FIQH
SUMMARY
Governance is as defined as the rule of the rulers. In Islamic financial institutions (IFIs) corporate governance plays significant and substantial role in sustaining the existence of IFIs as it promotes transparency, accountability and fairness while dealing with the industry but it depends on the regulation, legal and institutional environment in which company operates.
At present, two concept of governance being practice are corporate governance and shariah governance being imply in Islamic finance industry to grow and sustain the stability. Shariah governance has gained more attention by the industry players as well as the regulators.
Shariah governance system refers to the set of institutional and organisational arrangement through which Islamic financial institutions (IFIs) ensure that there is effective independent oversight of the Shariah compliance over the issuance of relevant Shariah pronouncements or resolution, dissemination of information on such Shariah pronouncements or resolutions and an internal Shariah compliance review or audit (IFSB, 2009). The main objectives of shariah governance are to oversee the Shariah compliance aspects of IFIs operations and to further strengthen the roles and responsibilities of relevant parties within the same organisation for the purpose of Shariah compliance.
Shariah governance is a part of corporate governance governing and assisting in the management of the IFIs. It also observes all requirement of corporate governance and further supplements some additional requirement to ensure its compliancy and consistency with Shariah principles. There are issue when there are no proper framework of governing the IFIs in fulfilling the Shariah requirements, the non-compliance with Shariah will injure the institutions and cause affect to the industry.
In Malaysia case, Central bank of Malaysia has issued the Shariah Governance Framework 2010 (SGF 2010) with the objective to enhance the role of Board, the Shariah
Governance is as defined as the rule of the rulers. In Islamic financial institutions (IFIs) corporate governance plays significant and substantial role in sustaining the existence of IFIs as it promotes transparency, accountability and fairness while dealing with the industry but it depends on the regulation, legal and institutional environment in which company operates.
At present, two concept of governance being practice are corporate governance and shariah governance being imply in Islamic finance industry to grow and sustain the stability. Shariah governance has gained more attention by the industry players as well as the regulators.
Shariah governance system refers to the set of institutional and organisational arrangement through which Islamic financial institutions (IFIs) ensure that there is effective independent oversight of the Shariah compliance over the issuance of relevant Shariah pronouncements or resolution, dissemination of information on such Shariah pronouncements or resolutions and an internal Shariah compliance review or audit (IFSB, 2009). The main objectives of shariah governance are to oversee the Shariah compliance aspects of IFIs operations and to further strengthen the roles and responsibilities of relevant parties within the same organisation for the purpose of Shariah compliance.
Shariah governance is a part of corporate governance governing and assisting in the management of the IFIs. It also observes all requirement of corporate governance and further supplements some additional requirement to ensure its compliancy and consistency with Shariah principles. There are issue when there are no proper framework of governing the IFIs in fulfilling the Shariah requirements, the non-compliance with Shariah will injure the institutions and cause affect to the industry.
In Malaysia case, Central bank of Malaysia has issued the Shariah Governance Framework 2010 (SGF 2010) with the objective to enhance the role of Board, the Shariah