Corporate Social Responsibility Practices of Malaysian Islamic Banks from the Shariah Perspective: A Focus on the Key Dimensions

Faizah Darus; Haslinda Yusoff; Dayang Milianna Abang Naim; Azlan Amran; Hasan Fauzi

doi:10.7187/GJATSI2018-03

Authors

Faizah Darus Accounting Research Institute, Universiti Teknologi MARA, 40450 Shah Alam, Selangor, Malaysia
Haslinda Yusoff Faculty of Accountancy, Universiti Teknologi MARA, 40450 Shah Alam, Selangor, Malaysia
Dayang Milianna Abang Naim Faculty of Accountancy, Universiti Teknologi MARA, 94300 Kota Samarahan, Sarawak, Malaysia
Azlan Amran School of Management, Universiti Sains Malaysia, 11800 Gelugor, Penang, Malaysia
Hasan Fauzi Indonesian Center for Social and Environmental Accounting Research and Development Faculty of Economics and Business Sebelas Maret University, Jawa Tengah 57126, Indonesia

DOI:

https://doi.org/10.7187/GJATSI2018-03

Keywords:

Corporate Social Responsibility, Disclosure, Malaysia, Islamic banks, Shariah

Abstract

This study examines the corporate social responsibility (CSR) disclosure practices of Islamic banks in a developing economy, i.e., Malaysia. Specifically, the study focuses on all three full-fledged Islamic commercial banks over the years 2004–2010 and constructs a CSR Disclosure Index to score the disclosure level of the banks. The findings reveal that Bank Islam has a higher disclosure practice than other banks since 2006. Disclosures on dimensions such as corporate vision, employment, and product are found to be strong, while disclosures on environmentally related information tend to be weak. Generally, the Islamic banks studied indicate that their CSR disclosure practices have low compliance with the Shariah principles, a clear sign that there is a need for more dynamic enhancement in the practice. Such an effort is deemed crucial for the banks to retain their credibility and reputation as Islamic business organizations.

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