This paper aims to investigate Islamic banking performance based on higher ethical objectives enshrined within Sharī‘ah (Islamic legal rulings); namely, Maqāṣid al-Sharī‘ah. First, we examine the importance of both ethical and social concerns on bank performance in general. Second, we analyse the ethical and social performance of Islamic banks (IBs) based on the Maqāṣid al-Sharī‘ah Index (MSI) that emphasises disclosures related to education, social justice, and redistribution of wealth. Third, we investigate how far IBs have gone towards achieving Maqāṣid al-Sharī‘ah goals during the last decade, post-global financial crises (GFC) period, with a particular focus on Indonesia as a case study. Hence, testing whether IBs achieve socio-economic justice and attain best practice by securing social good. The selected banks’ annual reports were examined, applying content analysis to obtain the necessary data, using the Simple Additive Weighting (SAW) method to determine the level of Maqāṣid in the sample. Empirical evidence suggests that conventional performance measurements do not truly reflect IBs’ higher ethical objectives, and create a deficiency of attaining Maqāṣid al-Sharī‘ah performance in these banks. This research extends the previous literature on evaluating the performance of IBs beyond the financial return, which includes their ethical and social identity based on the Maqāṣid al-Sharī‘ah scale, especially the post-GFC period. The result also reveals that there is a financial cost to achieving the Maqāṣid al-Sharī‘ah, as IBs that achieved high MSI scores have sacrificed financially. This supports the findings of the literature that IBs prefer financial returns over their ethical and social impact.

The aim of the present study was first to consider the impact of COVID-19 on Kuwait’s economy. Second, it attempted to examine the role of Islamic banking and finance in achieving socioeconomic justice and attaining best practices by securing social goods. Hence, the research assessed how Islamic banking and finance can help in reconstructing the economy based on Maqasid Al-Shari’ah (higher ethical objectives) to redevelop social, economic, and environmental welfare, especially in the COVID-19 era. A theoretical approach was adopted, namely, the grounded theory method (GTM), to explore COVID-19 related solutions for achieving sustainable economic development. The findings show that Islamic banking and finance can be employed to mitigate the impact of coronavirus and can be used as an alternative financial system to support both affected people and entrepreneurs. The paper expands on previous literature discussing the role of Islamic finance in management strategies through Islamic ethical objectives, with a particular focus on Kuwait’s post-COVID-19 era. This research can help policymakers to develop mechanisms and supporting approaches for Kuwait’s economy.

This paper explores the student learning experience using technology as an e-learning tool during the COVID-19 pandemic. This article utilized qualitative methods to examine the quality of student learning using deep and surface approaches to understand what influences student engagement with technology. Interviews were conducted with 21 students from various academic majors using deductive content analysis to evaluate their responses. The findings show that technology increased student engagement with class discussion, and students became more informed about lecture material. It is noteworthy that there were some variations in the students’ interpretation of the learning experience with technology, indicating a gap in the quality of learning. Notably, there was an improvement in grades compared to the last online session and the face-to-face learning experience prior to the COVID-19 pandemic, and there were fewer missing quizzes and late assignments. These outcomes may be used to enhance teaching strategies and problem solving within teaching and learning to develop a new mode of delivery. In addition, these findings are important for the future of education in a post-pandemic world.

Purpose: The purpose of this paper is to show how the choice and ongoing evaluation of a firm’s business model, as a matter of strategic guidance, are key aspects of corporate governance (CG), with particular reference to risk management (RM) in Islamic banks. Design/methodology/approach: This research uses a case study approach, with a single case, which was chosen as it fits very well the purpose of this research. The data collection was based largely on documentary evidence. Company data were collected from company annual reports, press releases and legitimate web sites. The ORBIS Bank Focus database was also used to produce a comparative financial analysis. Findings: The study findings illustrate how an apparently successful business model may fail due to an inherent instability that could have been identified through the application of careful risk analysis (including stress testing) in the choice and ongoing evaluation of the business model, which robust CG and strategic guidance require. In particular, Arcapita’s problems illustrate the dangers to Islamic financial institutions (IFI) from business models that involve undue exposure to liquidity risk. Practical implications: The issues raised in the paper are important in that Islamic banking and finance is an integral part of the global banking and finance industry. Investors and regulators are now requesting corporate management to provide improved service to shareholders and other stakeholders alike. IFI rely on the confidence of investors and market participants, just like conventional institutions and when this confidence erodes, it may prove difficult to regain. Social implications: The global credit crisis of 2008 caused significant difficulties to firms, especially financial institutions, even with substantial government intervention in the economy, which raised some issues of CG and ethics. Originality/value: This paper extends the knowledge of the potential effects of weaknesses in CG and RM, with specific reference to strategic guidance in the choice and ongoing evaluation of a firm’s business model, especially in relation to the Islamic banking sector. It also provides a telling illustration of the need for the enhancements of the Basel Committee’s prudential requirements set out in the various Basel III documents.

