Quantitative Analysis of The Characteristics of The Sharia Supervisory Board in Promoting The Quality of Sustainability Reporting at Islamic Commercial Banks in Indonesia

Abstract

Although POJK No. 51/POJK.03/2017 requires financial service institutions to prepare sustainability reports starting from the 2020 reporting year, the quality of ESG disclosure at Islamic commercial banks (BUS) in Indonesia still varies significantly. This study quantitatively analyzes the influence of Sharia Supervisory Board (SSB/DPS) characteristics encompassing board size, members' financial competence, and gender diversity on the quality of sustainability reporting of BUS, within the framework of Islamic Corporate Governance and Sustainability Reporting. Panel data from 12 OJK-registered BUS for the period 2020–2024 (45 observations) were analyzed using the Fixed Effect Model (FEM). Sustainability reporting quality was measured through content analysis based on GRI Standards 2021 (77 items), with the selection of GRI grounded in its alignment with the principles of transparency and accountability consistent with maqasid al-Shari'ah. The results show that SSB size, financial competence, and gender diversity each have a positive and significant effect on sustainability reporting quality, with financial competence showing the largest association coefficient (β = 0.065). These findings affirm the strategic role of the SSB as an Islamic Corporate Governance mechanism that fosters non-financial accountability, consistent with the values of amanah (trust) and khalifah (stewardship) in Islam.