The Significance of Corporate Social Responsibility Disclosure to Islamic Banks in Malaysia: An Islamic View
DOI:
https://doi.org/10.31436/jif.v7i1.227Abstract
Corporate social responsibility disclosure (CSRD) is imperative for an institution as it assists decision makers in making economic decisions. However, for Islamic institutions like Islamic banks, these objectives are secondary. For Islamic banks, to show their compliance with Shari’ah is the main objective of their CSRD that overrules other objectives. Nevertheless, there is no special framework on corporate social responsibility (CSR) for Islamic financial institutions in Malaysia especially Islamic banks thus far to guide them on what should be disclosed in their annual reports although Malaysia is one of the leading global hub for Islamic finance. Hence, the purpose of this study is to determine the significance of CSRD to Islamic banks in Malaysia from an Islamic view. This study is based on primary Shari’ah sources i.e. al-Qur’an and al-Sunnah, and secondary Shari’ah sources. It was found that, it is obligatory for all Islamic banks in Malaysia to disclose their CSR activities and initiatives through a right and common platform, which is CSRD. Therefore, a special CSR framework is required to guide Islamic banks in Malaysia disclose their CSR activities or initiatives systematically and perfectly
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References
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Muwazir, M. R., Muhamad, R. & Noordin, K. (2006). Corporate social responsibility disclosure: A tawhidic approach. Jurnal Syariah, 14(1), 125-142.
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Mohd Ariffin, N., Archer, S., & Karim, R. A. A. (2007). Transparency and market discipline in Islamic banks. In M.
Iqbal, S. S. Ali & D. Muljawan (Eds.), Advances in Islamic economics and finance - Proceedings of 6th International Conference on Islamic Economics and Finance (Vol. 1, pp. 153-173). Jeddah Islamic Research and Training Institute (IRTI).
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Putrajaya Committee on GLC High Performance. (2006). The Silver Book: Achieving value through social responsibility. Kuala Lumpur: Putrajaya Committee on GLC High Performance.
Mohd, P., Atan, R. & Zainon, S. (2007). Corporate attention to social responsibility disclosures: A study of Malaysian companies. In M. N. Mohd Ali, M. R. Mohd Ishak, N. Y. Mohd Yusof & M. Y. Yusoff (Eds.), Corporate social responsibility: Our first look (pp. 88-106). Kuala Lumpur: Malaysian Institute of Integrity.
Arshad, R. Othman, S. & Othman, R. (2012). Islamic corporate social responsibility, corporate reputation and performance. World Academy of Science, Engineering and Technology, 64, 1070-1074.
Masruki, R., Ibrahim, N. & Azlinna Azizan, N. A. (December 2010). Incorporating corporate social responsibility (CSR) into sustainable financial performance of Islamic banks in Malaysia. Paper presented at the 2nd Langkawi Islamic Finance and Economics International Conference (LIFE 2010), Langkawi, Malaysia.
Smith, J. V. d. L., Adhikari, A., & Tondkar, R. H. (2005). Exploring differences in social disclosures internationally: A stakeholder perspective. Journal of Accounting and Public Policy, 24(2), 123-151.
Steiner, J. F., & Steiner, G. A. (2009). Business, government and society: A managerial perspective (12th ed.). New York: McGraw-Hill.
Othman, S. (2009). Corporate responsibility disclosure and corporate reputation: Are they converging? In R. Arshad, F. Darus, S. Othman, M. Mohamed Zain & T. K. Luan (Eds.), Corporate responsibility: Concepts and emerging issues (pp. 3-32). Shah Alam: University Publication Centre (UPENA), UiTM.
Warde, I. (2000). Islamic finance in the global economy. Edinburgh: Edinburgh University Press.
Williams, C. A. (1999). The securities and exchange commission and corporate social transparency. Harvard Law Review, 112, 1197-1311.
Ahmad, A. (2000). Economic development in Islamic perspective revisited. Review of Islamic Economics, 9, 83-102.
Al-Bukhari, Abu ‘Abd Allah Muhammad ibn Isma‘il. (1999). Sahih al-Bukhari. (2nd edn.) Al-RiyaÌh: Dar al-Salam li al-Nashr wa al-Tawzi‘.
Al-Maghribi, ‘Abd al-Hamid ‘Abd al-Fattah. (1996). Al-Mas’uliyyah al-ijtima‘iyyah li al-bunuk al-Islamiyyah. Al-Qahirah: Al-Ma‘had al-‘Alami li al-Fikri al-Islami.
