5 Corporate Governance for Institutions Offering Islamic Financial Services »
Barry RiderFrom: Islamic Finance: Law and Practice
Edited By: Craig R.Nethercott, David M. Eisenberg
5.01 Over the last ten years in particular there has been in many countries a significant increase of interest in the viability and benefits of utilizing Shari‘a-compliant forms of investment. This interest has not been confined to the Islamic world or for that matter those who follow the teachings of the Prophet. For a variety of reasons—some economic, but perhaps mostly political—leading financial markets and institutions have become concerned to at least be seen to be facilitative of those who wish to offer services and products that comport with the principles...
Part I Introduction, 5 Corporate Governance for Institutions Offering Islamic Financial Services »
Barry RiderFrom: Islamic Finance: Law and Practice (2nd Edition)
Edited By: Craig R. Nethercott, David M. Eisenberg
This chapter addresses the issue of corporate governance for Islamic financial institutions. It sets against the backdrop of English law the various responsibilities that the Shari’a casts on believers in the management of their own affairs and those of others for whom they have taken—usually by contract—an obligation. As has been recognized by, for example, the Islamic Financial Services Board (IFSB), in reality many of the issues that have been addressed as matters of governance in the more developed markets of the West, have not, until recently, been particularly pertinent in Islam. The perception remains in the minds of many scholars and believers that given the all-pervading tenets of the Shari’a and their high moral content, dictating honesty and fair dealing, the essentially procedural mechanisms of Western governance are not of compelling relevance. Of course, when seeking to engage in activity in those jurisdictions where such systems are required, then it is appropriate to accommodate them. It is also increasingly accepted that adherence to such procedures might be a price worth paying for being seen as having institutions and markets that are of a truly international calibre. Indeed, this is a priority of such bodies at the IFSB.