Maqashid Shariah Performance on Indonesian Islamic Banking: The Role of Intellectual Capital and Shariah Supervisory Board Reputation and Tenure

Abstract

This study aims to examine the Maqashid Shariah Performance of Islamic banks in Indonesia by considering the influence of Intellectual Capital (IC) and aspects of the Shariah Supervisory Board (SSB), namely SSB reputation and SSB tenure. This study uses a sample of Islamic banks registered with the Financial Services Authority with a sample of 14 Islamic banks during the period 2008-2020. This research uses panel data regression model analysis. The analytical techniques used in this study are statistical tests, preliminary tests (Breusch-Pagan, likelihood test, Hausman test), diagnostic tests (heteroscedasticity test and autocorrelation test), and hypothesis testing. Based on the results of the three preliminary tests in determining the panel data regression model, this study will use a fixed effect model to examine the relationship between variables in regression models one and two. The results of this study reveal that intellectual capital has a positive impact on the Maqashid Shariah Performance of Islamic banks in Indonesia, this indicates that greater utilization of intellectual capital leads to an increase in the Maqashid Shariah Performance. The SSB Reputation variable negatively affects Maqashid Shariah Performance, this happens because there are many SSB who have positions on the National Standards Board (DSN) which can reduce focus so that the performance of SSB members cannot be implemented optimally, therefore it can reduce Maqashid Shariah Performance. In addition, the tenor of SSB does not affect the performance of Islamic maqashid Islamic banks in Indonesia, because the results of this study indicate that the average tenor of SSB is 5-6 years in Islamic banks. Where this proves that there is no influence of the length of time or not the term of office of the SSB on the performance of Islamic banks because the experience gained is not only in Islamic banks themselves. In addition, the longer the term of office spent as a member of the SSB, the higher the company's performance because the SSB feels more experienced and has prospects within the company. This study could not prove the moderating role of the reputation and tenure of the Shariah Supervisory Board in strengthening the relationship between intellectual capital variables and Maqashid Shariah Performance.