Abstract

The study investigates the performance of Indonesian zakat organisations through the lens of Sharia good corporate governance (GCG). The proxies for GCG include the size and educational qualifications of the board of directors, the size and competence of the Sharia supervisory board, as well as the size of both the supervisory and management boards. Control variables in the analysis comprise size, age, and leverage. This research is significant for evaluating the implementation of Sharia GCG within Indonesian zakat institutions, particularly given the increasing demand for transparency and accountability in Zakat fund administration. The study focuses on the period 2018–2022, with leverage incorporated as a control variable. The sample consists of 75 Indonesian zakat organisations, encompassing both state agencies and private amil institutions registered with the Ministry of Religious Affairs, which enhances the representativeness of the findings. This quantitative investigation utilises financial statements and annual reports of zakat management entities covering the years 2019–2022. The population comprises organisations such as Baznas and LAZ. Findings indicate that neither the board of directors nor their educational background exerts a significant influence on organisational performance. Conversely, the size of the Sharia supervisory board, the supervisory board, and the management board demonstrates a positive and significant impact. Interestingly, the knowledge level of the Sharia supervisory board negatively affects performance, which limits the utility of size and age as control variables. Leverage is found to positively influence the performance of zakat organisations and is therefore maintained as a control variable. The implementation of Sharia GCG facilitates financial transparency and accountability in the collection and distribution of Zakat funds. Adopting Sharia GCG principles enables zakat organisations to make more informed decisions, strengthen stakeholder relations, and comply with relevant norms and standards. However, limitations such as constrained resources for assessing organisational performance and restricted access to data, compounded by the most recent data being only up to 2022, restrict the study’s scope.