Survey to assess the problems of corporate governance facing Islamic Financial Institutions (IFI’s) at this moment in time

Abstract

This dissertation highlights and analyses the results of a Survey to assess the problems of corporate governance facing Islamic Financial Institutions (IFI’s) at this moment in time. The significance of the dissertation is in describing governance in Islamic financial institutions and how there are numerus matters under the investigation process, and to view the entire area of corporate governance from a religious context. A solution to deal with these problems from a religious angle, whereby the obligation of adhering to good corporate governance practices is perceived from the perspective of religious obligations. One of the objectives of this paper is to examine, and create greater awareness of, some of the critical issues related to corporate governance in Islamic financial institutions. A second, perhaps, a more significant objective is to emphasize how improvements in corporate governance in such institutions can come about by viewing them as a religious obligation, and thereby preserving their acceptance but safeguarding the interests of all stakeholders. Islamic Shariah provides guidelines that can help the Islamic finance industry alleviate problems resulting from the dualism of improving financial efficiency and observing the rules of Shariah. A greater commitment to the objectives of Shariah may allow the industry to escape the argument that Islamic finance is dissimilar in form but effectively the same in substance to conventional finance.