THE EFFECT OF THE GOOD CORPORATE GOVERNANCE

PRINCIPLES ON WAQIF TRUST

Islamic Social Finance Assignment

Lecturer: Dr. Ir. Ascarya MBA, MSc

Farhan

Tazkia University, Bogor, Indonesia, farhanhadrawi32@gmail.com

1st Semester, 2022/2023

Abstract
Purpose – The purpose of this study is to analyze the effect of applying good corporate
governance of waqf institutions in Indonesia on wakif trust. The sample of this research is
people who have done waqf in waqf institutions. There were 120 respondents who were
collected as the research sample.

Design/methodology/approach – This study uses a quantitative method, with a Partial Least

Square (SEM) structural equation modeling through testing structural models and
measurements. Questionnaires were distributed to respondents online via WhatsApp and
Instagram which are distributed via Google Form.

Findings – The results of this study are the variables of transparency, accountability, and
responsibility has a significant effect on wakif trust. Whereas independent variables and fairness
have no significant effect on wakif trust.
Research implications – with the large potential of waqf, waqf institutions must improve their
institutional system to absorb even greater waqf, with this research it is hoped that it can help
with this.
Keywords: Islamic Social Finance, Waqf, SEM, Good Corporate Governance, Transparency,
Accountability, Responsibility, Independence, Fairness.
Article Type: Research Paper

1. Introduction
Indonesia is a country with the largest Muslim population in the world. There are 231
million Muslims in Indonesia or about 86.7% of the entire population in Indonesia. This number
is expected to increase the potential of Islamic economics (Hidayat & Darmadi, 2019). Among
the various instruments in Islamic economics, one of which has been developed in Indonesia is
waqf. Waqf aims to improve welfare and build civilization. The progress of Islamic culture in the
past cannot be separated from the role of waqf (Syamsuri, et al., 2019)
Waqf issues have gained prominence as a result of contemporary scholars' efforts to
reveal the benefits of Waqf practices, including their applications in modern society, as well as to
address associated challenges. Because such an initiative requires a massive amount of money
that the government cannot fully fund, the majority of the reviewed research emphasized that
cash Waqf is an efficient instrument that can be an alternative for poverty alleviatio (Atan &
Johari, 2017).
Waqf is one of the tabarru contracts recommended in religion (Zauro, 2020). The waqf
has been widely practiced since the prophet Muhammad era. In recent years, the popularity of
cash waqf has exploded in Muslim countries (Kachkar, 2017). Waqf can be defined in economic
terms as an investment of financial and other resources into productive and future assets to create
income for future consumption by individuals or society as a whole (Syamsuri, et al., 2019).
Waqf has played an important role in uplifting Muslims, expanding their influence into the
political, social, and economic areas (Ahmad, 2015). Waqf serves as a stabilizing element,
providing a competitive advantage to the Muslim world and supporting the articulation of
Islamic economic power (Fanani, 2021). As a result, Waqf is an unusual combination of savings
and investment. Because of its eternal nature, the waqf property is allegedly continuously
increasing and should not be reduced (BWI, 2018).
The potential for cash waqf in Indonesia is very large, reaching IDR 180 trillion.
However, the realization of waqf was only able to reach Rp. 860 billion. The realization of waqf
in Indonesia is still very far from the total potential that exists (Widianti, 2022). The problem
with the large potential of waqf is reduced by several problems such as the accumulation of waqf
funds, the decrease in the value of money due to inflation and the loss of waqf assets due to
mismanagement. The problem of waqf is also exacerbated by the management of waqf
institutions that do not have enough professional human resources, causing many waqf assets to
be passive because they are not developed or productive. (Sarasi, Farras, & Putri, 2022).
Optimizing waqf requires the existence of a series of mechanisms that can control and
direct so that operational activities can run according to the expectations of many parties, so the
need for governance practices becomes increasingly important. Good Corporate Governance
(GCG) is good governance in an organization that is based on professional ethics in business
(Hasbar & Kurnia S, 2016). GCG as a set of rules governing relationships between shareholders,
corporate managers, creditors, governments, employees and other internal and external interest
holders relating to their rights and obligations. Corporate governance arises from the interests of
the company to ensure the principal/investors that the funds invested are used appropriately and
efficiently (Mahrani & Soewarno, 2018).
Research on the effect of GCG on the firm performance has been conducted extensively.
(Jhonson & Meckling, 2014) argue that one way to reduce agency conflict is by implementing
Good Corporate Gorvenance. The better corporate governance, the more productive managers
actions to improve firm performance. In the application of good corporate governance there is
transparency principle. One form of transparency is the widespread disclosure of information
about the firm's social responsibility. The application of the principles of Good Corporate
Governance toward family companies using GCG guidelines is issued by (KNKG, 2011)
containing 5 principles, namely transparency, accountability, accountability, fairness and
independence (Tobing, Arkeman, Sanim, & Nuryartono, 2013).
Given the large potential of waqf that can still be maximized for its reception and
distribution, it is necessary to renew the waqf receiving institutions in Indonesia. Based on the
description that has been disclosed, the authors are interested in examining the effect of the Good
Corporate Governance principle on waqif trust.
2. Literature Review
2.1 Waqf
Linguistically, waqf comes from the Arabic word "Waqf" which means "al-Habs". It is a word in
the form of masdar (infinitive noun) which basically means to hold back, stop, or be silent. In
terms of waqf, it is defined as the detention of property rights to material objects for the purpose
of giving alms or its benefits (Abdul Shukor, 2019). Waqf is a voluntary act of charity that
comes under the general terms of sadaqah and infaq (Sulistyowati, Sukmana, Ratnasari, Ascarya,
& Widiastuti, 2022)
Waqf is studied as an Islamic legal concept in both Arabic and English literature
(Sulistyowati, Sukmana, Ratnasari, Ascarya, & Widiastuti, 2022). The welfare offered by the
concept of waqf appears not only to be enjoyed by Islamic civilization but also others. Waqf
plays an efficient role in optimizing the elements of productivity. It has the maximum ability to
reduce unemployment so that it can overcome economic stagnation (Amrullah, Jamal, Cahyo,
Khakim, & Zahro, 2022).

