The Influence of Islamic Corporate Governance and Islamic Corporate Social Responsibility on Reputation with Company Performance as a Variable Moderating (at Commercial Banks Sharia 2017-2021)

ABSTRACT


INTRODUCTION
An Islamic bank is a financial institution that has one of the functions of collecting funds from the public.The fundamental objective of the banking business is to obtain optimal profits by providing financial services to the public.The concept of Islamic banking itself is a bank based on the principles of partnership, fairness, transparency, and universality.Its implementation is a collaboration between capital owners and entrepreneurs to carry out business activities in the hope of achieving the desired profit (profit).Sharia Banks today must find ways to compete with Conventional Banks that are already so strong in various fields of performance and operations.(Damanik, 2019) Competition in the business world is not enough just to improve company performance the reputation of a company is also very important so it needs to be improved to face fierce business competition.The better the bank maintains its reputation, the better it will be able to retain shareholders, add customers to continue using its products and services, and be able to recruit employees who have potential.Reputation is any judgmental judgment on whether there is alignment between what the company says about itself and what society observes.So that in this study the company's performance is used as a moderation variable or intermediary variable to see and ensure if the company's performance increases it can increase the reputation of the company or vice versa.(Reskino, 2016, p. 172) Financial statements can reflect the performance of a company.Performance is a description of the company's condition that shows the ability to benefit from assets, capital, and debt and can reflect achievements by the company in a certain period.By measuring performance, it can be known the level of success of the company in running its business within a certain period.
The first factor used in this study to improve the reputation of a company is the implementation of Good Corporate Governance (GCG).Companies that implement GCG must publish company information and financial statements as a form of company transparency.GCG is very important as an effort by managers to convince investors that the funds invested are used appropriately and efficiently so that investors believe they will get a reasonable level of profit.Non-compliance with bank governance based on Sharia principles will cause various risks, one of which is reputational risk for Islamic bank companies themselves.
Failure to implement GCG in Islamic banks will hamper the growth of the Islamic financial services industry, not achieve overall financial system stability, reduce the level of public trust, and the failure of Islamic banking to implement GCG will not be able to place Islamic financial institutions on par with other international financial institutions.
The implementation of Islamic Corporate Governance (ICG) in Islamic banking will provide an assessment to the public that the company has carried out its operations by the principles of Islamic Sharia and there is no fraud and manipulation.The measurement of Islamic Corporate Governance factors in this study uses the value of ICG Self Assessment on the results obtained by each company.
The second factor that is thought to increase reputation is the disclosure of social responsibility known as Corporate Social Responsibility (CSR).Islamic Corporate Social Responsibility (ICSR) is a voluntary disclosure that a company may disclose in its annual report.CSR is the process of communicating the social and environmental impacts of a company's economic activities to certain groups that have interests and to society as a whole.(Wardani, 2016, p. 38) ICSR is developed and adapted by Islamic business principles and ethics with a term known as Islamic Corporate Social Responsibility (ICSR).The application of ICSR will affect the public's impression of the company will be good and can increase the attractiveness of investor interest to invest.The measurement of Islamic Corporate Social Responsibility (ICSR) factors in this study is proxied by the disclosure value of the Islamic Social Reporting (ISR) index obtained from each company.ISR disclosure emphasizes transactions that are by the Qur'an and Hadith, including disclosure of company transactions related to transactions that have been free from usury, speculation, and gharar elements, zakat disclosure, sharia compliance status and social aspects such as assodaqoh, waqf, qordulhasan to the disclosure of worship within the company.
So it can be concluded that Islamic Banking is not fully capable of carrying out ICG and ICSR activities by the proper law because there are still many irregularities that occur in Islamic banking.Thus, it must continue to make various efforts to improve the reputation and trust of stakeholders in Islamic banks.
Many studies have developed the disclosure that ICG has a close relationship with ICSR in companies.A study conducted by Reistiawati Utami and Meina Wulansari Yusniar in 2020, showed the results that ICG has a significant positive influence on the company's reputation, but in contrast to the results of research conducted by Syurmita and Miranda Junisar Fircarina in 2020 which showed that ICG did not have a significant influence on the company's reputation in line with research conducted by Gustani and Nono Hartono in 2019 that ICG does not have a significant influence on the company's reputation.In addition, research conducted by Reistiawati Utami and Meina Wulansari Yusniar in 2020 obtained research results that there is a negative and insignificant influence of ICSR factors on the company's reputation.Meanwhile, research conducted by Syurmita and Miranda Junisar Fircarina in 2020, and research by Arshad in 2012 obtained research results that there is a positive and significant influence of ICSR factors on company reputation.
Research on Islamic Banks as Islamic financial institutions, in this study, used two independent variables with Islamic measurements and concepts, namely Islamic Corporate Governance and Islamic Corporate Social Responsibility.In previous studies, each of them had different results that gave rise to research gaps, in previous studies there were not many who measured the relationship of financial performance to the company's reputation as a moderation variable, which motivated researchers to understand deeply.The research conducted is more up-to-date, namely over 5 years in 2017-2021 with purposive sampling techniques of all Sharia Commercial Banks registered with the OJK.

