Social responsibility reporting of Islamic banks: Evidence from Indonesia

Faizah Darus*, Hasan Fauzi, Yadi Purwanto, Haslinda Yusoff, Azlan Amran, Mustaffa Mohamed Zain, Dayang Milianna Abang Naim, Mehran Nejati

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)

Abstract

There is a growing global interest in social responsibility and sustainability across all sectors. Other than economic performance, stakeholders are now also concerned about the social and environmental impacts of corporations. Additionally, stakeholders are obtaining a higher salience level and expect organisations to operate sustainably. The banking sector has not been an exception, as banks can have significant impact on their customers, employees, and society in various ways. Given the intertwined links of Islam and ethical principles, it is expected that Islamic banks will show a high level of commitment towards social responsibility (SR) and ethical practices. The current study investigates this issue by examining the annual reports of three fully-fledged Islamic commercial banks in Indonesia over the period of 2007 to 2011. It was found that only two of the investigated banks had continuous improvement in their SR disclosure. Additionally, it was revealed that the highest disclosures have been for 'corporate vision' and 'board of directors and top management', while the lowest disclosures were evident for 'environment' and 'product, services and fair dealing with supply chain'.

Original languageEnglish
Pages (from-to)356-380
Number of pages25
JournalInternational Journal of Business Governance and Ethics
Volume9
Issue number4
DOIs
Publication statusPublished - Jan 1 2014
Externally publishedYes

Keywords

  • Annual reports
  • Indonesia
  • Islamic banks
  • Social reporting
  • Social responsibility

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Organizational Behavior and Human Resource Management

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