As mentioned in the hadiths, the evidence can be gleaned from the saying of the Prophet
(PBUH): “When a human being dies, his work for God comes to an end except for three: a
lasting charity, the knowledge that benefits others, and a good child who calls on God for His
favour” (Sahih Muslim, Book of Wills, Hadıth No. 4005) (Ramli, Fahmi, Darus, & Rasit, 2019).

2.2 Good Corporate Governance

Good Corporate Governance (GCG) is a concept of good governance practices within an
institution, in which there are principles of transparency, accountability, responsibility,
independence and fairness that need to be implemented by an institution. The Good Corporate
Governance (GCG) system is used to liaise between company management, the board of
directors, shareholders and other stakeholders (Tobing, Arkeman, Sanim, & Nuryartono, 2013).
First, transparency is the disclosure and provision of information that is adequate and easily
accessible to stakeholders. Transparency is necessary for an organization to run objectively and
healthily (KNKG, 2011). Second, accountability is an element of clarity of function within the
organization and how to account for it. Sharia organizational actors must be able to account for
their performance in a transparent and fair manner. For this reason, the company must be
managed properly, measurably and in accordance with the interests of the organization while
taking into account the stakeholders. Accountability is a prerequisite needed to achieve
sustainable performance (KNKG, 2011). The third is responsibility, the organization must
comply with laws and regulations and sharia provisions, and carry out responsibilities towards
society and the environment. With this responsibility, sharia entities can be maintained in the
long term and receive recognition as good sharia entities (good corporate citizens) (KNKG,
2011). Fourth, Independence in implementing the principles of Good Corporate Governance,
sharia entities must be managed independently so that each company organ does not dominate
the other and cannot be intervened by any party. Independence is related to consistency which
must stick to the truth even though it has to face risks (KNKG, 2011). Fifth, Fairness is that in
carrying out its activities, sharia entities must always pay attention to the interests of
stakeholders based on the principles of fairness and equality. Every decision, both on an
individual and institutional scale, should be made in accordance with fairness and equality in
accordance with what has been in force, and not decided based on likes or dislikes. (KNKG,
2011).
Berikut ini beberapa penelitian terdahulu yang menjadi sumber informasi dan
dijadikan acuan dalam melakukan penelitian adalah sebagai berikut:

Table 1 Summary of Previous Research

No Penulis/Tahun Judul Penelitian Variabel/Model Hasil Penelitian

1 (Tobing, Pengaruh Penerapan Akuntabilitas Variabel akuntabilitas
Arkeman, Good Corporate pengelolaan wakaf tunai pengelolaan wakaf tunai
Sanim, & Governance terhadap dan Peran nadzir. dan variabel peran nadzir
Nuryartono, Tingkat Kesehatan dan berpengaruh positif dan
Daya Saing di signifikan terhadap tingkat
2013)
Perbankan Indonesia kepercayaan muwakif

2 (Sulistyowati, Issues and challenges of This qualitative study capacity building

