Market Values of Islamic Banks and Ethical Identity

Rashid, M. and Hassan, M.K. (2014). Market Value of Islamic Banks and Ethical Identity. American Journal of Islamic Social Sciences, Vol. 31, No.2, pp.43-79.

43 Pages Posted: 1 Nov 2018

See all articles by Mamunur Rashid

Mamunur Rashid

University of Brunei Darussalam - UBD School of Business and Economics; Nottingham University Business School Malaysia Campus

M. Kabir Hassan

University of New Orleans - College of Business Administration - Department of Economics and Finance

Date Written: 2014

Abstract

Ethical identity briefly refers to the collection of guidelines that promote ethical practices within and by the organization. The concept of ethical identity is embedded in the Islamic teaching. This study examine the ethical identity of Islamic banks in Bangladesh, Malaysia and Arab gulf states under eight distinctive dimensions to explore the difference between ideal and communicated ethical conducts via annual reports. Banks in the Gulf Region maintained a high standard of reporting in all dimensions; however, performed poorly in information disclosure regarding board of directors and top management, and commitments towards debtors. Banks in Bangladesh did not clearly indicate the status and role of board of directors and top management. Ethical identity has not been properly understood by the Banks in Malaysia; even though, banks in this region consistently reported few ethical identity issues rather clearly. Among the best and the worst performers according to their respective Ethical Identity Index (EII), Shamil Bank and Al-Rajhi Bank became the best and the worst bank respectively in the Gulf Region. Islami Bank Bangladesh Limited topped the list in Bangladesh. Based on our findings, commitments towards society, clarity in mission and vision statements and updated role and attributes regarding Shariah Supervisory Boards (SSB) were the areas of limited reporting. The findings of the study reveal an immediate appeal to develop ethical identity disclosure requirements for Islamic banks. Other areas of special importance include focused social and developmental goals, putting Islmaic Shariah strategically in the mission and vision statements, enhanced employee welfare policy and effective Shariah monitoring over banking operation.

Keywords: Ethical Norms, Content Analysis, Islamic banks, Disclosure and Reputation

JEL Classification: P4, G2, G3

Suggested Citation

Rashid, Mamunur and Hassan, M. Kabir, Market Values of Islamic Banks and Ethical Identity (2014). Rashid, M. and Hassan, M.K. (2014). Market Value of Islamic Banks and Ethical Identity. American Journal of Islamic Social Sciences, Vol. 31, No.2, pp.43-79., Available at SSRN: https://ssrn.com/abstract=3263284

Mamunur Rashid

University of Brunei Darussalam - UBD School of Business and Economics ( email )

Jalan Tungku Link
Gadong
Bandar Seri Begawan, BE1410
Brunei

Nottingham University Business School Malaysia Campus ( email )

Jalan Broga
Semenyih, Selangor 43500
Malaysia

HOME PAGE: http://www.nottingham.edu.my/Business/People/Mamunur.Rashid

M. Kabir Hassan (Contact Author)

University of New Orleans - College of Business Administration - Department of Economics and Finance ( email )

2000 Lakeshore Drive
New Orleans, LA 70148
United States

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