Hasan Fauzi

Purpose – This study aims to examine the effects of corporate ownership (government-linked investment companies, GLICs), linearity of GLICs, board ownership and linearity of board ownership on company performance. Design/methodology/approach – Using panel data from companies that are listed on the Malaysian Stock Exchange during the period of 2000 to 2009, this study uses weighted least square models. Findings – The results show that GLICs ownership is positively and significantly related to company performance, while board ownership is negatively and significantly related to company performance. These findings suggest that GLICs ownership improves company performance, while board ownership destroys company performance. The results also show that while GLICs ownership has an inverted U-shaped relationship with company performance, board ownership has a U-shaped relationship with company performance. Research limitations/implications – The theoretical implication of this study is tha...

The objective of this study is to investigate the CSR (Corporate Social Responsibility) practices after the issuance of the government regulation as the implementation guideline of the CSR as stipulated in the law no.40/2007 through business players’ interviews. Using the semi structured  interviews with Indonesian executives/informants of Indonesian companies, this study found that CSR practices have been viewed as philanthropic activities of companies with all the consequences that follow: shareholder as the most important stakeholder, reporting CSR practice as means to have public image and no need to have any standard to prepare CSR practice reporting. Given the findings, there is a need to redefine CSR based on the intention to maintain good relationship with stakeholders and to have the integrated management system to help management well interact with them in market and non- market mechanism.

ABSTRACT Purpose-The objective of this paper is to explore the Islamic principles and law and formulate a conceptual framework of corporate social responsibility (CSR) based on Islamic values and beliefs. An Islamic CSR (i-CSR) framework is vital in guiding the CSR strategies, policies and practices of Islamic institutions. Design/Methodology/Approach-This notion of CSR in Islam is proposed by incorporating the concept of tawhid and integrating the principles of Maqasid Syariah (Islamic Law) and Maslahah (public good) which completes the mission of mankind on earth i.e. the absolute submission to his obligations in the performance of ibadah, dakwah and as a khalifah. Practical Implications-The establishment of the framework provides a holistic guidance based on Islamic beliefs, values and concepts which should be integrated with and embedded as part of the overall governance and accountability of institutions. This model is practical not only for Islamic organizations and institutions but also for other entities that subscribe to the beliefs that the function of business is a manifestation of the act of devotion to God, i.e. promoting good deeds. Originality/Value-A comprehensive model of Islamic CSR (i-CSR), which includes the elements of governance, accountability, prioritisation of activities and practices and disclosures. Paper type-Conceptual paper

ABSTRACT This study seeks to investigate specific CSR practices i.e. dimension of workplace from an Islamic perspective. Three major principles in Islam, which include vicegerent (khalifah), divine accountability, and obligation to enjoin good and forbid evil guide the understanding about the responsibilities of business organizations to their employees. Using content analysis, annual reports (2007-2011) of six full-fledged Islamic banks in Malaysia and Indonesia have been analysed. The data has been collected based on the AAOIFI's (2005) guidelines and disclosure index of some prevailing literature. Generally, the Malaysian banks disclosed more information, but the trend in both countries is rather similar. Generally, all banks have treated their employees justly in creating a positive workplace environment hence comply with the Islamic laws and principles.

Purpose – This study aims to examine the effects of corporate ownership (government-linked investment companies, GLICs), linearity of GLICs, board ownership and linearity of board ownership on company performance. Design/methodology/approach – Using panel data from companies that are listed on the Malaysian Stock Exchange during the period of 2000 to 2009, this study uses weighted least square models. Findings – The results show that GLICs ownership is positively and significantly related to company performance, while board ownership is negatively and significantly related to company performance. These findings suggest that GLICs ownership improves company performance, while board ownership destroys company performance. The results also show that while GLICs ownership has an inverted U-shaped relationship with company performance, board ownership has a U-shaped relationship with company performance. Research limitations/implications – The theoretical implication of this study is that agency problem decreases in companies with low and high levels of board ownership concentration, while it increases in companies with middle level of board ownership concentration. Furthermore, agency cost decreases in companies with a certain level of GLICs ownership concentration as the government’s New Economic Model (NEM) expects. However, agency cost increases in companies after a certain level of GLICs ownership concentration. Practical implications – In practical perspectives, this study provides evidence to policy makers that the government’s proposal to reduce GLICs’ investments in Malaysia and diversify them aboard as mentioned in NEM is supported because the decrease in GLICs stakes in certain level may increase company performance. On the other hand, if the policy of the government is to increase GLICs stakes, the company performance may decrease after a certain level of ownership concentration. This study also provides evidence that investors can invest in companies with low and high board ownership concentration. Furthermore, the NEM policy gives investors an opportunity to invest in the companies with GLICs. Reducing GLICs stakes in the Malaysian market and putting them in the international markets, as mentioned in the Malaysian Government’s NEM policy, will create more opportunities for international investors to invest their fund in the Malaysian market. Thus, the emerging markets exist. In addition, the NEM policy also encourages institutional ownerships like domestic and foreign to increase their stakes instead of GLICs in the Malaysian market. Originality/value – So far, most of the previous studies on GLICs and board ownerships in the Malaysian setting focused on the relationship of the ownership structure with company performance. However, no study has been done to examine the linearity effects of GLICs and board ownerships on company performance. The study is very important to perform to provide the policy makers and investors with clear guidance before their decisions.

