Governance and Risk Management of Financing in Islamic Banking Based on Textbooks, Academic Literature, and Publications of Islamic Banks: Systematic Literature Review
Keywords:
Sharia Governance, Corporate Governance, Financing Risk Management, Islamic Banking, Systematic Literature Review.
Abstract
This study examines governance and financing risk management in Islamic banking using a Systematic Literature Review (SLR) approach. The study synthesizes 40 relevant articles sourced from academic literature, textbooks, and Islamic bank publications to map theoretical developments and finding trends. The findings indicate that corporate governance and Sharia governance mechanisms, particularly through the role of the Shariah Supervisory Board (SSB) and Internal Sharia Review (ISR), serve as complementary elements in mitigating financing risk. Furthermore, governance plays a strategic role in ensuring operational compliance and asset stability. However, several studies report mixed results, indicating that the effectiveness of governance organs in reducing non-performing financing depends heavily on board competence quality, risk types, and institutional environment differences. Therefore, future research should develop integrated models positioning Sharia governance as a moderating or mediating variable, particularly through comparative studies in the ASEAN region to achieve optimal operational outcomes.
References
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Afgani, K. F., Marzuki, M. M., Majid, W. Z. N. A., Nasser, S. D. T. K., Syukur, M., Wiryono, S. K., Rahadi, R. A., Boediman, A., & Ali, Q. (2024). Risk management practices and the performance of Indonesian and Malaysian Islamic banks: Does digitalization mediate this nexus? Thunderbird International Business Review, 66, 567–581. https://doi.org/10.1002/tie.22402
Akmal, M., Rehman Shah, S. M. A., Rehman, A. U., & Shehryar, M. (2026). The impact of corporate and Shari'ah governance on the risk profile of Islamic financial institutions. Journal of Islamic Monetary Economics and Finance, 12(2), 263–282. https://doi.org/10.21098/jimf.v12i2.2089
Alabbad, A., Hassan, M. K., & Saba, I. (2019). Can Shariah board characteristics influence risk-taking behavior of Islamic banks? International Journal of Islamic and Middle Eastern Finance and Management, 12(4), 469–488. https://doi.org/10.1108/IMEFM-11-2018-0403
Alhammadi, S., Archer, S., & Asutay, M. (2020). Risk management and corporate governance failures in Islamic banks: A case study. Journal of Islamic Accounting and Business Research, 11(10), 1921–1939. https://doi.org/10.1108/JIABR-03-2020-0064
Aslam, E., & Haron, R. (2021). Corporate governance and risk-taking of Islamic banks: Evidence from OIC countries. Corporate Governance, 21(7), 1460–1474. https://doi.org/10.1108/CG-08-2020-0311
Baig, M. M., Malik, Q. A., & Ellahi, N. (2024). Corporate governance and credit rating of Islamic banks: Moderating role of Shariah governance attributes. SAGE Open, 14(2). https://doi.org/10.1177/21582440241247386
Basiruddin, R., & Ahmed, H. (2020). Corporate governance and Shariah non-compliant risk in Islamic banks: Evidence from Southeast Asia. Corporate Governance: The International Journal of Business in Society, 20(2), 240–262. https://doi.org/10.1108/CG-05-2019-0138
Hassan, M. K., Sohel, M. N. I., Choudhury, T., & Rashid, M. (2024). A systematic literature review of risks in Islamic banking system: Research agenda and future research directions. Risk Management, 26(1), Article 3. https://doi.org/10.1057/s41283-023-00135-z
Jallali, S., & Zoghlami, F. (2022). Does risk governance mediate the impact of governance and risk management on banks' performance? Evidence from a selected sample of Islamic banks. Journal of Financial Regulation and Compliance, 30(4), 439–464. https://doi.org/10.1108/JFRC-04-2021-0037
Khan, M. H., Bitar, M., Tarazi, A., Hassan, A., & Fraz, A. (2024). Corruption and bank risk-taking in dual banking systems. Corporate Governance: An International Review, 32(6), 984–1015. https://doi.org/10.1111/corg.12579
Kurnia, R. A. E., Sawarjuwono, T., & Herianingrum, S. (2017). Financing risk management to anticipate financial distress in Islamic banks. Journal of Islamic Economics Lariba, 3(2), 51–64.
