, in turn, will increase their reputation and improve the faith of current clients and, as a consequence, engage with new investors and realise a higher level of trust from the public in IBs. This implication is

supported by the result of El-Halaby et al. (2018) which suggested that IBs should improve the level of disclosure to engage more clients, based on their faith and loyalty of following sharia compliance.