With increasing interests in corporate governance across the globe associated with a limited attention to corporate governance practices in the Gulf Cooperation Countries (GCC), this study examines the relationship between internal corporate governance and firm value of Islamic banks listed in GCC countries from 2005 to 2019. The considerations of sharia principles as a main source of corporate governance are also examined. The main objective of this study is to empirically investigate the relationship between internal corporate governance mechanisms and firm performance of the Islamic banks listed in GCC countries for pre-crisis (2005 to 2007), during crisis (2008 to 2009), post-crisis (2010 to 2019), and pooled years (2005 to 2019) periods. Furthermore, to investigate the extent to which sharia values contribute to good corporate governance in Islamic banks listed in GCC countries.

This study employs quantitative regression analysis methods for a panel data from 26 Islamic banks across GCC counties, using fixed effects model and Generalised Method of Moments (GMM), while controlling for firm size, firm age, growth opportunities and financial
leverage. Firm performance is empirically measured using Return on Assets (ROA) and Tobin’s Q. The findings obtained from the fixed effects model suggest that only the corporate governance committee has a positive and significant relationship with the ROA of GCC
Islamic banks. The Sharia Supervisory Board (SSB) meetings and the disclosure of corporate social responsibility are positively and significantly related to Tobin’s Q of GCC Islamic banks. However, when using the GMM model to control for endogeneity problems and to reflect the dynamic nature of corporate governance, the empirical results indicate no statistically significant relationships between all internal corporate governance variables examined in this study and GCC Islamic bank performance as measured by ROA and Tobin's
Q. The findings indicate that the results of the corporate governance studies may be biased if they don't take into account the dynamic nature of corporate governance, and don't control for endogeneity problems. There is no material evidence that the global financial crisis 2008-2009 has negative impacts on GCC listed Islamic bank. This study discusses the results on the light of the GCC business environment and corporate governance practices in the region. Given the absence of empirical studies on corporate governance, this study is an attempt to fill the gap in this area and provides valuable recommendations to the professionals and
regulators.