Kurniawan, F. A., Hanggraeni, D., & Purnomo, G. (2024). Risk governance unlocks Islamic banks' dual performance goals. JBMP (Journal of Business, Management and Banking, 10(2), 199–223. https://doi.org/10.21070/jbmp.v10i2.1981
Maulidar, A., & Majid, M. S. A. (2020). Do good corporate governance and financing risk management matter for Islamic banks' performance in Indonesia? Ethics: Journal of Economics, 19(2), 169–184. https://doi.org/10.15408/etk.v19i2.15080
Minaryanti, A. A., Fitrijanti, T., Sukmadilaga, C., & Mihajat, M. I. S. (2026). The role of Sharia governance in minimizing credit risk in Islamic banking: A systematic literature review. Journal of Islamic Accounting and Business Research, 17(2), 311–327. https://doi.org/10.1108/JIABR-11-2022-0301
Mollah, S., Skully, M., & Liljeblom, E. (2021). Strong boards and risk-taking in Islamic banks. Review of Corporate Finance, 1(1–2), 135–180. https://doi.org/10.1561/114.00000004
Mukhibad, H., & Setiawan, D. (2022). Shariah supervisory board attributes and corporate risk-taking in Islamic banks. Cogent Business & Management, 9, Article 2158607. https://doi.org/10.1080/23311975.2022.2158607
Mutamimah, M., & Saputri, P. L. (2023). Corporate governance and financing risk in Islamic banks in Indonesia. Journal of Islamic Accounting and Business Research, 14(3), 436–450. https://doi.org/10.1108/JIABR-09-2021-0268
Mutmainah, S. (2018). Governance and risk of Islamic banks in Indonesia for the period 2008–2016. Journal of Accounting and Auditing, 14(2), 172–194. https://doi.org/10.14710/jaa.14.2.172-194
Nainggolan, Y. A., Prahmila, D. I., & Syaputri, A. R. (2023). Do board characteristics affect bank risk-taking and performance? Evidence from Indonesian and Malaysian Islamic banks. Journal of Management & Governance, 27(4), 1–31. https://doi.org/10.1007/s10997-022-09625-w
Nguyen, Q. K. (2021). Oversight of bank risk-taking by audit committees and Sharia committees: Conventional vs Islamic banks. Heliyon, 7(8), e07798. https://doi.org/10.1016/j.heliyon.2021.e07798
Nugraheni, P., & Muhammad, R. (2019). Board of directors and credit risk: An empirical study of Indonesian Islamic banks. Journal of Finance and Banking, 23(4), 503–513. https://doi.org/10.26905/jkdp.v23i4.3484
Nusa Putri, F. A., Haryono, S., & Hassanee, N. (2024). Board characteristics and Indonesian Islamic bank's credit risk. Journal of Islamic Accounting and Finance Research, 6(1), 1–16. https://doi.org/10.21580/jiafr.2024.6.1.19113
Nuzulia, N., & Kasanah, R. (2024). Islamic banking risk management: Trends and insights from a bibliometric and SLR approach. Journal of Islamic Finance and Accounting, 7(2). https://doi.org/10.22515/jifa.v7i2.9851
Prasojo, P., Yadiati, W., Fitrijanti, T., & Sueb, M. (2022). Do risk-taking and Shariah governance have a relationship with Maqasid Shariah-based performance? Global Review of Islamic Economics and Business, 10(1), 27–40. https://doi.org/10.14421/grieb.2022.101-03
Ramdani, O., & Kamal, M. (2023). Corporate governance and Shariah non-compliance risk: The case of Islamic banks in Indonesia. Journal of Islamic Accounting and Finance, 11(1). https://doi.org/10.35836/jakis.v11i1.370
Reyad, S., Chinnasamy, G., & Madbouly, A. (2022). Risk management and corporate governance of Islamic banks: Evidence from GCC countries. Corporate Governance, 22(7), 1425–1443. https://doi.org/10.1108/CG-08-2020-0360
