Panel Regression Study on the Role of the Sharia Supervisory Board in Enhancing Sustainability Disclosure Quality in Indonesian Islamic Banks

Abstract

This study examines whether Sharia Supervisory Board (SSB) characteristics improve sustainability disclosure quality in Indonesian Islamic commercial banks. Using a balanced panel of ten banks observed from 2021 to 2025, the study applies content analysis and panel data regression. Sustainability Disclosure Quality (SDQ) is measured through a 30-item index integrating economic, environmental, social, governance, Sharia governance, and IFRS S1/S2-maqashid shariah dimensions. The main explanatory variables are SSB size and meeting frequency, while bank size, profitability, capital adequacy, financing risk, intermediation, board structure, and audit committee size are included as controls. Model selection tests support the Fixed Effect Model. The results show that SSB size and meeting frequency do not significantly affect SDQ, while bank size has a positive and significant effect. These findings suggest that sustainability disclosure quality is driven more by institutional capacity and reporting resources than by formal SSB structures. The study contributes to Islamic corporate governance literature by emphasizing the distinction between formal Sharia governance indicators and substantive SSB effectiveness. Practically, the findings suggest that Islamic bank regulators and management should strengthen substantive sustainability governance and reporting capacity rather than relying solely on formal sharia supervisory board structures.