Sukmana, waqf in providing uses structured in-depth program (CBP),
healthcare resources interviews with 12 hybrid waqf scheme, big
Ratnasari,
Ascarya, & respondents to generate data connectivity, specific
valuable insights and legal framework,
Widiastuti,
thoughts in order to refocusing and
2022)
frame recommendations. reallocating of resources
for the health sector
during and after the
pandemic
3 (Abdul Trust on awqaf institutions: Quantitative research Findings show that integrity
Shukor, evidence from Malaysia using survey and reputation of awqaf
questionnaire was institutions have direct
2019) impact on endowers’ trust on
conducted. A total of
awqaf institution, which
377 completed survey consequently lead to
questionnaires were endowers’ intention to endow
received and analyzed cash waqf.
using structural equation
modeling.
4 (Fanani, 2021) The Contribution of Waqf Qualitative research digital Waqf system has a
on Poverty Alleviation crucial role and potentially
through Digital Platforms: contributes to the sustainable
A Case of Indonesia economic development of a
developing country,
particularly Indonesia. This
 study can be used in
financial inclusion through the
application of digital Waqf to
alleviate poverty.

5 (Kachkar, 2017) Towards the establishment Qualitative method is used Empirical studies have shown
of cash waqf microfinance in this research. An that many refugees are
fund for refugees extensive review of the equipped with marketable
literature has been skills and talents that can be
conducted. Latest literature utilised to improve their socio-
on refugees, microfinance economic situations.
has been critically examined
beside the current
cash waqf models.

6 (Ramli, Fahmi, Performance measurement Drawing from the Balance the governance of waqf entity
Darus, & Rasit, system in the governance of Scorecard (BSC) framework can be achieved through a
waqf institution: a concept and Islamic concept, the sound internal control system,
2019)
note paper aims to study and which suggests the
analyse relevant literature implementation of a shariah-
on the performance based performance
measurements for waqf measurement system that
institution and to develop a incorporates both qualitative
holistic performance and quantitative dimensions to
measurement model suitable examine its current stance
to assess the performance of better.
waqf institutions.

7 (Khaled Nour Cash waqf from the
Aldeen, Inayah millennials’ perspective: aquestionnaires were
Swasti Ratih, case of Indonesia
Risa Sari
Pertiwi, 2022)
8 Ascarya (2020) Developing cash waqf
models for Baitul Maal wat analytic network process
Tamwil as integrated
Self-structured high level of awareness about
cash waqf among millennials
distributed in Java Island to in Indonesia. The
collect results further reveal a lower
the data. The data were willingness level to contribute
examined by employing to cash waqf of the sample
suitable statistical tools. population as compared
Besides, post-interview fact- to their level of awareness
finding about cash waqf. Moreover,
was conducted with cash cash waqf promotions must
waqf experts from different focus on delivering a deeper
related institutions in understanding about the
Indonesia to reach a more concept and how it differs
in-depth from other types of Islamic
understanding about cash philanthropy. The results
waqf issues. suggest that waqf trustees in
the country must be more
transparent. Moreover, the
Indonesian Waqf Board
should implement stricter rules
to monitor waqf trustees.
This study uses Delphi and the best cash waqf model for
BMT is “BMT as Nazir (waqf
methods, with manager) and
 Islamic social and three groups of relevant also as cash waqf receiver
commercial microfinance respondents, including Lembaga Keuangan Syariah
experts (academic), BMT Penerima Wakaf Uang
(LKSPWU)”, followed by
practitioners and regulators.
“BMT Association as
representative Nazir of several
certified BMTs”. Moreover,
“long-term investment
deposit” is the best to account
cash waqf in the BMT balance
sheet. With regard to
financing, the most
preferred one is “financing to
regular Micro and Small
Enterprises” of BMT
members.
9 (Siraj, Riyad, Potential Solutions to business model that focuses this study provides alternative
Sheik, Jama, & Financing Problems among on the lower-middle-class solutions to the problems faced
by BMT in their efforts to
Redzuan, 2021) the Poor: A Case of Baitul economy and the MSME improve financial inclusion in
Maal Wa Tamwil (BMT) in sector
Indonesia.
Indonesia

10 (Syamsuri, et Existence of Waqf in This article is a conceptual waqf can contribute and
al., 2019) Enhancing of Indonesia design study that aims to provide solutions to the
Financial Stability in Era find out in-depth or the stability of the financial
system in Indonesia by
Industrial Revolution 4.0: A extent to which the role of
optimizing one indicator of the
Conceptual Design waqf contributes to financial stability system,
improving the system of which is a reliable and safe
national financial stability. payment system.
The research method used is
a descriptive qualitative
study of literature analysis
and documentation.