Riduwan, Adha, M. A., Nahar, F. H., & Fathurrahman, A. (2025). The analysis of financing risk and its mitigation based on gender: A study on Islamic banks in Indonesia. International Journal of Islamic Economics and Finance, 8(2), 293–308. https://doi.org/10.18196/ijief.v8i2.28222
Risfandy, T., & Hassan, M. K. (2026). Excess remuneration, governance, and risk-taking in Islamic banks. International Journal of Finance & Economics, 31(2), 1899–1916. https://doi.org/10.1002/ijfe.70022
Rosidi, R., Nugraha, R. A., & Putri, I. L. A. (2024). How Islamic corporate governance mitigates financing risk in Indonesian Islamic banking? Share: Journal of Islamic Economics and Finance, 13(2), 553–?. https://doi.org/10.22373/share.v13i2.21469
Safiullah, M., & Shamsuddin, A. (2018). Risk in Islamic banking and corporate governance. Pacific-Basin Finance Journal, 47, 129–149. https://doi.org/10.1016/j.pacfin.2017.12.008
Umar, U. H., Abduh, M., & Besar, M. H. A. (2023). Shari'a supervisory board and Islamic banks' insolvency risk. Journal of Islamic Monetary Economics and Finance, 9(3), 419–442. https://doi.org/10.21098/jimf.v9i3.1635
Umar, U. H., Abduh, M., & Besar, M. H. A. (2023). Standalone risk management committee, risk governance diversity and Islamic bank risk-taking. Risk Management.
Umar, U. H., Abduh, M., & Besar, M. H. A. (2025). Corporate governance quality index and Islamic bank risk-taking. International Journal of Disclosure and Governance, 22(1), 284–303. https://doi.org/10.1057/s41310-024-00260-5
Wasim, M. H., & Zafar, M. B. (2024). Shariah governance and Islamic banks: A systematic literature review. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-11-2023-0386
Zunanto, M., & Abdullah, A. (2023). Corporate governance and financing risk of Sharia bank in Indonesia. Journal of Management and Islamic Finance, 3(1), 34–49. https://doi.org/10.22515/jmif.v3i1.5901
Adelina, Y. E., Trilaksono, T., & Rohi-Mone, R. (2020). Do corporate and Sharia compliance governance affect enterprise risk management implementation? Journal of Finance and Banking, 24(1), 1–19. https://doi.org/10.26905/jkdp.v24i1.3768
Afgani, K. F., Marzuki, M. M., Majid, W. Z. N. A., Nasser, S. D. T. K., Syukur, M., Wiryono, S. K., Rahadi, R. A., Boediman, A., & Ali, Q. (2024). Risk management practices and the performance of Indonesian and Malaysian Islamic banks: Does digitalization mediate this nexus? Thunderbird International Business Review, 66, 567–581. https://doi.org/10.1002/tie.22402
Akmal, M., Rehman Shah, S. M. A., Rehman, A. U., & Shehryar, M. (2026). The impact of corporate and Shari'ah governance on the risk profile of Islamic financial institutions. Journal of Islamic Monetary Economics and Finance, 12(2), 263–282. https://doi.org/10.21098/jimf.v12i2.2089
Alabbad, A., Hassan, M. K., & Saba, I. (2019). Can Shariah board characteristics influence risk-taking behavior of Islamic banks? International Journal of Islamic and Middle Eastern Finance and Management, 12(4), 469–488. https://doi.org/10.1108/IMEFM-11-2018-0403
Alhammadi, S., Archer, S., & Asutay, M. (2020). Risk management and corporate governance failures in Islamic banks: A case study. Journal of Islamic Accounting and Business Research, 11(10), 1921–1939. https://doi.org/10.1108/JIABR-03-2020-0064
Aslam, E., & Haron, R. (2021). Corporate governance and risk-taking of Islamic banks: Evidence from OIC countries. Corporate Governance, 21(7), 1460–1474. https://doi.org/10.1108/CG-08-2020-0311
Baig, M. M., Malik, Q. A., & Ellahi, N. (2024). Corporate governance and credit rating of Islamic banks: Moderating role of Shariah governance attributes. SAGE Open, 14(2). https://doi.org/10.1177/21582440241247386
