| Abstract: |
This paper is one of few papers that highlight the importance of studying
corporate governance for institutions offering Islamic financial services. The
book is of value in describing governance in Islamic institutions and how
there are many issues under the investigation process, especially issues
related to the shari‘a Supervisory board and its functionality. One of the
objectives of this paper is to discuss, and create greater awareness of, some
of the crucial issues related to corporate governance in Islamic financial
institutions. A second, but in fact more important, objective is to provide,
in the light of this discussion, certain essential guidelines to improve
corporate governance in these institutions and thereby enable them to not only
maintain their momentum of growth and international acceptance but also
safeguard the interests of all stakeholders. The paper gives particular
attention to the mechanisms for corporate governance, including the Board of
Directors, Senior Management, shareholders, depositors, and regulatory and
supervisory authorities. It also focuses on the effective management of risks
and, in particular, on creating a supporting environment through moral uplift,
social, legal and institutional checks, greater transparency, internal
controls, and Shari'a as well as external audit. The paper also indicates
briefly the shared institutions that are needed for effective corporate
governance. |