3. Methodology
3.1 Methods
This research is a quantitative research (Siraj, Riyad, Sheik, Jama, & Redzuan, 2021). Research
with this quantitative method is used to examine the effect of the independent variable, namely
the principles of Good Corporate Governance on the dependent variable, namely the trust of
wakif (Rasoolimanesh, Seyfi, Rather , & Hall, 2022).
3.2 Data

The data used in this study include primary data and secondary data. Data primer
diperoleh langsung dari orang yang berwakaf di lembaga wakaf di Indonesia menggunakan
instrumen kuesioner sedangkan Data sekunder dalam penelitian ini diperoleh melalui website
resmi Badan Wakaf Indonesia jurnal dan buku terkait dengan wakaf (Ginting, Chandra, Miran, &
Yusriadi, 2022). The population in this study are all wakifs (people who endow in waqf
institutions in Indonesia. The wakifs collected in this study are in waqf institutions as follows:

The sample in this study is a community that has donated in waqf institutions in
Indonesia, the data was obtained using a purposive sampling method (Tongco, 2007). In this
study, the number of wakifs who have donated waqf is not known with certainty, so to calculate
the minimum number of samples needed, the Lemeshow formula is used for unknown
populations. (Ginting, Chandra, Miran, & Yusriadi, 2022). With the following formula.

z a pq
n= 2
L

where
n = Minimum number of samples required
Zα = Standard value of distribution (value
α=5%= 1,96)
p = Prevalence of outcome, because the data has not been obtained, then 50% is used
q = 1-P
L = Accuracy level at 10%
Based on the formula above, the number of samples can be calculated as follows:
( 1,96 )2 ( 0,5 ) (1−0,5)
n= 2
( 0,1)

𝑛= 96,04
So based on this formula, the obtained is 96.04 or 97 people.

3.3 Model Development

In examining the effect of the principle application of Good Corporate Governance on

wakif trust, it will be analyzed using the Partial Least Squares - Structural Equation Modeling
(PLS-SEM) approach and the data will be processed using the SmartPLS application. PLS-SEM
is a multivariate analysis method for analyzing many independent and dependent variables
simultaneously. PLS-SEM is used because PLS-SEM has a complex structural model (Hair,
Hult, Ringle, & Sarstedt, 2017). The use of PLS-SEM also functions to expand existing theory
with the advantage of being able to estimate measurement models and structural models
simultaneously (Hair J. F., 2014). In PLS-SEM, variables/constructs can be formative or
reflective. PLS-SEM analysis is also a method that can analyze both small and large samples
(Chin, 2000)

3.4 Steps of Research

The PLS-SEM analysis method consists of 2 analysis processes, namely: (i) analysis of the
measurement model (outer model), and (ii) analysis of the structural model/inner model. In the
analysis of the measurement model consists of a validity test and reliability test. Meanwhile, the
structural model analysis consists of analysis; R-square, Q-square / predictive relevance, direct
effect, and model fit (Hair J. F., 2014). Where the series of processes will be explained as follow:

Measurement Model Analysis / Outer Model

Convergent Validity Test

Convergent validity is a series of measurements to ensure that each indicator used in a variable is
strong (Hair, Hult, Ringle, & Sarstedt, 2017)). To be sure, by showing the outer loading value of
each indicator on the variable it measures, it must be > 0.7 (Vinzi, Trinchera, & Amato, 2010)
and also the average variance extracted (AVE) value of each variable must also be > 0.5 (Chin,
2000).

Discriminant validity

Discriminant validity is a test to ensure that a research construct can be different from other
constructs (Hair, Hult, Ringle, & Sarstedt, 2017). Evaluation of this reflective model through
Fornell Larcker and Cross Loading values. Where the Fornell Larcker value of a variable to the
variable itself cannot be smaller than the Fornell Larcker value of the variable to other variables.
The Cross Loading value of each variable measurement indicator for each variable it measures
cannot be smaller than the indicator value for other variables.

Reliability Test

Testing through reliability is used to assess the reliability of a variable as measured by each
indicator (Hair, Hult, Ringle, & Sarstedt, 2017). Each variable must have a Composite
Reliability, rho_A, and Cronbach's Alpha value of more than 0.7 to be classified as reliable
(Vinzi, Trinchera, & Amato, 2010).

Structural Model Analysis/Inner Model/Fit Model

Model Fit analysis was carried out to find out how well the model was in the research being
conducted (Hair, Hult, Ringle, & Sarstedt, 2017). The measurements used in this study are the
Root Mean Square Residual (SRMR) and Normal Fit Index (NFI) values. In this model, it must
have an SRMR value of <0.1 or 0.08 so that it can be classified as fit/good (Hair, et al., 2017).
Then for NFI values ranging from 0 - 1, the closer to 1 the better the research model (Hair, Hult,
Ringle, & Sarstedt, 2017).
R-Square

Testing through R-Square is a measure of the value of the endogenous variable (Y) to be
influenced by the exogenous variable (X) in the study (Hair, Hult, Ringle, & Sarstedt, 2017). If
the value ranges from 0 – 1. If the value; (i) R2 ≥ 0.67, the model is classified as
substantial/strong, (ii) R2 ≥ 0.33, the model is moderate/moderate, and (iii) R2 ≥ 0.19 or less, the
model is classified as weak (Chin, 2000). If the exogenous variable is more than one, then the
value seen is R Square Adjusted (Vinzi, Trinchera, & Amato, 2010).