Aribi, Z. A., & Gao, S. (2010). Corporate social responsibility disclosure: A comparison between Islamic and conventional financial institutions. Journal of Financial Reporting and Accounting, 8(2), 72-91.
Marsidi, A., & Abdul Rahman, A. R. (2012, 19 - 21 November 2012). Development and analysis of the Islamic financial and social reporting (IFSR) of Islamic banks in Malaysia. Paper presented at the International Islamic Accounting and Finance Conference (IIAFC) 2012, Istana Hotel, Kuala Lumpur.
Abdul Rahman, A., Md. Hashim, M. F. A. & Abu Bakar, F. (2010). Corporate social reporting: A preliminary study of
Bank Islam Malaysia Berhad (BIMB). Issues in Social & Environmental Accounting, 4(1), 18-39.
Baydoun, N., & Willet, R. (1997). Islam and accounting: Ethical issues in the presentation of financial information. Accounting, Commerce and Finance: The Islamic Perspective, 1(1), 1-25.
Bukair A. A. & Abdul Rahman A. (2015). Effect of characteristics of board of directors on corporate social responsibility disclosure by Islamic banks: Evidence from Gulf cooperation council countries. In H A El-Karanshawy et al. (Eds.), Ethics, governance and regulation in Islamic finance (Vol. 4, pp. 59-72). Doha, Qatar: Bloomsbury Qatar Foundation.
Bursa Malaysia. (2012). Corporate social responsibility (CSR) framework for Malaysian public listed companies. Retrieved 1 January 2012, 2012, from http://www.bursamalaysia.com/website/bm/about_us/the_organisation/csr/downloads/csr_writeup.pdf
Bursa Malaysia. (2014, 2 January 2014). Continuing disclosure. listing requirements. Retrieved 27 October 2014, from http://www.bursamalaysia.com/misc/system/assets/5949/regulation_rules_main_market_bm_mainchapter9.pdf
Farook, S. (2007). On Corporate Social Responsibility of Islamic Financial Institutions. Islamic Economic Studies, 15(1), 31-46.
Abdul Hamid, F. Z., Fadzil, F. H., Ismail, M. S. & Syed Ismail, S. S. (2007). CSR and legitimacy strategy by Malaysian companies. In M. N. Mohd Ali, M. R. Mohd Ishak, N. Y. Mohd Yusof & M. Y. Yusoff (Eds.), Corporate social responsibility: Our first look (pp. 14-35). Kuala Lumpur: Malaysian Institute of Integrity.
Frederick, W. C., Post, J. E., & Davis, K. (1992). Business and society: Corporate strategy, public policy, ethics (7th ed.). New York: McGraw Hill.
Global Reporting Initiative. (2013). About GRI Retrieved 8 May 2013, from https://www.globalreporting.org/Information/about-gri/Pages/default.aspx
Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting: A review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing & Accountability Journal, 8(2), 47-77.
Hamid, T. (2016). Corporate social responsibility practices and disclosures of non-bank financial institutions in Bangladesh. The Cost and Management 44(1), 29-35.
Haniffa R. (2002) Social responsibility disclosure: An Islamic perspective. Indonesian Management and Accounting Research. 1(2):128–146.
Haron, H., Ismail,, I. & Yahya, S. (2007). Factors influencing corporate social disclosure practices in Malaysia. In M. N. Mohd Ali, M. R. Mohd Ishak, N. Y. Mohd Yusof & M. Y. Yusoff (Eds.), Corporate social responsibility: Our first look (pp. 58-87). Kuala Lumpur: Malaysian Institute of Integrity.
Hassan, A., & Harahap, S. S. (2010). Exploring Corporate Social Responsibility Disclosure: The Case of Islamic Banks. International Journal and Middle Eastern Finance and Management, 3(3), 203-227.
Ibn Majah, A.A.M. (2002). Sunan Ibn Majah. (Vol.3, Book 12). Bayrut: Dar al-Kutub al-‘Ilmiyyah.
Iqbal, M., & Molyneux, P. (2005). Thirty years of Islamic banking: History, performance and prospects. New York: Palgrave Macmillan.
Kok, T. K. (2007). Corporate social reporting: Development and issues. In M. N. Mohd Ali, M. R. Mohd Ishak, N. Y. Mohd Yusof & M. Y. Yusoff (Eds.), Corporate social responsibility: Our first look (pp. 44-57). Kuala Lumpur: Malaysian Institute of Integrity.
