Maya Indriastuti^1♣, Deddy Kurniawansyah², Luluk Muhimatul Ifada¹, Muhammad Khafid³

¹Faculty of Economics, Dept. of Accounting, Universitas Islam Sultan Agung, Semarang, Indonesia
²Faculty of Economics and Business, Dept. of Accounting, Universitas Airlangga, Surabaya, Indonesia
³Faculty of Economics, Dept. of Accounting, Universitas Negeri Semarang, Semarang, Indonesia

ABSTRACT

In Indonesia, the company's CSR activities must comply with ISO 26000 and realize one of the G20 goals; sustainability. The goal of this research is to examine the role of reputation in mediating the influence of Islamic CSR disclosure (ICSRD) and sharia governance (SG) in enhancing the financial performance (FP) of sharia banks in Indonesia. This study uses the latest GRI and CSRD indicators, CG, and FP from a religious perspective to establish a measurement framework. The sampling method of this study uses the purposive sampling, the research sample consisting of 143 annual reports of sharia banks in Indonesia from 2009 to 2019 and analyzed by using panel data regression analysis. Results show that the ICSRD and SG, in terms of sharia supervisory board (SSB)_meeting frequency, has a significant positive effect on sharia banks’ reputation and FP in Indonesia. However, SG, in terms of the SSB members, has no sig. effect on the reputation and FP of sharia banks in Indonesia. Reputation can mediate the effect of ICSRD and SG on FP. This research suggests that all sharia banks should implement a more extensive ethical framework, incorporating Islamic ethical principles, in all facets of their operational activities.

Keywords: Islamic Corporate Social Responsibility Disclosure, Sharia Governance, Financial Performance, Reputation, Sharia Banks.