• Rolina Rahardjoputri Universitas Sebelas Maret, Indonesia
  • Tastaftiyan Risfandy Universitas Sebelas Maret, Indonesia
  • Ayu Dwi Utami Universitas Sebelas Maret, Indonesia


The empirical literature on a one-tier board system has recently focused on busy directors, defined as directors holding multiple similar positions in more than one firm simultaneously. In the same spirit, this paper investigates the impact of busy commissioners (instead of busy directors) on firms' performance for the case of Indonesia, a country adopting a two-tier board system. We find that busy commissioners do not impact accounting performance but are negatively associated with market performance. The markets tend to react negatively to the presence of busy commissioners, while actually the firms are also not advantaged financially by their presence. Interestingly, we also find that Shariah-compliant firms tend to have better accounting performance but not with market performance. Our analysis further reveals that the negative impact of busy commissioners on market performance diminishes in non-Shariah-compliant firms. Perhaps, the different characteristics of Shariah-compliant and non-Shariah-compliant companies, wherein Shariah-compliant firms tend to restrict leverage and cash level, account for the results. These findings are robust across various regressions. This research calls on policymakers to enforce the regulation regarding commissioners to reduce its detrimental impact on performance. The regulators should also collaborate with relevant agencies to educate and promote the existence of Shariah-compliant firms in Indonesia.


The authors would like to thank Universitas Sebelas-Maret, Indonesia, for the partial funding for this study.

Keywords: Busy commissioners, Shariah-compliant firms, Performance, Indonesia.


Ahn, S., Jiraporn, P., & Kim, Y. S. (2010). Multiple directorships and acquirer returns. Journal of Banking and Finance, 34(9), 2011–2026.

Al-Awadhi, A. M., & Dempsey, M. (2017). Social norms and market outcomes: The effects of religious beliefs on stock markets. Journal of International Financial Markets, Institutions and Money, 50, 119–134. https://doi.org/10.1016/j.intfin.2017.05.008

Alam, N., Arshad, S., & Rizvi, S. A. R. (2016). Do Islamic stock indices perform better than conventional counterparts? An empirical investigation of sectoral efficiency. Review of Financial Economics, 31, 108–114. https://doi.org/10.1016/j.rfe.2016.06.003

Alam, N., & Rajjaque, M. S. (2016). Shariah-compliant equities: Empirical evaluation of performance in the European market during credit crunch. In Islamic Finance (Vol. 15, pp. 122–140). https://doi.org/10.1007/978-3-319-30918-7_8

Andres, C., Van den Bongard, I., & Lehmann, M. (2013). Is busy really busy? Board governance revisited. Journal of Business Finance and Accounting, 40(9–10), 1221–1246.

Anwer, Z., Azmi, W., & Mohamad, S. (2023). Shariah screening and corporate governance: The case of constituent stocks of Dow Jones US indices. International Review of Economics & Finance, 86, 976–1002. https://doi.org/10.1016/j.iref.2020.12.013

Ashraf, D., & Khawaja, M. (2016). Does the Shariah screening process matter? Evidence from Shariah compliant portfolios. Journal of Economic Behavior & Organization, 132, 77–92.

Atayah, O. F., Dhiaf, M. M., Najaf, K., & Frederico, G. F. (2022). Impact of covid-19 on financial performance of logistics firms: Evidence from G-20 countries. Journal of Global Operations and Strategic Sourcing, 15(2), 172–196.

Bappenas. (2019). Indonesia Islamic Economic Masterplan. In Indonesian Ministry of National Development Planning (Vol. 6).

Bennouri, M., Chtioui, T., Nagati, H., & Nekhili, M. (2018). Female board directorship and firm performance: What really matters? Journal of Banking and Finance, 88, 267–291.

Boone, A. L., Casares Field, L., Karpoff, J. M., & Raheja, C. G. (2007). The determinants of corporate board size and composition: An empirical analysis. Journal of Financial Economics, 85(1), 66–101.

Boubakri, N., Chen, R., Guedhami, O., & Li, X. (2019). The stock liquidity of banks: A comparison between Islamic and conventional banks in emerging economies. Emerging Markets Review, 39(May 2018), 210–224.

