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Stakeholder interests and sharia compliance assurance: a discourse on the role of sharia boards of Islamic banks

This study argues that the relevant theoretical framework underlying the operations of Islamic banks is the stakeholder theory with the stakeholders are expected to be ultimately concerned with the provision of Islamic banking products and services that are Sharia compliant. Based on our semi-struct...

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Main Author: Sheikh Hassan, Ahmad Fahmi
Format: Conference or Workshop Item
Language:English
Published: Halal Products Research Institute, Universiti Putra Malaysia 2014
Online Access:http://psasir.upm.edu.my/id/eprint/60591/1/M31.pdf
http://psasir.upm.edu.my/id/eprint/60591/
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spelling my.upm.eprints.605912018-06-07T08:46:00Z http://psasir.upm.edu.my/id/eprint/60591/ Stakeholder interests and sharia compliance assurance: a discourse on the role of sharia boards of Islamic banks Sheikh Hassan, Ahmad Fahmi This study argues that the relevant theoretical framework underlying the operations of Islamic banks is the stakeholder theory with the stakeholders are expected to be ultimately concerned with the provision of Islamic banking products and services that are Sharia compliant. Based on our semi-structured interviews undertaken with 46 key players operating in the Sharia governance framework of the Malaysian Islamic banking industry, our study reveals only a weak emphasis for the stakeholder theoretical framework. We derive this conclusion based on our finding that Sharia boards are overwhelmingly inclined to limit themselves to aspects related to the development and approval of Islamic banking products. This study also reports that the Sharia compliance review is primarily undertaken by Islamic banks’ internal Sharia compliance officers, and then merely presented to the Sharia board for approval. Interestingly, the study further reports that the appointment of Sharia board members was predominantly motivated by a desire to image build and to serve the commercial interests of Islamic banks, thus raising concern that boards are being used as a tool for satisfying managerial opportunistic behaviour. Finally, the pursuit of stakeholder interest assumed by Islamic banks was reported to be influenced by conventional banking practice. Halal Products Research Institute, Universiti Putra Malaysia 2014 Conference or Workshop Item PeerReviewed text en http://psasir.upm.edu.my/id/eprint/60591/1/M31.pdf Sheikh Hassan, Ahmad Fahmi (2014) Stakeholder interests and sharia compliance assurance: a discourse on the role of sharia boards of Islamic banks. In: Malaysia International Halal Research & Education Conference 2014 (MIHREC 2014), 2-4 Dec. 2014, Marriott Putrajaya Hotel, Malaysia. (p. 268).
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description This study argues that the relevant theoretical framework underlying the operations of Islamic banks is the stakeholder theory with the stakeholders are expected to be ultimately concerned with the provision of Islamic banking products and services that are Sharia compliant. Based on our semi-structured interviews undertaken with 46 key players operating in the Sharia governance framework of the Malaysian Islamic banking industry, our study reveals only a weak emphasis for the stakeholder theoretical framework. We derive this conclusion based on our finding that Sharia boards are overwhelmingly inclined to limit themselves to aspects related to the development and approval of Islamic banking products. This study also reports that the Sharia compliance review is primarily undertaken by Islamic banks’ internal Sharia compliance officers, and then merely presented to the Sharia board for approval. Interestingly, the study further reports that the appointment of Sharia board members was predominantly motivated by a desire to image build and to serve the commercial interests of Islamic banks, thus raising concern that boards are being used as a tool for satisfying managerial opportunistic behaviour. Finally, the pursuit of stakeholder interest assumed by Islamic banks was reported to be influenced by conventional banking practice.
format Conference or Workshop Item
author Sheikh Hassan, Ahmad Fahmi
spellingShingle Sheikh Hassan, Ahmad Fahmi
Stakeholder interests and sharia compliance assurance: a discourse on the role of sharia boards of Islamic banks
author_facet Sheikh Hassan, Ahmad Fahmi
author_sort Sheikh Hassan, Ahmad Fahmi
title Stakeholder interests and sharia compliance assurance: a discourse on the role of sharia boards of Islamic banks
title_short Stakeholder interests and sharia compliance assurance: a discourse on the role of sharia boards of Islamic banks
title_full Stakeholder interests and sharia compliance assurance: a discourse on the role of sharia boards of Islamic banks
title_fullStr Stakeholder interests and sharia compliance assurance: a discourse on the role of sharia boards of Islamic banks
title_full_unstemmed Stakeholder interests and sharia compliance assurance: a discourse on the role of sharia boards of Islamic banks
title_sort stakeholder interests and sharia compliance assurance: a discourse on the role of sharia boards of islamic banks
publisher Halal Products Research Institute, Universiti Putra Malaysia
publishDate 2014
url http://psasir.upm.edu.my/id/eprint/60591/1/M31.pdf
http://psasir.upm.edu.my/id/eprint/60591/
_version_ 1643837403780087808
score 13.211869

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