Board of directors and earnings management: conventional and Islamic banks

Ahmad Abu-Dawleh*, Nadine Lybaert, Tensie Steijvers, Mieke Jans

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


This study examines how the board of directors (BOD) of Islamic banks (IBs) might affect earnings management differently, compared to BOD of conventional banks (CBs). Our results indicate that banks in the MENA region that promote BOD independence incur less earnings management. Distinguishing between CBs and IBs, we document higher loan quality and credit policy at IBs. Moreover, smaller BOD size and board independence decrease earnings management at IBs. Findings suggest that agency theory might not accommodate the agency conflicts at IBs, since it neglects stakeholders' behavioural patterns. Thus, these results suggest the need to shape directors' financial acumen at IBs.

Original languageEnglish
Pages (from-to)1640-1656
Number of pages17
JournalAsia - Pacific Journal of Accounting & Economics
Issue number6
Early online date3 Mar 2021
Publication statusPublished - 2022


  • Board of directors
  • board independence
  • board size
  • earnings management
  • Islamic and conventional banks

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