The Role of Islamic Work Ethics on the Relationship between Board of Directors and Performance of Islamic Financial Institutions in Nigeria: A Proposed Framework

International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue VII, July 2019 | ISSN 2454–6186

The Role of Islamic Work Ethics on the Relationship between Board of Directors and Performance of Islamic Financial Institutions in Nigeria: A Proposed Framework

Sa’adatu Balarabe Adam

 PhD Scholar, Islamic Business School, Universiti Utara Malaysia, 06010Sintok, Kedah, Malaysia

Abstract: Even though, Islamic banks are considered instrumental to financial inclusion and economic growth, yet the input of Islamic banks in Nigeria displays an unimpressive performance. Furthermore, the practice of Islamic Finance is globally being regarded as not only existing as alternative for Muslims but fundamental financial practices around the world. Previous studies reveal limited theoretical contributions in the area in Nigerian context. As such, the need for more studies on the performance of Islamic banks in the context of Board of Directors, especially in Nigeria, where Islamic banks are viewd as appropriate financial institutions to the Muslims. In addition, studies in Nigeria revealed weak supervisory framework for the Islamic bank industry. Against this backdrop, poor Islamic Work Ethics occupies a fundamental position for the low performance of Nigerian Islamic banks. The paper presents a theoretical framework on the moderating role of Islamic Work Ethics on the relationship between Board of Directorsand the performance of Islamic banks in Nigeria. If validated, the model would have policy implications to Islamic banks and other stakeholders in decision making.

Keywords: Board of Directors; Islamic Banks; Performance; Islamic Work Ethics

I. INTRODUCTION

This paper presents a theoretical framework on the impact of Board of Directors on the performance of Islamic Banks (IBs) in Nigeria with the moderating role of Islamic work ethics. Performance of financial institutions comprises economic and financial activities that facilitate competitive advantage and economic development. Islamic financial institutions operated to provide suitable financial contracts religiously (Malkawi, 2014). The recent growth and development in the industry globally make it the fastest growing sector. This is due to the financial crisis of 2008-09 that led to increased growth in Islamic finance by 17% averagely (Ernst, 2016). Moreover, it resulted in the spread of Islamic financial institutions to Asia, Middle East, Europe, United Kingdom, North America and African region including Nigeria (Lawal, 2010; Fatai,2012; Al-Shamrani, 2014; Hussain, Shahmoradi, & Turk, 2016).

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