Effectiveness of board of directors and risk-taking: the mediating role of Shari’ah supervisory board of Bangladesh Islamic financial institutions

What is it about?

The characteristics of BoD and SSB are considered dual board systems in Islamic Banks (IB), which have become vastly popular due to their safe and complete package of Islamic finance. The proper practices of this board lead to reduced classified investment and operational complexity. This study aims to assess the effectiveness of the Shari’ah Supervisory Board (SSB) and its impact on risk-taking in the presence of a strong and effective Board of Directors (BoD) among Islamic Banks (IB) in Bangladesh. The results indicated that the indices of BoD and SSB negatively influence each other's credit risk, particularly in the Southeast Asian context, focusing on IB in Bangladesh. Additionally, the SSB mediated risk-taking positively when coupled with a strong BoD

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