The Objective Of Shariah Governance: A Maqasid Perspective

Ahmad Faizol  Ismail; Wan Mohd Yusof  Wan Chik; Abdul Wahab  Md. Ali

Authors

Ahmad Faizol Ismail Head Department of Shariah
Wan Mohd Yusof Wan Chik Associate Professor
Abdul Wahab Md. Ali Lecturer

Keywords:

Shariah, Governance, Corporate, Firm, Sustainability

Abstract

Shariah governance refers to a set of institutional and organizational arrangements through which Islamic financial institutions ensure that there is effective independent oversight of Shariah compliance. Regarding this, in most cases, Shariah governance emphasises the issues related to Shariah matters namely on their permissibility. Less attention has been given to the question of whether is has to do with the objective of the firm as mostly discussed by conventional corporate governance corpus. This is perceivable by looking at rule-based standards and frameworks published by several Shariah standard-setters such as the IFSB and the AAOIFI. It is for this reason, this paper will explore Shariah perspective on the issue of the objective of the firm, especially the Islamic financial institutions as one of the means used by Muslims to generate wealth in our modern day. Using qualitative research, data was collected from Islamic literature relating to the issue, and was analysed thematically. By applying maqasid Shariah, this paper will reveal that ensuring firm sustainability is a consequential factor to be highlighted in Shariah governance system. In other words, Shariah governance is not merely about product permissibility under Shariah tenets, but also keen on the objective of the existence of the institutions itself. This is believed could give the answer for the Islamic financial institutions to the question of whether their purpose is to generate and increase the value of the wealth merely for the best sake of the shareholders or to give the generated wealth back to Muslims as the stakeholders in charitable ways of delivery system.

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Author Biographies

Ahmad Faizol Ismail, Head Department of Shariah

Faculty of Islamic Comtemporary Studies, Sultan Zainal Abidin University (UniSZA)

Wan Mohd Yusof Wan Chik, Associate Professor

Fellow, Research Institute for Islamic Products and Malay Civilization (INSPIRE), Department of Shariah, Faculty of Islamic Comtemporary Studies, Sultan Zainal Abidin University (UniSZA).

Deputy Chairman, Islamic Fiqh Academy of Malaysia (AFHAM)

Abdul Wahab Md. Ali, Lecturer

Centre for Fundamental Studies, Sultan Zainal Abidin University (UniSZA).

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Ahmad Faizol Ismail. & Wan Mohd Yusof Wan Chik. 2020. A Chronological Review of the Development of the Shariah Supervision System in Islam . Jurnal Islam Dan Masyarakat Kontemporari. Vol. 21. No.3. 28-36.

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Hassan, Zulkifli. 2011. ‘Shariah Governance in Islamic Financial Institutions in Malaysia, GCC Countries and the UK’ (DPhil Thesis, Durham University)