Q-Square (Predictive Relevance)

Testing through Q-Square or predictive relevance is used to determine predictive capability with
a blindfolding procedure (Vinzi, Trinchera, & Amato, 2010). The references used are; Q2
reaches 0.02, it is classified as small, Q2 reaches 0.15, it is classified as moderate, and if Q2
reaches 0.35, it is classified as large.

Direct Influence

The use of direct effect analysis is to test the hypothesis of the direct effect of an exogenous
variable on endogenous variables. In this study tested 5 hypotheses. Analysis of a hypothesis can
be done based on 2 references, namely; (i) the value of the path coefficients / path coefficients to
determine whether there is a negative or positive relationship, (ii) the value of P / P-Values to
determine a significant or insignificant effect. If the path coefficient value is positive, then the
relationship between the exogenous variables influencing the endogenous variables is directly
proportional. Vice versa, if the path coefficient value is negative, then the relationship of
exogenous variables in influencing endogenous variables is inversely proportional (Sarstedt,
Ringle, & Hair, 2017). Furthermore, the measurement for the P value, if <0.05 indicates a
significant influence. If the P value > 0.05, it indicates an insignificant effect (Vinzi, Trinchera,
& Amato, 2010).

Results and Analysis

Respondent Demographics
Respondents in this study were wakifs, with a total of 120 respondents. Classification of
respondents by gender, age, last education, and place of waqf waqf institution.

Table 2 Characteristics of Respondents

Demographics Amount percentage

Gender
Man 65 54,2%
Woman 55 45,8%
Age
 <20 Years 2 1,7%
21-30 Years 88 73,3%
31-40 Years 29 24,2%
41-50 Years 1 0,8%
>50 Years
Last education
SD and SMP 2 1,7%
SENIOR HIGH SCHOOL 58 48,3%
Diploma 9 7,5%
Bachelor 48 40%
Masters or Doctoral 3 2,5%
Ever Waqf in the Institution
Badan Wakaf Indonesia 12 10%
Dompet Dhuafa 25 20,8%
Daarut Tauhiid 22 18,3%
Global Wakaf 8 6,7%
Rumah Zakat 31 25,8%
LAZIS Muhammadiyah 4 3,3%
LAZIS Nahdatul Ulama 9 7,5%
LAZ Nahwa nur 1 0,8%
Kitabisa 3 2,4%
Rumah Tahfidz 1 0,8%
PUSPAS UNAIR 1 0,8%
Yayasan Baitul Quran Al-Nazran 1 0,8%
Greenwaqf 1 0,8%
Yayasan Cinta Dakwah Indonesia 1 0,8%

Based on table above, there are respondents who have donated at Rumah Zakat, which
dominates at 25.8%. Followed by the Dompet Dhuafa institution 20.8%, Daarut Tauhiid 18.3%,
Indonesian Waqf Board 10%, and the remaining 25.1% are in several waqf institutions in
Indonesia.

Measurement Model Analysis (Measurement / Outer Model)

Convergent Validity Test

Convergent validity is a series of measurements to ensure that each indicator used in a variable is
strong (Hair, Hult, Ringle, & Sarstedt, 2017). To be sure, that is by showing the outer loading
value of each indicator on the variable being measured must be > 0.7 (Vinzi, et al., 2010) and

also the average variance extracted

Picture(AVE) valueResearch
1 PLS-SEM of eachModel
variable must also be > 0.5 (Chin,
2000).

Table 3 Outer Loading and AVE

X5.2 0,706
X5.3 0,748
X5.4 0,788
Kepercayaan Wakif (Y) 0,505
Y1 0,702
Y2 0,706
Y3 0,701
Y4 0,715
Y5 0,718
Y6 0,705
Y7 0,729
Source: Data processed using SmartPLS, 2023
Picture 2 PLS-SEM
Research Model
Based on table 3 it can be stated that each indicator and variable in this study has passed the
convergent validity test. Because the outer loading value of each indicator and the AVE value of
each variable are in accordance with the convergent validity requirements.