Basiruddin, R., & Ahmed, H. (2020). Corporate governance and Shariah non-compliant risk in Islamic banks: Evidence from Southeast Asia. Corporate Governance: The International Journal of Business in Society, 20(2), 240–262. https://doi.org/10.1108/CG-05-2019-0138
Hassan, M. K., Sohel, M. N. I., Choudhury, T., & Rashid, M. (2024). A systematic literature review of risks in Islamic banking system: Research agenda and future research directions. Risk Management, 26(1), Article 3. https://doi.org/10.1057/s41283-023-00135-z
Jallali, S., & Zoghlami, F. (2022). Does risk governance mediate the impact of governance and risk management on banks' performance? Evidence from a selected sample of Islamic banks. Journal of Financial Regulation and Compliance, 30(4), 439–464. https://doi.org/10.1108/JFRC-04-2021-0037
Khan, M. H., Bitar, M., Tarazi, A., Hassan, A., & Fraz, A. (2024). Corruption and bank risk-taking in dual banking systems. Corporate Governance: An International Review, 32(6), 984–1015. https://doi.org/10.1111/corg.12579
Kurnia, R. A. E., Sawarjuwono, T., & Herianingrum, S. (2017). Financing risk management to anticipate financial distress in Islamic banks. Journal of Islamic Economics Lariba, 3(2), 51–64.
Kurniawan, F. A., Hanggraeni, D., & Purnomo, G. (2024). Risk governance unlocks Islamic banks' dual performance goals. JBMP (Journal of Business, Management and Banking, 10(2), 199–223. https://doi.org/10.21070/jbmp.v10i2.1981
Maulidar, A., & Majid, M. S. A. (2020). Do good corporate governance and financing risk management matter for Islamic banks' performance in Indonesia? Ethics: Journal of Economics, 19(2), 169–184. https://doi.org/10.15408/etk.v19i2.15080
Minaryanti, A. A., Fitrijanti, T., Sukmadilaga, C., & Mihajat, M. I. S. (2026). The role of Sharia governance in minimizing credit risk in Islamic banking: A systematic literature review. Journal of Islamic Accounting and Business Research, 17(2), 311–327. https://doi.org/10.1108/JIABR-11-2022-0301
Mollah, S., Skully, M., & Liljeblom, E. (2021). Strong boards and risk-taking in Islamic banks. Review of Corporate Finance, 1(1–2), 135–180. https://doi.org/10.1561/114.00000004
Mukhibad, H., & Setiawan, D. (2022). Shariah supervisory board attributes and corporate risk-taking in Islamic banks. Cogent Business & Management, 9, Article 2158607. https://doi.org/10.1080/23311975.2022.2158607
Mutamimah, M., & Saputri, P. L. (2023). Corporate governance and financing risk in Islamic banks in Indonesia. Journal of Islamic Accounting and Business Research, 14(3), 436–450. https://doi.org/10.1108/JIABR-09-2021-0268
Mutmainah, S. (2018). Governance and risk of Islamic banks in Indonesia for the period 2008–2016. Journal of Accounting and Auditing, 14(2), 172–194. https://doi.org/10.14710/jaa.14.2.172-194
Nainggolan, Y. A., Prahmila, D. I., & Syaputri, A. R. (2023). Do board characteristics affect bank risk-taking and performance? Evidence from Indonesian and Malaysian Islamic banks. Journal of Management & Governance, 27(4), 1–31. https://doi.org/10.1007/s10997-022-09625-w
Nguyen, Q. K. (2021). Oversight of bank risk-taking by audit committees and Sharia committees: Conventional vs Islamic banks. Heliyon, 7(8), e07798. https://doi.org/10.1016/j.heliyon.2021.e07798
Nugraheni, P., & Muhammad, R. (2019). Board of directors and credit risk: An empirical study of Indonesian Islamic banks. Journal of Finance and Banking, 23(4), 503–513. https://doi.org/10.26905/jkdp.v23i4.3484