Claver, E., Molina, J., & Tarí, J. (2002). Firm and industry effects on firm profitability: A spanish empirical analysis. European Management Journal, 20(3), 321–328.

Conyon, M. J., & He, L. (2017). Firm performance and boardroom gender diversity: A quantile regression approach. Journal of Business Research, 79, 198–211. https://doi.org/10.1016/j.jbusres.2017.02.006

Dinar Standard. (2022). State of the Global Islamic Economy Report 2021/2022. State of the Global Islamic Economy Report 2020/21, 4–202.

Farooq, O., & Alahkam, A. (2016). Performance of shariah-compliant firms and non-shariah-compliant firms in the MENA region: Which is better? Journal of Islamic Accounting and Business Research, 7(4), 268–281.

Ferris, S. P., Jagannathan, M., & Pritchard, A. C. (2003). Too busy to mind the business? Monitoring by directors with multiple board appointments. The Journal of Finance, 58(3), 1087-1111.

Fich, E. M. (2005). Are some outside directors better than others? Evidence from director appointments by fortune 1000 firms*. The Journal of Business, 78(5), 1943–1972.

Fich, E. M., & Shivdasani, A. (2006). Are busy boards effective monitors?. The Journal of Finance, 61(2), 689-724.

Field, L., Lowry, M., & Mkrtchyan, A. (2013). Are busy boards detrimental? Journal of Financial Economics, 109(1), 63–82.

Fitriah, N. (2018). Innovation of Islamic banking industry as an alternative Islamic economic development in Indonesia. Jurnal Jurisprudence, 7(2), 132–141.

Gati, V., Nasih, M., Agustia, D., & Harymawan, I. (2020). Islamic index, independent commissioner and firm performance. Cogent Business and Management, 7(1), 1824440.

Hamdi, F. M., & Zarai, M. A. (2014). Corporate governance practices and earnings management in Islamic banking institutions. Research Journal of Finance and Accounting, 5(9), 81–96.

Hamza, H. (2013). Shariah governance in Islamic banks: effectiveness and supervision model. International Journal of Islamic and Middle Eastern Finance and Management, 6(3), 226–237.

Harris, I. G., & Shimizu, K. (2004). Too busy to serve? an examination of the influence of overboarded directors. Journal of Management Studies, 41(5), 775–798.

Harymawan, I., Nasih, M., Ratri, M. C., & Nowland, J. (2019). CEO busyness and firm performance: Evidence from Indonesia. Heliyon, 5(5), e01601.

Hassan, M. K., Karim, M. S., Lawrence, S., & Risfandy, T. (2022). Weathering the COVID-19 storm: The case of community banks. Research in International Business and Finance, 60(June 2021), 101608.

Houthoofd, N., & Hendrickx, J. (2012). Industry segment effects and firm effects on firm performance in single industry firms. In Research in Competence-Based Management (Vol. 6, pp. 237–264). https://doi.org/10.1108/S1744-2117(2012)0000006010

Iskandar, D. (2021). The effect of profitability and sales growth on company value moderated by leverage. International Journal of Management Studies and Social Science Research, 3(5 September-October), 2582–0265.

Jackling, B., & Johl, S. (2009). Board structure and firm performance: Evidence from India’s top companies. Corporate Governance: An International Review, 17(4), 492–509.

Jawadi, F., Jawadi, N., & Louhichi, W. (2014). Conventional and Islamic stock price performance: An empirical investigation. International Economics, 137, 73–87. https://doi.org/10.1016/j.inteco.2013.11.002

Jiraporn, P., Kim, Y. S., & Davidson, W. N. (2008). Multiple directorships and corporate diversification. Journal of Empirical Finance, 15(3), 418–435.

Khalil, A., & Boulila Taktak, N. (2020). The impact of the Shariah board’s characteristics on the financial soundness of Islamic banks. Journal of Islamic Accounting and Business Research, 11(9), 1807–1825.

Kiel, G. C., & Nicholson, G. J. (2006). Multiple directorships and corporate performance in Australian listed companies. Corporate Governance: An International Review, 14(6), 530-546.

Kok, S., Giorgioni, G., & Laws, J. (2009). Performance of Shariah-compliant indices in London and NY stock markets and their potential for diversification. International Journal of Monetary Economics and Finance, 2, 398–408.