Discriminant Validity

Discriminant validity is a test to ensure that a research construct can be different from other
constructs (Hair, Hult, Ringle, & Sarstedt, 2017). Evaluation of this reflective model through
Fornell Larcker and Cross Loading values. Where the Fornell Larcker value of a variable to the
variable itself cannot be smaller than the Fornell Larcker value of the variable to other variables.
The Cross Loading value of each variable measurement indicator for each variable it measures
cannot be smaller than the indicator value for other variables.

Table 4 Fornell Lacker Criterion

X1 X2 X3 X4 X5 Y
X1 0,734
X2 0,505 0,728
X3 0,527 0,530 0,726
X4 0,617 0,520 0,540 0,750
X5 0,633 0,604 0,604 0,585 0,759
Y 0,634 0,612 0,670 0,595 0,603 0,711
Source: Data processed using SmartPLS, 2023

Based on table 3, it can be stated that all variables in this study are in accordance with the
requirements of discriminant validity. Because the Fornell Larcker value of all variables on the
variable itself is greater than the Fornell Larcker value of the variable on other variables.
Likewise for the Cross Loading value in table 4.

Table 5 Cross Loading

X1 X2 X3 X4 X5 Y
X1.1 0,713 0,220 0,314 0,410 0,367 0,380
X1.2 0,709 0,412 0,435 0,445 0,517 0,478
X1.3 0,738 0,417 0,298 0,486 0,491 0,455
X1.4 0,775 0,407 0,476 0,468 0,469 0,529
X2.1 0,340 0,727 0,451 0,405 0,426 0,514
X2.2 0,415 0,738 0,342 0,347 0,397 0,429
X2.3 0,314 0,725 0,329 0,343 0,406 0,371
X2.4 0,401 0,723 0,402 0,409 0,525 0,446
X3.1 0,393 0,274 0,728 0,433 0,446 0,414
X3.2 0,294 0,326 0,715 0,317 0,442 0,493
X3.3 0,405 0,504 0,741 0,429 0,460 0,561
X3.4 0,441 0,403 0,718 0,392 0,403 0,455
X4.1 0,457 0,312 0,430 0,737 0,538 0,452
X4.2 0,523 0,470 0,477 0,836 0,524 0,495
X4.3 0,466 0,404 0,371 0,707 0,352 0,478
X4.4 0,384 0,365 0,320 0,714 0,306 0,325
X5.1 0,526 0,475 0,541 0,487 0,792 0,510
X5.2 0,399 0,398 0,412 0,334 0,706 0,376
X5.3 0,455 0,424 0,366 0,449 0,748 0,392
X5.4 0,523 0,519 0,489 0,485 0,788 0,522
Y1.1 0,474 0,438 0,439 0,444 0,415 0,702
Y1.2 0,313 0,276 0,506 0,380 0,378 0,706
Y1.3 0,476 0,513 0,596 0,467 0,515 0,701
Y1.4 0,435 0,448 0,474 0,393 0,339 0,715
Y1.5 0,469 0,370 0,433 0,405 0,392 0,718
Y1.6 0,471 0,439 0,449 0,430 0,424 0,705
 Y1.7 0,489 0,519 0,421 0,425 0,505 0,729
Source: Data processed using SmartPLS, 2023

Reliability Test

Testing through reliability is used to assess the reliability of a variable as measured by each
indicator (Hair, Hult, Ringle, & Sarstedt, 2017). Each variable must have a Composite
Reliability, rho_A, and Cronbach's Alpha value of more than 0.7 to be classified as reliable
(Vinzi, Trinchera, & Amato, 2010).

Table 6 Cronbach's Alpha, rho_A, & Composite Reliability

Reliabilitas
Cronbach's Alpha rho_A
Komposit
X1 0,717 0,722 0,824
X2 0,708 0,709 0,819
X3 0,702 0,705 0,816
X4 0,742 0,750 0,837
X5 0,757 0,770 0,844
Y 0,837 0,839 0,877
Source: Data processed using SmartPLS, 2023
Based on table 5, it can be stated that each construct in this study can be said to be reliable.
Because the Composite Reliability, rho_A, and Cronbach's Alpha values are above 0.7.

Structural Model Analysis (Inner Model)

Fit Model Analysis

Model Fit analysis was carried out to find out how well the model was in the research conducted
(Hair, Hult, Ringle, & Sarstedt, 2017). The measurements used in this study are the Root Mean
Square Residual (SRMR) and Normal Fit Index (NFI) values.

In this model, it must have an SRMR value of <0.1 or 0.08 so that it can be classified as fit/good
( (Hair, Hult, Ringle, & Sarstedt, 2017). Where the SRMR in this study shows a value of 0.086 in
the saturated and estimated models. This means that the model in this study can be considered fit
with the data.

