Sharia supervisory board characteristics and sustainability performance in Islamic finance companies of Indonesia: beneficiary or just complementary?

Purpose This study examines how distinct Sharia Supervisory Board (SSB) attributes relate to sustainability performance for Islamic Finance Companies (IFCs) in Indonesia. Design/methodology/approach A purposive sampling method was used to select 61 IFCs from 115 financial companies listed on the Indonesia Stock Exchange in 2017–2022. The data set was hand-collected, resulting in an unbalanced panel sample with 357 observations. SP was measured by the number of sustainability awards received by the IFCs. SSB characteristics were assessed through SSB profiles. Ordinary Least Squares (OLS) regression, including robustness and endogeneity tests, was applied. Additional analyses were also conducted. Findings SSB expertise is significantly associated with higher SP in IFCs and Islamic Banks (IBs). SSB education shows a stronger association with SP in Islamic Financial Institutions (IFIs). Additionally, SSB experience is positively related to financial performance in further analyses. Research limitations/implications This study is limited by the subjective nature of the content analysis measurements and the small sample size of IFCs in Indonesia. It also does not focus on other potentially relevant variables. Future research could use different measures, select additional variables and expand to other Islamic countries. Practical implications IFCs, and especially IBs, gain from varied SSB expertise, while IFIs benefit more from advanced SSB education. SSB experience also strengthens IFC financial outcomes. Originality/value This study pioneers the use of awards as a metric for SP, offering novel insights into the influence of sustainability standards bodies with more practical indicators.