THE ROLE OF GOOD CORPORATE GOVERNANCE IN ENCOURAGING COMPLIANCE IN SHARIA-BASED COMPANIES: A SYSTEMATIC LITERATURE REVIEW

Putri Wahyuni

Abstract


This study explores the relationship between Good Corporate Governance (GCG) and Shariah compliance in Shariah-based companies through a Systematic Literature Review (SLR) approach. Data were retrieved from five major datasets with relevant articles, which were filtered by publication year (2010-2023) using PRISMA protocol. The analysis identified three main dimensions of GCG in Islamic companies: the role of the Shariah Supervisory Board (DPS), Islamic financial transparency and reporting, and board independence. Key indicators of Shariah compliance include adherence to international standards (AAOIFI and IFSB), as well as the elimination of riba and gharar elements in the company's operations. The study also highlights best practices from Islamic companies, such as Bank Islam Malaysia Berhad (BIMB) and Dubai Islamic Bank (DIB), which demonstrate the integration of modern governance with the principles of Islamic law. In addition, the study notes the challenges faced, especially in countries with dualistic legal systems. The theoretical implications of this research include the development of a relationship model of GCG and sharia compliance, while the practical implications offer recommendations to corporate managers and regulators to improve sharia-based corporate governance. This research provides insights for the development of more effective and integrative governance policies.

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References


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DOI: https://doi.org/10.3059/insis.v0i0.23592

DOI (PDF): https://doi.org/10.3059/insis.v0i0.23592.g12942

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