Corporate Governance, Integrated Reporting, and Bank’s Performance: An Empirical Estimation for Islamic Banks

Abstract

This study evaluates the impact of adaptation of the International Integrated Reporting Council’s (IIRC) Framework on the performance of the Islamic Banks around the world between 2011 and 2020. The motivation for this study resides in the existing literature that showed conflicting results regarding the relationship between the firms’ performance and the adaption of the integrated reporting practices. Since the integrated reporting is not a much old concept, being the first IIRC Framework initiated in 2013, its level of adaptation by the Islamic Banks is a point of interest. This study considered 100 Islamic banks listed around the world, only 12 of them have started to publish Integrated Reports. 20 banks were sampled and then categorized as IR-Compliant and Non-IRCompliant banks. Content analysis was done using an Integrated Reporting Score (IRS) index and Corporate Governance Score (CGS) index. Return on Equity (ROE) and, After- Tax Income (ATI) were used as dependent variables and a proxy to determine the performance of Islamic Banks. It was found that, unlike CGS, IRS does not impact the performance of the Islamic Banks in the short run, and hence it is recommended that the practice should be studied in the long run considering only the firms adopting the IIRC Framework.