Board Director’s Age and Compensation on Islamic Banking Risk Taking

Abstract

. The purpose of this study is to determine the effect of board of director’s age and compensation on the level of Islamic banking risk-taking in Indonesia. The population in this study is Islamic Banking in Indonesia. Sample selection using purposive sampling method with 39 annual reports of Islamic banks in Indonesia during 2014 - 2018. This study uses multiple linear regression test. The results showed evidence that the age of directors and directors' compensation have a significant negative effect on company risk-taking. Meanwhile, control variables namely company size and ROA showed no significant effect on company risk-taking. So, this study cannot prove the influence of the size of the company which is proxied by the total value of the company's assets and profitability which is proxied by the value of the ROA ratio on the level of risk-taking in Islamic banking in Indonesia. standard deviation. Based on data from 39 research samples, the RISK variable which is a proxy of corporate risk-taking has an average value of 0.580, a minimum value of 0.059, and a maximum value of 2.036. These results indicate that the level of risk taken by Islamic banks during the period 2014 - 2018 is fairly high with the meaning of risk-averse are 58 percent, and risk-takers are 42 percent.