Lee, K. W., & Lok, C. L. (2020). Busy boards, firm performance and operating risk. Asian Academy of Management Journal of Accounting and Finance, 16(2), 1–23.

Lee, S. P., & Isa, M. (2015). Directors’ remuneration, governance and performance: The case of Malaysian banks. Managerial Finance, 41(1), 26–44.

Li, H., & Chen, P. (2018). Board gender diversity and firm performance: The moderating role of firm size. Business Ethics, 27(4), 294–308.

Nomran, N. M., Haron, R., & Hassan, R. (2018). Shari’ah supervisory board characteristics effects on Islamic banks’ performance: Evidence from Malaysia. International Journal of Bank Marketing, 36(2), 290-304.

Ombudsman. (2022). Soal Maladministrasi Rangkap Jabatan BUMN, Ombudsman RI: Masih Menjadi Sorotan [Maladministration of Multiple Positions in BUMN: Indonesian Ombudsman is in the spotlight].

Pandey, R., Vithessonthi, C., & Mansi, M. (2015). Busy CEOs and the performance of family firms. Research in International Business and Finance, 33, 144–166. https://doi.org/10.1016/j.ribaf.2014.09.005

Pepis, S., & de Jong, P. (2019). Effects of Shariah-compliant business practices on long-term financial performance. Pacific Basin Finance Journal, 53(July 2018), 254–267.

Prabowo, M., & Simpson, J. (2011). Independent directors and firm performance in family controlled firms: Evidence from Indonesia. Asian-Pacific Economic Literature, 25(1), 121–132.

Ruefli, T. W., & Wiggins, R. R. (2003). Industry, corporate, and segment effects and business performance: A non-parametric approach. Strategic Management Journal, 24(9), 861–879.

Sarkar, J., & Sarkar, S. (2009). Multiple board appointments and firm performance in emerging economies: Evidence from India. Pacific-Basin Finance Journal, 17(2), 271-293.

Tan, K. M., Bany-Ariffin, A. N., Kamarudin, F., & Abdul Rahim, N. (2019). Does directors’ experience positively moderate the impact of board busyness on firm efficiency? Evidence from Asia-Pacific. Asia-Pacific Journal of Business Administration, 11(3), 232–250.

Tan, K. M., Kamarudin, F., Bany-Ariffin, A. N., & Abdul Rahim, N. (2020). Moderation of directors' education on board busyness-firm efficiency. Management Decision, 58(7), 1397-1423.

Tarkovska, V. (2012). Busy boards, corporate liquidity and financial risk: Evidence from UK panel data. European Financial Association, 1-36.

Trinh, V. Q., Aljughaiman, A. A., & Cao, N. D. (2020). Fetching better deals from creditors: Board busyness, agency relationships and the bank cost of debt. International Review of Financial Analysis, 69, 101472.

Trinugroho, I., Risfandy, T., Hanafi, M. M., & Sukmana, R. (2023). Busy commissioners and firm performance: Evidence from Indonesia. International Journal of Emerging Markets, 18(11), 5028–5048.

Wahyudi, I., & Sani, G. A. (2014). Interdependence between Islamic capital market and money market: Evidence from Indonesia. Borsa Istanbul Review, 14(1), 32–47.

Wahyudin, A., & Solikhah, B. (2017). Corporate governance implementation rating in Indonesia and its effects on financial performance. Corporate Governance (Bingley), 17(2), 250–265.

Xia, C., Zhang, X., Cao, C., & Xu, N. (2019). Independent director connectedness in China: An examination of the trade credit financing hypothesis. International Review of Economics & Finance, 63, 209-225.

Ye, D., Deng, J., Liu, Y., Szewczyk, S. H., & Chen, X. (2019). Does board gender diversity increase dividend payouts? Analysis of global evidence. Journal of Corporate Finance, 58, 1-26.

PlumX Metrics

How to Cite
Rahardjoputri, R., Risfandy, T., & Utami, A. D. (2024). BUSY COMMISSIONERS AND FIRM PERFORMANCE: DO SHARIAH-COMPLIANT FIRMS MATTER?. Journal of Islamic Monetary Economics and Finance, 10(1), 93-110. https://doi.org/10.21098/jimf.v10i1.1995

Most read articles by the same author(s)