Then for NFI values ranging from 0 - 1, the closer to 1 the better the research model (Hair, Hult,
Ringle, & Sarstedt, 2017). Where the NFI value of this study is 0.591. In other words, the model
in this study did not meet the fit model criteria.

Table 7 Model Fit

Saturated Model Estimation Model

SRMR 0,086 0,086
d_ULS 2,828 2,828
d_G 1,010 1,010
 Chi-Square 643,309 643,309
NFI 0,592 0,592
Source: Data processed using SmartPLS, 2023
R-Square

Testing through R-Square is a measure of the value of the endogenous variable (Y) to be
influenced by the exogenous variable (X) in research (Vinzi, Trinchera, & Amato, 2010) (Hair,
Hult, Ringle, & Sarstedt, 2017). If the value ranges from 0 – 1. If the value; (i) R2 ≥ 0.67, the
model is classified as substantial/strong, (ii) R2 ≥ 0.33, the model is moderate/moderate, and (iii)
R2 ≥ 0.19 or less, the model is classified as weak (Chin, 2000) . If there is more than one
exogenous variable, the value seen is R Square Adjusted (Vinzi, et al., 2010).

Table 8 R-Square

R Square R Square Adjusted

Y 0,612 0,595
Source: Data processed using SmartPLS, 2023

Based on table 7, the R Square value for the Y variable (Wakif Trust) as an endogenous
variable in this study is 0.612. This indicates that the Y variable is substantially/strongly
influenced by exogenous variables research, namely 61.2%. While the remaining 38.8% is
explained by other exogenous variables outside this research model.

Q-Square (Predictive Relevance)

Testing through Q-Square or predictive relevance is used to determine predictive
capability with a blindfolding procedure (Vinzi, Trinchera, & Amato, 2010). The references used
are; Q2 reaches 0.02, it is classified as small, Q2 reaches 0.15, it is classified as moderate, and if
Q2 reaches 0.35, it is classified as large.

Table 9 Q-Square

SSO SSE Q² (=1-SSE/SSO)

X1 480,000 480,000
X2 480,000 480,000
X3 480,000 480,000
X4 480,000 480,000
X5 480,000 480,000
Y 840,000 595,819 0,291
Source: Data processed using SmartPLS, 2023

Based on table 8, the Q2 value in this study is 0.291. So this indicates that the predictive
capability of this study with the blindfolding procedure is moderate.

Direct Influence
The use of direct effect analysis is to test the hypothesis of the direct effect of an
exogenous variable on endogenous variables. In this study tested 5 hypotheses. Analysis of a
hypothesis can be done based on 2 references, namely; (i) the value of the path coefficients / path
coefficients to determine whether there is a negative or positive relationship, (ii) the value of P /
P-Values to determine a significant or insignificant effect. If the path coefficient value is
positive, then the relationship between the exogenous variables influencing the endogenous
variables is directly proportional. Vice versa, if the path coefficient value is negative, then the
relationship of exogenous variables in influencing endogenous variables is inversely proportional
(Sarstedt, Ringle, & Hair, 2017). Furthermore, the measurement for the P value, if <0.05
indicates a significant influence. If the P value > 0.05, it indicates an insignificant effect (Vinzi,
Trinchera, & Amato, 2010).

Table 10 Direct Influence

Path T Statistik
Rata-rata Standar
Coefficients Sampel (|
Sampel Deviasi P Values
Asli (O) O/STDEV
(M) (STDEV)
|)
X1 -> Y 0,244 0,244 0,239 0,112 2,172 0,030
Source: Data processed using SmartPLS, 2023

The Relationship between the Principle of Transparency and the Trust of the Wakif

Based on table 9, it can be stated that the relationship between the variable Transparency
(X1) and Trust in Wakif (Y) shows a path coefficient value of 0.244 (+) and a P value of 0.030
(<0.05). This indicates that the variable X1 as an exogenous variable influences the Y variable
positively and significantly. Transparency is something that can be understood and felt. Based on
the aspect of the openness mechanism, overall the wakifs consider that the publication of waqf
asset management and the ease of accessing information can increase the wakif's trust in waqf.

