Shariah Governance Framework Gaps and Issues

Noor Azian Ismail and Dr Shaikh Hamzah Abdul Razak

International Journal of Financial Economics, 2014, vol. 3, issue 1, 1-10

Abstract: The ultimately concern of Islamic Financial Institutions is the conduct of their business in accordance to the principles of Shariah. In light of this concern, The Shariah Governance Framework was introduced into the system. The framework outlines the establishment of the Shariah Review, Shariah Risk Management, and Shariah Audit as well as strengthening the roles and responsibilities of Board, Management and the Shariah Committee. The Shariah governance established in an Islamic Financial Institutions adds an additional layer of governance to the existing corporate governance structure of the Institutions. The present article discusses the industry gaps and issues in implementing the Shariah Governance Framework by Islamic Financial Institution with suggestions on addressing these issues from interviews and discussions of relevant industry practitioners.The findings of the interview reflected differences in implementation adopted by the financial institutions, the lack of experience of Shariah officers in various areas and, also the Shariah Committees members.

Keywords: Shariah framework; Shariah Audit; Shariah Committee; Shariah Research. (search for similar items in EconPapers)
Date: 2014
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