RESEARCH METHOD
This research approach is descriptive statistical research which means part of statistics that summarizes, presents, and describes data in an easy-to-read form to provide more complete and easy-to-understand information.This descriptive statistic only deals with things that describe information about data or situations, in other words looking at the general picture of the data obtained from the object under study through sample or population data as it is without conducting analysis and making conclusions that are generally applicable.(Sugiono, 2010, p. 104) In this study, researchers tried to analyze Islamic Corporate Governance and Islamic Corporate Social Responsibility on reputation with performance as a moderation variable.
The method used in data collection in this study is the documentation method.This method uses secondary data in the form of annual reports of Islamic banks which can be downloaded through the websites of each Islamic bank in Indonesia during the research period, namely 2017-2021.
A sample is a portion of a member of the population taken using sampling techniques.Here the sample must be able to reflect the state of the population, meaning that the conclusions of the research results raised from the sample must be conclusions on the population.Sample size or the number of samples taken is important if researchers conduct research that uses qualitative analysis.Members of the population who are coincidentally encountered by the researcher and by the provisions of the researcher.(al., 2020, p. 362) The sampling technique in this study uses the purposive sampling method to obtain samples by the specified criteria, 8 Sharia commercial banks have met the criteria to be sampled in this study.
The data processing technique in this study uses an application for quantitative data processing, namely e-views-12.The use of quantitative data in the form of numbers on an annual scale will make it easier to input data to get reliable and accountable output results.
The data analysis used in this study is descriptive, classical assumption test, panel data regression analysis technique, panel data regression model selection technique, statistical test, and MRA interaction test.

RESULTS AND DISCUSSION The Influence of Islamic Corporate Governance (ICG) on Corporate Reputation
The ICG Panel Coefficient on Reputation has a value of 11.783054, indicating that ICG has a positive influence on Reputation.The t-statistic value of 2.842828 > 1.96 which shows that ICG has a significant positive influence on the reputation of Islamic Commercial Banks.
Based on the results of Table 4.10 the probability value of the ICG variable of 0.0081 where the value is smaller than the significant value of 0.05 (< 5%), then Ho1 is rejected and Ha1 is accepted.From the results of this study, it can be concluded that the variables of Islamic Corporate Governance (ICG) have a significant influence on the reputation of Islamic Commercial Banks.
Thus, the results of this study are not in line with the results of research conducted by Syurmita, et.al (2020) with the research title The Influence of Zakat, Islamic Corporate Social Responsibility and the Application of Sharia Business Good Governance on the Reputation and Performance of Sharia Commercial Banks in Indonesia, showing that ICG does not have a significant effect on the company's reputation.
Thus, this result means that Islamic banks have a good ICG disclosure rate so they will have a good reputation as well.This is because the products owned are by Sharia principles.Likewise, aryawans apply sharia principles in carrying out their activities, such as wearing polite and not revealing clothing.ICG disclosure is the company's responsibility to disclose and assess for itself the corporate governance that has been carried out to create a sustainable development of the bank properly.This certainly does not escape the role of the Sharia Supervisory Board (DPS) which takes part in supervising the implementation of ICG in Islamic banks.The better the role of DPS, it can ensure that the bank has implemented Sharia principles by applicable rules and regulations.

The Effect of Islamic Corporate Social Responsibility (ICSR) on Corporate Reputation
The ICSR panel data coefficient on Reputation has a value of -18.24842, indicating the negative influence of ICSR on Reputation.The t-statistic value of -0.758783 < 1.96 which shows that ICSR has a negative insignificant effect on the reputation of Islamic Commercial Banks.
Based on the results of Table 4.10, the probability value of the Islamic Corporate Social Responsibility (ICSR) variable is 0.4541.the value is greater than the significant value of 0.05 (< 5%), then Ho2 is accepted and Ha2 is rejected.This result is not in line with research conducted by Aprilisn, et.al (2019) entitled The Influence of Islamic Corporate Social Responsibility (ICSR) on Corporate Reputation, showing that ICSR has a significant positive effect on company reputation.This result proves that Islamic banks that have a low level of ICSR leverage have a low reputation.The factor of disclosing social responsibility is the duty of banks to create a sustainable economy.The image or reputation formed by the company cannot be engineered, because a positive corporate reputation will arise with the efforts carried out by the company, one of which is with company transparency and good communication.Meanwhile, if the company's reputation is bad, it will have an impact on the low number of investors who will work with the bank, so the bank must be responsive quickly to increase its reputation.
The unsupported hypothesis in this study is suspected because there are still many companies that have not maximized the disclosure and implementation of ICSR in the corporate social environment so the level of trust in Sharia Commercial Banks is also low.If Islamic banking can maximize ICSR disclosure and show concern for the social environment, stakeholders will assess the company well, so that support from the public will strengthen the reputation of Islamic Commercial Banks. of 0.3483 was obtained.Thus, the ICG variable moderated by Performance cannot strengthen the reputation of Islamic Commercial Banks.
4. Based on the results of the t-statistical test on the variable Islamic corporate Social Responsibility (ICSR) on the Reputation of Sharia Commercial Banks with Performance as a moderation variable, a probability value of 0.3728 was obtained.Thus, the ICSR variable moderated by Performance cannot strengthen the reputation of Islamic commercial banks.The Islamic corporate Social Responsibility (ICSR) program is not used to seek profit but to prioritize value for the Islamic Banking body.Future researchers who will conduct research with the same variables can use different research methods to analyze the influence of Islamic Corporate Governance and Islamic Corporate Social Responsibility on Islamic Banking.Future research can also use measurement tools that are different from this study.Researchers can also expand the research sample by not only Sharia Commercial Banks but can also add Sharia Business Units as samples.