Nusa Putri, F. A., Haryono, S., & Hassanee, N. (2024). Board characteristics and Indonesian Islamic bank's credit risk. Journal of Islamic Accounting and Finance Research, 6(1), 1–16. https://doi.org/10.21580/jiafr.2024.6.1.19113
Nuzulia, N., & Kasanah, R. (2024). Islamic banking risk management: Trends and insights from a bibliometric and SLR approach. Journal of Islamic Finance and Accounting, 7(2). https://doi.org/10.22515/jifa.v7i2.9851
Prasojo, P., Yadiati, W., Fitrijanti, T., & Sueb, M. (2022). Do risk-taking and Shariah governance have a relationship with Maqasid Shariah-based performance? Global Review of Islamic Economics and Business, 10(1), 27–40. https://doi.org/10.14421/grieb.2022.101-03
Ramdani, O., & Kamal, M. (2023). Corporate governance and Shariah non-compliance risk: The case of Islamic banks in Indonesia. Journal of Islamic Accounting and Finance, 11(1). https://doi.org/10.35836/jakis.v11i1.370
Reyad, S., Chinnasamy, G., & Madbouly, A. (2022). Risk management and corporate governance of Islamic banks: Evidence from GCC countries. Corporate Governance, 22(7), 1425–1443. https://doi.org/10.1108/CG-08-2020-0360
Riduwan, Adha, M. A., Nahar, F. H., & Fathurrahman, A. (2025). The analysis of financing risk and its mitigation based on gender: A study on Islamic banks in Indonesia. International Journal of Islamic Economics and Finance, 8(2), 293–308. https://doi.org/10.18196/ijief.v8i2.28222
Risfandy, T., & Hassan, M. K. (2026). Excess remuneration, governance, and risk-taking in Islamic banks. International Journal of Finance & Economics, 31(2), 1899–1916. https://doi.org/10.1002/ijfe.70022
Rosidi, R., Nugraha, R. A., & Putri, I. L. A. (2024). How Islamic corporate governance mitigates financing risk in Indonesian Islamic banking? Share: Journal of Islamic Economics and Finance, 13(2), 553–?. https://doi.org/10.22373/share.v13i2.21469
Safiullah, M., & Shamsuddin, A. (2018). Risk in Islamic banking and corporate governance. Pacific-Basin Finance Journal, 47, 129–149. https://doi.org/10.1016/j.pacfin.2017.12.008
Umar, U. H., Abduh, M., & Besar, M. H. A. (2023). Shari'a supervisory board and Islamic banks' insolvency risk. Journal of Islamic Monetary Economics and Finance, 9(3), 419–442. https://doi.org/10.21098/jimf.v9i3.1635
Umar, U. H., Abduh, M., & Besar, M. H. A. (2023). Standalone risk management committee, risk governance diversity and Islamic bank risk-taking. Risk Management.
Umar, U. H., Abduh, M., & Besar, M. H. A. (2025). Corporate governance quality index and Islamic bank risk-taking. International Journal of Disclosure and Governance, 22(1), 284–303. https://doi.org/10.1057/s41310-024-00260-5
Wasim, M. H., & Zafar, M. B. (2024). Shariah governance and Islamic banks: A systematic literature review. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-11-2023-0386
Zunanto, M., & Abdullah, A. (2023). Corporate governance and financing risk of Sharia bank in Indonesia. Journal of Management and Islamic Finance, 3(1), 34–49. https://doi.org/10.22515/jmif.v3i1.5901
Published
2026-09-20
How to Cite
Savitri, J. A., Farhana, D., Sari, R., Saftiana, Y., & Isnurhadi. (2026). Governance and Risk Management of Financing in Islamic Banking Based on Textbooks, Academic Literature, and Publications of Islamic Banks: Systematic Literature Review. International Journal of Education, Vocational and Social Science , 5(04), 1528-1550. https://doi.org/10.63922/ijevss.v5i04.6630
Contact Person +6282139474255
Email : ijevss@citakonsultindo.or.id / editor.ijevss@gmail.com