ABSTRACT This study seeks to investigate specific CSR practices i.e. dimension of workplace from an Islamic perspective. Three major principles in Islam, which include vicegerent (khalifah), divine accountability, and obligation to enjoin good and forbid evil guide the understanding about the responsibilities of business organizations to their employees. Using content analysis, annual reports (2007-2011) of six full-fledged Islamic banks in Malaysia and Indonesia have been analysed. The data has been collected based on the AAOIFI's (2005) guidelines and disclosure index of some prevailing literature. Generally, the Malaysian banks disclosed more information, but the trend in both countries is rather similar. Generally, all banks have treated their employees justly in creating a positive workplace environment hence comply with the Islamic laws and principles.

ABSTRACT Purpose-The objective of this paper is to explore the Islamic principles and law and formulate a conceptual framework of corporate social responsibility (CSR) based on Islamic values and beliefs. An Islamic CSR (i-CSR) framework is vital in guiding the CSR strategies, policies and practices of Islamic institutions. Design/Methodology/Approach-This notion of CSR in Islam is proposed by incorporating the concept of tawhid and integrating the principles of Maqasid Syariah (Islamic Law) and Maslahah (public good) which completes the mission of mankind on earth i.e. the absolute submission to his obligations in the performance of ibadah, dakwah and as a khalifah. Practical Implications-The establishment of the framework provides a holistic guidance based on Islamic beliefs, values and concepts which should be integrated with and embedded as part of the overall governance and accountability of institutions. This model is practical not only for Islamic organizations and institutions but also for other entities that subscribe to the beliefs that the function of business is a manifestation of the act of devotion to God, i.e. promoting good deeds. Originality/Value-A comprehensive model of Islamic CSR (i-CSR), which includes the elements of governance, accountability, prioritisation of activities and practices and disclosures. Paper type-Conceptual paper

This study examines the relationship of corporate social performance (CSP) to corporate financial performance (CFP) to determine if CSP is related to firm performance.  Additionally, it examines whether firm size or industry affects the relationships between CSR and CSP. This study  advances the literature as it examines this relationship for companies in a developing country, Indonesia, along with examining the impact of moderating variables on this relationship. Two models were developed: the first model was derived using slack resource theory and the second model was developed using the good management theory. Through the examination of 383 firms, the result of the study failed to find a significant relationship between CSP and CFP in either model.  Further analysis, using the slack resource theory, did find that company size had a significant positive moderating effect on the relationship between CSP and CFP.

Corporate social responsibility has become an important aspect of business society and there is a growing interest in companies to report their social and environmental initiatives. While the tenets of CSR have a lot in common with Islamic moral law (Shari’ah), little is known about the CSR disclosure of Islamic banks. To address this gap, the current study provides a cross-cultural perspective on the social responsibility disclosure in Islamic banks across two countries, namely Indonesia and Malaysia. Using the content analysis of the annual reports for three full-fledged local Islamic banks in Indonesia and three Islamic banks in Malaysia for
the period of 2007 to 2011, this study revealed that an overall growth in the corporate social responsibility disclosure of Islamic banks both in Malaysia and Indonesia. More specifically, it was found that the workplace and community dimensions were the most highly disclosed areas by the Islamic banks in both countries. By discussing the findings according to the
stages of growth model for corporate social responsibility, we suggest the Islamic banks to enhance their responsiveness and transform from CSR reporters of social responsibility
respondens.

