Intellectual capital disclosure (ICD) in Islamic banks: does the diversity of Shariah committee matters?

Purpose - This study aims to investigate the moderating effects of the Shariah committee (SC) on the extent of intellectual capital disclosure (ICD) of Islamic banks. Design/methodology/approach - This study provides evidence from an analysis of a sample of Islamic banks in multiple countries over a seven-year period (2012-2018). The extent of intellectual capital information was measured and regressed against several corporate governance attributes covering board and audit committee characteristics, gender diversity of SC members and moderating variables of the SC, while controlling for firm-specific variables. A checklist was developed to measure the extent of the ICD of Islamic banks on a rubric scale ranging from 0 to 3. Findings - The results show that the size and gender diversity among SC significantly influence the ICD practices of Islamic banks. Apart from contributing to the literature, this study may serve as valuable input for Islamic banking practitioners including regulators and standard setters to empower women and use all their potential for better intellectual capital output. Practical implications - The paper highlights two main implications. Firstly, the regulator should look at the size and composition of the SC to enable a conducive environment for sound deliberation of Shariah matters. Secondly, the gender diversity among SC should be considered because women and man may have different approaches, and the best optimal combination of resources could enhance Islamic banks' competitive advantage. Originality/value - This study highlights the importance of gender diversity and size of SC in influencing the disclosure practices related to Shariah matters by the Islamic banks.