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Governance framework in Islamic financial institutions

In: Islamic Wealth Management

Author

Listed:
  • Zulkarnain M. Sori
  • Shamsher Mohamad
  • M. Eskandar Shah Rasid

Abstract

What are the issues of governance is discussed in this chapter. We describe the practices of world’s first Shariah Governance Framework mandated by the Malaysia Central Bank to enhance the effectiveness and efficiency of financial institutions in that country. Four main functions of Shariah boards are discussed with respect to Risk Management, Review, Research and Audit, each of which has its own board. The perceptions were sought through structured interviews in 2016 of 16 members of the committee on the mandated governance framework. Though most of them perceived this framework as an important mechanism to monitor the interest of diverse stakeholders such as depositors, investment account holders and shareholders, there were also concerns on effective enforcement mechanisms as well as the need to refine continuous improvements in place to achieve the desired effect of this initiative.

Suggested Citation

  • Zulkarnain M. Sori & Shamsher Mohamad & M. Eskandar Shah Rasid, 2017. "Governance framework in Islamic financial institutions," Chapters, in: Mohamed Ariff & Shamsher Mohamad (ed.), Islamic Wealth Management, chapter 4, pages 55-70, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:17781_4
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    Keywords

    Asian Studies; Economics and Finance;

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