Research Student: Ahmad Faizol bin Ismail
The Principles of Shariah Governance as Practiced by The Islamic Financial Institutions
I am conducting a research on basic principles behind the Islamic version of corporate governance, which known as the Shariah governance. The Shariah governance is a directive system in getting the Islamic financial institutions to operate coherently with the principles of Islamic thought. Most of the Shariah governance mechanisms in the real world application are playing the same role as the corporate governance mechanisms in the conventional financial institutions. The paramount characteristics of the Shariah governance system, that diversify the both systems, is the existence of the Shariah committee and its constituents, which serve the Islamic financial institutions by providing advice on the Shariah related matters in order to prevent the institutions from the Shariah noncompliance risks.
The discussion on Shariah governance is relatively new compared to its counterpart. The concept of the corporate governance itself, is only becoming popular recently, which is after the event of multiple corporate failures due to the ineffective governance system. This debate would has diverted its attention to the Shariah governance after the previous world economic crisis, in 2007. There are factors that have contributed to the expansion of the corporate governance discussions, but corporate collapse, such as the case of the ENRON in the US and the Barings Bank in the UK, has played as the main cause crucially. The Islamic financial institutions seem not to be immune to the similar crisis as represented by the collapse of the Ihlas Financial House in Turkey. As a prevention action, before the occurrence of a new crisis, an effort to provide a basic knowledge of the principles of the Shariah governance system should be undertaken immediately. Prior to the new understanding of the knowledge, this research, hopefully, will support the market with prevention actions and alternative solutions for the potential crisis from happening.
- Diploma of Islamic Studies (Shariah) - Sultan Zainal Abidin Islamic College
- Bachelor of Shariah - Al-Azhar University, Egypt
- Masters of Shariah (Islamic Banking) - University of Malaya
What makes me passionate about my subject?
My area of research is about collaborating various and diverse areas of studies which are the Islamic studies, finance, corporate governance and law. This research has provided me a golden opportunity to explore a diverse and extensive literature which are eventually urging my ability to express as clear as it could be, the idea, that representing the real understanding of this area of knowledge. Hopefully, this research will make its contributions a to the Shariah governance corpus of studies as one of its end products for the benefit of all stakeholders.