Table 11 Direct Influence

Path T Statistik
Rata-rata Standar
Coefficients Sampel (|
Sampel Deviasi P Values
Asli (O) O/STDEV
(M) (STDEV)
|)
X2 -> Y 0,224 0,224 0,229 0,109 2,053 0,041
Source: Data processed using SmartPLS, 2023

Relationship of Accountability Principles to Waqif Trust

Based on table 12, it can be interpreted that the relationship between the Accountability
variable (X2) and Trust in Wakif (Y) shows a path coefficient value of 0.224 (+) and a P value of
0.041 (<0.05). This indicates that the variable X2 as an exogenous variable influences the Y
variable positively and significantly. The principle of accountability is aimed at building the trust
of waqifs and the wider community in general, bearing in mind that service to the community is
the main goal of every institution's activities. Measurement through the completeness of the
information, explanation of the objectives of the policies taken, feasibility and consistency, as
well as the dissemination of information regarding the decisions taken can affect the trust of the
wakifs. The wakifs are aware of their right to obtain complete and accurate information.
Tabel 14 Pengaruh Langsung
Path T Statistik
Rata-rata Standar
Coefficients Sampel (|
Sampel Deviasi P Values
Asli (O) O/STDEV
(M) (STDEV)
|)
X3 -> Y 0,331 0,331 0,325 0,098 3,383 0,001
Source: Data processed using SmartPLS, 2023

Hubungan Prinsip Responsibilitas Terhadap Kepercayan Wakif

Berdasarkan tabel 13 dapat diartikan bahwa hubungan variabel Responsibilitas (X3)
terhadap Kepercayaan Wakif (Y) menunjukkan nilai koefisien jalur sebesar 0,331 (+) dan nilai P
sebesar 0,001 (< 0,05). Hal tersebut mengindikasikan bahwa variabel X3 sebagai variabel
eksogen mempengaruhi variabel Y secara positif dan signifikan. Prinsip responsibilitas
merupakan kesesuaian pengelolaan lembaga dengan peraturan perundang-undangan yang
berlaku dan prinsip-prinsip pengelolaan lembaga yang sehat. Lembaga wakaf yang memiliki
pertanggung jawaban yang baik serta patuh terhadap peraturan yang berlaku dapat
mempengaruhi kepercayaan wakif. Karena para wakif menginginkan lembaga wakaf yang
bertanggung jawab dan terhindar dari praktik yang tidak sehat untuk mewakafkan harta mereka.
Penelitian ini sejalan dengan penelitian Kalau et al. (2022) menyatakan bahwa prinsip
responsibilitas berpengaruh terhadap kepercayaan nasabah Bank Muamalat Cabang Ambon.

Table 12 Direct Influence

Path T Statistik
Rata-rata Standar
Coefficients Sampel (|
Sampel Deviasi P Values
Asli (O) O/STDEV
(M) (STDEV)
|)
X4 -> Y 0,126 0,126 0,130 0,106 1,190 0,235
Source: Data processed using SmartPLS, 2023

The Relationship between the Principle of Independence and the Trust of the Waqif

Based on table 11, it can be explained that the relationship between the independence
variable (X4) and trust in wakif (Y) shows a path coefficient value of 0.126 (+) and a P value of
0.235 (> 0.05). This indicates that variable X4 as an exogenous variable does not affect variable
Y insignificantly. The principle of independence is a situation in which an institution is managed
independently without any conflict of interest and influence from any party that is not in
accordance with laws and regulations and the principles of a healthy institution. In this study the
principle of independence has no significant effect, it does not mean that waqf institutions do not
apply the principle of independence, but that waqifs do not too concerned or looking at the
independence of an institution but more looking at how waqf assets can be managed properly.
 Table 13 Direct Influence

Path T Statistik
Rata-rata Standar
Coefficients Sampel (|
Sampel Deviasi P Values
Asli (O) O/STDEV
(M) (STDEV)
|)
X5 -> Y 0,039 0,039 0,040 0,093 0,423 0,672
Source: Data processed using SmartPLS, 2023

The Relationship between the Fairness Principle and the Trust of the Wakif

Based on table 12, it can be explained that the relationship between the variable Fairness
(X5) and Trust in Wakif (Y) shows a path coefficient value of 0.039 (+) and a P value of 0.672
(> 0.05). This indicates that the variable X5 as an exogenous variable does not significantly
affect the variable Y. The application of the principle of fairness is being able to fulfill the rights
of stakeholders that arise based on agreements and applicable laws and regulations. Also able to
show equal treatment to all interested parties according to the criteria and the right portion. In
practice, waqf institutions are able to provide fair services and carry out their duties
professionally.

Conclusion and Recommendation

Conclution
This research was conducted to examine the effect of applying the principles of good
corporate governance on the trust of wakifs. From the results of testing and discussion it can be
concluded that waqifs consider the factors of three variables, namely transparency,
accountability and responsibility in waqf. Because waqf is one of the social activities where what
is needed by the waqif is that they prioritize that the assets distributed are in accordance with
their designation. This information can be fulfilled by three variables, namely transparency,
accountability, and responsibility.
Recommendation
For further research, it can be analyzed from internal waqf institutions. Furthermore,
researchers can also use questionnaires, interviews, group discussion forums, etc. So that
measurements in research can describe conditions more completely.

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