Review of Corporate Finance > Vol 1 > Issue 1-2

Strong Boards and Risk-taking in Islamic Banks

Sabur Mollah, Sheffield University Management School, UK, , Michael Skully, Monash University, Australia, , Eva Liljeblom, Hanken School of Economics, Finland and Lund University, Sweden,
Suggested Citation
Sabur Mollah, Michael Skully and Eva Liljeblom (2021), "Strong Boards and Risk-taking in Islamic Banks", Review of Corporate Finance: Vol. 1: No. 1-2, pp 135-180.

Publication Date: 29 Apr 2021
© 2021 S. Mollah, M. Skully and E. Liljeblom
Corporate finance
Strong boardSSBreligiosityrisk-takingIslamic banksconventional banks


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In this article:
1. Introduction 
2. Theory and Hypotheses Development 
3. Data and Method 
4. Empirical Results 
5. Conclusion 


This paper examines whether variations in strong boards explain the differences between risk-taking in Islamic and conventional banks. From an analysis of a pooled sample of Islamic and conventional banks, we find that strong boards in general serve their shareholders through engaging in higher risk-taking activities across both types of banks. In Islamic banks, however, the Shari’ah Supervisory Board (SSB) is found to mitigate risk-taking when integrated with a strong board, as religiosity restrains risk-taking.