Purpose: The purpose of this paper is to examine the practices of Islamic banks in managing the so-called profit sharing investment accounts (PSIA) which they offer as a Shari’ah-compliant alternative to interest-bearing deposit accounts using an unrestricted Mudarabah contract. In particular, the paper aims to examine the risk-return characteristics of such accounts and to compare these to the returns and risks of shareholders in the same banks. It is relevant that PSIA holders (unrestricted investment account holders – UIAH) are exposed to losses on the assets in which their deposits are invested, while the bank as asset manager (Mudarib) does not bear these losses and as Mudarib typically receives more than 50 per cent of the profits earned on the PSIA. The issue is whether the UIAH are being treated equitably. The influence of a set of corporate governance variables on this issue was also analyzed. Design/methodology/approach: A sample of 28 Islamic banks was selected from five countries for the period 2002-2013, with data being obtained from Bankscope and Bloomberg and, where necessary, from the banks’ annual reports. First, the risk-return characteristics of the UIAHs’ rates of return and shareholders’ rates of return on equity (ROE) were compared by calculating for each bank the coefficients of variation (CV) of the two series of rates of return. Second, a panel data approach was used to evaluate the effectiveness of corporate governance by examining the extent to which the size of the difference between the rates of return for shareholders and for UIAH was associated with a set of corporate governance variables. Third, a comparison was made between the risk-return characteristics of UIAH’s rates of return and shareholders’ dividend yield rate for a sub-sample of 20 banks for which the information was available. Findings: For a significant proportion of the banks (9 out of 28), the CVs of the PSIA returns were higher than those of the shareholders’ ROEs, which suggested that in these cases the PSIA holders were receiving inequitable treatment. Likewise, for 7 out of the 20 banks in the sub-sample, the CVs of the PSIA holders’ rates of return were higher than those of the shareholders’ dividend yield rate. In explaining the size of the differences between the rates of return on PSIA and the shareholders’ ROEs, the variable with the greatest explanatory power was the return on assets, implying that when this was high the bank took a maximum Mudarib share of profits. Some other corporate governance variables had the expected signs, as did a country dummy representing the maturity of the market for Islamic banking, but there was little evidence of the effectiveness of corporate governance in protecting the interests of the UIAH. Research limitations/implications: A limitation of the research was that the inefficiency of the stock markets in the relevant countries and the fact that a few of the banks were not listed made it impossible to use shareholders’ stock market returns. ROE is not a very good proxy, as it is unclear how much value should be placed on retained earnings. Dividend yield rates provide a better comparison with UIAH rates of return, but the data were available for only 20 of the banks. Nevertheless, the results of the analysis strongly suggest that in a significant proportion of cases, UIAH are not being treated equitably. Practical implications: The implication is that the regulation of Islamic banks needs to be improved to provide better protection to UIAH. Social implications: Islamic banks operate mainly in emerging markets where the effectiveness of regulation is limited. The ethical basis of Islamic finance provides some mitigation of this problem but apparently fails to do so in a significant proportion of cases. This should be borne in mind when assertions are made about the ethical basis of Islamic finance. Originality/value: There is a dearth of empirical studies of the practices of Islamic banks and in particular of their treatment of their customers. This is because of various factors: the relative novelty of Islamic finance, the paucity of data and the relatively small size of the body of researchers in the field. This paper aims to contribute to filling this gap.