A Meta-analysis of the Relationship between Corporate Governance Mechanisms and Financial Performance in Islamic Banks

* Mohammad Baqer Shirmehanji / M.A. in Islamic Economics, 'Allameh Tabataba'i University        m_shirmehenji@atu.ac.ir
Mohammad Javad Nourahmadi / Assistant Professor, Department of Theoretical Economics, 'Allameh Tabataba'i University    mjnourahmadi@atu.ac.ir‬
Mohammad Ismail Tavassoli / Associate Professor, Department of Islamic Economics, 'Allameh Tabataba'i University    metavassoli@atu.ac.ir
Received: 2021/05/03 - Accepted: 2021/09/11

Abstract
The relationship between corporate governance mechanisms and the financial performance of Islamic banks has been extensively studied in previous empirical research. However, the results differ mainly due to the heterogeneity of the samples used in the experimental research. To explain and draw conclusions from these different results, this paper presents the results of meta-analysis of existing studies on the relationship between the five mechanisms of corporate governance and financial performance of Islamic banks. Independence of board members, number of board members, sharia oversight board, dual role of director and audit committee. Reviewing the content and results of individual studies based on the meta-analysis protocol, seventeen studies were excluded for selection analysis and studies that did not fit the protocol, or whose information was not sufficient to extract data. Extracting and coding, the quantitative results of seventeen studies were used to combine the results. The results of combining and concluding studies show that Islamic banks will have better financial performance if they have 1) more proportion of independent managers in the board of directors 2) larger sharia supervisory board 3) more board members 4) dual role of the CEO 5) and the audit committee. 

Keywords: Corporate governance, Financial performance, Islamic banks, Meta-analysis approach.

JEL Classification: G34, L25, Z12