Corporate Governance and Shariah Non-compliance Risk: The Case of Islamic Banks in Indonesia

Abstract

This study aims to determine the effect of Good Corporate Governance on the sharia non-compliance risk at Islamic Commercial Banks in Indonesia registered with the OJK during the 2017-2020 period. The research sample was taken using a purposive sampling technique to produce 13 Islamic Commercial Banks registered with the OJK. The analytical method used in this study was logistic regression analysis. Based on the results of data analysis, simultaneously, all independent variables have a significant influence on the risk of sharia non-compliance. Partially, the size of the independent board of commissioners, the size of the board of commissioners, the size of the sharia supervisory board, the size of the audit committee and the frequency of meetings of the board of directors do not have a significant influence on the risk of sharia non-compliance. Meanwhile, the size of the Board of Directors, Frequency of Board of Commissioners Meetings, Frequency of Sharia Supervisory Board Meetings and Frequency of Audit Committee Meetings partially have a significant influence on the risk of sharia non-compliance.