he rationale behind the establishment of Islamic banks globally is based on the precept that Islamic banking practices are conducted in accordance with the strict values and principles of
Syariah. In line with this premise the Corporate Social Responsibilities (CSR) policies and practices of Islamic banks should be underpinned by the Islamic laws and principles as
revealed in the Qur’an and the Sunnah. Drawing on the doctrine of Maqasid al-Syariah and the concept of Maslahah, this study proposes an Islamic CSR (i-CSR) conceptual framework
that will align the CSR policies and practices of Islamic banks with the principles and values of Islam. The doctrine of Maqasid al-Syariah provides guidance on the preservation of the
protected elements of faith, life intellect, posterity and wealth while the concept of Maslahah specifies the levels of protection: essential, complementary and embellishment. The two
conceptions are integrated into six thematic CSR dimensions comprising of strategy, governance, community, workplace, environment and marketplace resulting in the prioritization of CSR practices based on Syariah principles. This study provides a structured approach to CSR policies and practices for Islamic banks to ensure full compliance with Islamic principles. Such a conceptual framework would be of interest to Islamic Financial
Institutions worldwide and regulatory authorities in countries that are hosts to viable Islamic banking systems to improve CSR policies, practices and and disclosure on the part of Islamic
banks. The findings from this study offer initial insights into an Islamic framework in respect of CSR policies and practices specific to Islamic banks.

The objectives of the study is to examine the current CSR practices of Islamic banks operating in Malaysia and Indonesia, to draw inferences from the results on the current CSR practices of Islamic banks in Malaysia and Indonesia, to develop an i-CGA framework, and to empirically test the applicability of the framework on Islamic banks in Malaysia and Indonesia. The process of data collection for the study were carried in 4 Phases as follows: Phase 1- Preliminary investigation to identify gaps in the CSR practices as viewed from Islamic perspectives, Phase 2 - The development of i-CSR General Practice Framework based on Maqasid al-Shariah principles, Phase 3 - Operationalisation of i-CSR general practice framework (development of i-CSR general practice index), and phase 4 - Finalizing the development of i-CSR General Practice Framework. The current CSR practice in Indonesia Islamic banks and Malaysian Islamic bank has little bit different focus. An i-CSR General Practice Framework for Islamic banks has been developed named i-CGA framework. In terms of the contents, the framework has got confirmed by shariah expert and Shariah officers. This issue is not different from the two countries. The applicability of the formulated i-CGA framework is little bit different between Indonesia and Malaysia. The difference of the applicability in two countries is caused by structural factors: state constitutional, ulema council position, and policy of Stock Exchange toward social and environmental issue in formal company reporting. The applicability of i-CGA framework in Indonesia is lower than the one in Malaysia. In general, the practice of CSR in Indonesia can be implicitly said to be lower than the one in Malaysia.

The objective of this paper is to investigate the current practices of climate change issue in Indonesian state-owned companies. Of the state-owned companies, the ones with the sensitiveness to climate change issue and with the availability annual and sustainability report were sampled for the investigation. Given the companies, content analysis using unit analysis of the number of disclosure (coded 1 or ) and the classification of disclosure set by GRI was applied to their corporate report. The findings of this study are that of the 41 climate change issues, 59% are disclosed in the annual reports and 63% in sustainability reports by companies under mining and manufacturing industry. The disclosures categories commonly practiced by the companies include: (1) environmental profile, (2) green house gas, and (3) environment initiative. The practical implication of the finding is that authorized bodies like Bapepam and BUMN ministry can use them to improve the disclosure index on climate change issues for the companies by issuing appropriate policy. The novelty of this paper comes from the fact that issue discussed is still rare in the literature, especially, given the common content analysis method, its application to Indonesian state-owned companies with specific uniqueness of the two Laws constraint.

Using a panel data from companies that are listed on Malaysian Stock Exchange during the period of 2000 to 2009, this study examines the effects of corporate ownership (Government-Linked Investment Companies (GLICs) and board ownership on market performance. This paper uses Weighted Least Square (WLS) models. The results of WLS models show that while GLICs ownership has an inverted U-shaped relationship with company performance, board ownership has a U-shaped relationship with company performance. These findings suggest that when ownership concentrated, while board ownership destroys company performance, GLICs ownership improves company performance.

Keywords: GLICs ownership, board ownership, company performance, Malaysia

Based upon a review of corporate performance, corporate financial performance and corporate social performance, we propose that the concept of ―triple bottom line‖ (TBL) as ―sustainable corporate performance‖ (SCP) should consist of three measurement elements, namely: (i) financial, (ii) social and (iii) environmental. TBL as SCP is proposed to be derived from the interface between them. We also propose that the content of each of these measurement elements may vary across contexts and over time. Furthermore, TBL as SCR should be interpreted to be a relative concept that is dynamic and iterative. Continuous monitoring needs to be performed, adapting the content of the measurement elements to changes that evolve across contexts and over time in the marketplace and society. TBL as SCP may be seen as a function of time and context.