Lewis, M. K., & Algoud, L. M. (2001). Islamic banking. Chelteham, UK and Northampton, USA: Edward Elgar.
Maali, B., Casson, P., & Napier, C. (2006). Social reporting by Islamic banks. Abacus, 42(2), 266-289.
McAlister, D. T., Ferrel, O. C., & Ferrel, L. (2005). Business and Society: A Strategic Approach to Social Responsibility. Boston: Houghton Mifflin Company.
Muwazir, M. R., Muhamad, R. & Noordin, K. (2006). Corporate social responsibility disclosure: A tawhidic approach. Jurnal Syariah, 14(1), 125-142.
Mohamed Zain, M. (2009). Corporate Social Responsibility Issues: Embracing Sustainability. In R. Arshad, F. Darus, S. Othman, M. Mohamed Zain & T. K. Luan (Eds.), Corporate responsibility: Concepts and emerging issues (pp. 75-95). Shah Alam: University Publication Centre (UPENA), UiTM.
Mohamed Zain, M. & Mohammad, R. (2007). CSR in Malaysia: The dawn of a new beginning. In D. Crowther & M. M. Zain (Eds.), New perspectives on corporate social responsibility (pp. 1-20). Shah Alam: University Publication Centre (UPENA), UiTM.
Mohamed Zain, M., Mohammad, R. & Ibrahim, M. K. (2006). Corporate social responsibility disclosure in Malaysia. Shah Alam: UPENA, UiTM.
Nobanee, H., & Ellili, N. (2016). Corporate sustainability disclosure in annual reports: Evidence from UAE banks: Islamic versus conventional. Renewable and Sustainable Energy Reviews, 55, 1336-1341.
Mohd Ariffin, N., Archer, S., & Karim, R. A. A. (2007). Transparency and market discipline in Islamic banks. In M.
Iqbal, S. S. Ali & D. Muljawan (Eds.), Advances in Islamic economics and finance - Proceedings of 6th International Conference on Islamic Economics and Finance (Vol. 1, pp. 153-173). Jeddah Islamic Research and Training Institute (IRTI).
Perrini, F. (2006). The practitioner's perspective on non-financial reporting. California Management Review, 48(2), 73-103.
Putrajaya Committee on GLC High Performance. (2006). The Silver Book: Achieving value through social responsibility. Kuala Lumpur: Putrajaya Committee on GLC High Performance.
Mohd, P., Atan, R. & Zainon, S. (2007). Corporate attention to social responsibility disclosures: A study of Malaysian companies. In M. N. Mohd Ali, M. R. Mohd Ishak, N. Y. Mohd Yusof & M. Y. Yusoff (Eds.), Corporate social responsibility: Our first look (pp. 88-106). Kuala Lumpur: Malaysian Institute of Integrity.
Arshad, R. Othman, S. & Othman, R. (2012). Islamic corporate social responsibility, corporate reputation and performance. World Academy of Science, Engineering and Technology, 64, 1070-1074.
Masruki, R., Ibrahim, N. & Azlinna Azizan, N. A. (December 2010). Incorporating corporate social responsibility (CSR) into sustainable financial performance of Islamic banks in Malaysia. Paper presented at the 2nd Langkawi Islamic Finance and Economics International Conference (LIFE 2010), Langkawi, Malaysia.
Smith, J. V. d. L., Adhikari, A., & Tondkar, R. H. (2005). Exploring differences in social disclosures internationally: A stakeholder perspective. Journal of Accounting and Public Policy, 24(2), 123-151.
Steiner, J. F., & Steiner, G. A. (2009). Business, government and society: A managerial perspective (12th ed.). New York: McGraw-Hill.
Othman, S. (2009). Corporate responsibility disclosure and corporate reputation: Are they converging? In R. Arshad, F. Darus, S. Othman, M. Mohamed Zain & T. K. Luan (Eds.), Corporate responsibility: Concepts and emerging issues (pp. 3-32). Shah Alam: University Publication Centre (UPENA), UiTM.
Warde, I. (2000). Islamic finance in the global economy. Edinburgh: Edinburgh University Press.
Williams, C. A. (1999). The securities and exchange commission and corporate social transparency. Harvard Law Review, 112, 1197-1311.
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Published
2018-06-04
How to Cite
Wan Jusoh, W. N. H., & Ibrahim, U. (2018). The Significance of Corporate Social Responsibility Disclosure to Islamic Banks in Malaysia: An Islamic View. Journal of Islamic Finance, 7(1), 001–008. https://doi.org/10.31436/jif.v7i1.227
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