Do Shariah Committee Features Shape Financial Outcomes of Islamic Banks in Malaysia?

HRMARS - The Shariah Committee (SC) constitutes a critical element of the corporate governance framework within Islamic financial institutions. This study investigates how various features of the Shariah Committee shape the financial outcomes of Islamic banks in Malaysia, using Agency Theory as the conceptual lens. Utilizing regression models on data from 15 Islamic banks in Malaysia between 2019 and 2023, the study finds that only the frequency of Shariah Committee meetings is positively and significantly associated with financial outcomes. In contrast, committee size, the number of members with doctoral degrees, and committee remuneration do not show significant effects. The results offer dual contributions: theoretically, they enrich the discourse on Shariah governance effectiveness; practically, they provide evidence-based guidance for practitioners regarding the most impactful Shariah features. Nevertheless, the research has limitations as it considers only Return on Asset and Return on Equity as performance metrics.