The paper examined concept of corporate performance. The paper seeks to examine the impact
of corporate social performance on the relationship among business environment, strategy, organization,
and control system and corporate performance. The paper is based on a synthesis of
the existing literatures in strategic management and accounting filed. The paper finds that corporate
social performance defined as stakeholder relationship become one important dimension
of the strategic behaviors that an organization can set to improve corporate performance. The
contextual variables as discussed in strategic management and accounting domain will be contingent
upon strategic behaviors, which are behaviors of members in an organization. The
paper integrates the contextual variables including business environment, strategy, organization
structure, and control system with corporate performance by using corporate social performance
as moderating variable by means of a recent literatures study from strategic management
and accounting field.

The paper examined concept of corporate performance. The paper seeks to examine the impact
of corporate social performance on the relationship among business environment, strategy, organization,
and control system and corporate performance. The paper is based on a synthesis of
the existing literatures in strategic management and accounting filed. The paper finds that corporate
social performance defined as stakeholder relationship become one important dimension
of the strategic behaviors that an organization can set to improve corporate performance. The
contextual variables as discussed in strategic management and accounting domain will be contingent
upon strategic behaviors, which are behaviors of members in an organization. The
paper integrates the contextual variables including business environment, strategy, organization
structure, and control system with corporate performance by using corporate social performance
as moderating variable by means of a recent literatures study from strategic management
and accounting field.

The research objectives of the study are to investigate whether there are any positive relationships
between CFP and CSR under the slack resource theory and to investigate whether their
are any positive relationships between CSR and CFP under good management theory by integrating
concept of strategic management into the definition of CSR as sustainable corporate
performance including economy, social, and environment. To answer the research questions of
this study, questionnaire-based survey research design was used. The questionnaires that include
items representing variables in this study (corporate social performance, corporate financial
performance, business environment, strategy, organization structure, and control system)
were sent to the respondents who are managers of state-owned companies (BUMN) and private
-owned companies using post and e-mail services. There is a positive relationship between CFP
and CSP under the slack resource theory and under good management theory.

The objective of this study is to address the issue of
the relationship between corporate social and
financial performance by moderating company size
and financial leverage with the help of two types of
industry as control variable. The corporate social
performance (CSP/CSR) is measured using seven
dimensions developed initially by Michael Jantzi
Research Associate, Inc and used by Mahoney and
Robert (2007). To attain the main research objective,
the measure of CSP composite is used. Furthermore,
company size, financial leverage, and type of industry are measured by total assets, degree of intermal and
external source to finance the companys’ assets, and
a dummy variable (0 for non-manufacture and 1 for
manufacture), respectively. A moderated multiple
regression model is used in the present study. Four
models are developed in the study based on the theory
of slack resource and good management. The result
of the present study is that corporate social
performance (CSP/CSR) has no effect on corporate
financial performance (CFP) under slack resource
and good management theory. It is also shown that only financial leverage could moderate the interaction
between CSP and CFP. However, based on the overall
analysis, it may be reasonable to come to a conclusion
that the relationship between CSP and CFP is spurious
as Orlitzki (2000) concluded.

One important instrument to be used in the control system design is strategic behaviors that can
lead to the expected organization performance. Referring to the extended definition of strategic
behavior using stakeholder-based strategic behavior, corporate social performance is kind of
strategic behavior to be influenced by using control system. This paper discusses how control
system, using Simons’ levers of control can play important role in increasing the corporate social
performance. The interaction between control system, including belief system, boundary
system, diagnostic control system, and interactive control system, as well as the corporate financial
performance (CFP) can affect the corporate social performance (CSP) due to fact that
increase in CFP resulting from the appropriate use of control system components enables the
company has more chance to do the CSP. The levers of control are deemed to form an integral
part of employee socialization and support the development of an organization’s culture, the
system of shared beliefs, values, norms, and mores of organizational members which are
deemed to be a primary determinant of the direction of employee behavior.

Despite objections from various business associations, the Constitutional Court ruled in April this year that
corporate social responsibility (CSR) remains mandatory for Indonesian firms as stipulated in Article 74 of Law No.
40/2007 on limited liability companies.
In their petition filed with the court, the business organizations argued that CSR should be voluntary rather than
compulsory. They believed that Article 74 of the law, which obligates firms to allocate funds for CSR programs,
would add unnecessary costs to businesses.
What is wrong with CSR, the corporate sector, and the law?