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Addressing governance issue in Islamic real estate investment (I-REITs): a case study for OIC country Malaysia

The implementation of good governance practices for Islamic products and services is significantly important in order to ensure its sustainability in the long-run.Furthermore, the strong regulatory framework of governance structures which is based on Shari’ah principles can help to reduce fraud, di...

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Main Authors: Zainuddin, Zaemah, Nordin, Norhafiza
Format: Article
Language:English
Published: Islamic Business School 2016
Subjects:
HG Finance
Online Access:http://repo.uum.edu.my/21088/1/IJIB%2011%282016%29%2060-75.pdf
http://repo.uum.edu.my/21088/
http://ijib.uum.edu.my/index.php/issue-1/ijib-11-jun-2016-60-72
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spelling my.uum.repo.210882017-02-26T06:30:59Z http://repo.uum.edu.my/21088/ Addressing governance issue in Islamic real estate investment (I-REITs): a case study for OIC country Malaysia Zainuddin, Zaemah Nordin, Norhafiza HG Finance The implementation of good governance practices for Islamic products and services is significantly important in order to ensure its sustainability in the long-run.Furthermore, the strong regulatory framework of governance structures which is based on Shari’ah principles can help to reduce fraud, dishonesty and other unethical practices in doing businesses.Nevertheless, for a new Islamic product such as Islamic real estate investment trust, lack of specific standards and guidelines stated for the appointment of Shari’ah Advisor (SA) may distort the optimum growth and future development of this product.Thus, this paper examine the practice of selecting Shari’ah Advisory Committee by Islamic REIT companies in Malaysia using five standard governance framework which are independence, confidentiality, competence, consistency and disclosure. The data are taken from the Islamic REITs’ companies’ annual reports and interviews with relevant authorities such as Bank Negara Malaysia and Securities Commission Malaysia. Results from this study suggest that information of Shari’ah Advisory Board/Committee members and qualifications are not properly disclosed in the annual report and the term of appointment of Shari’ah Advisory Committee in some of the REIT companies is too long.In addition, the elements of Islamic auditing or reporting are vague.These factors are significantly important as they show the important role of good governance in ensuring the faith of investors is not being compromised and the Islamic REIT is Shari’ah compliant. Thus, it can be concluded that more effort need to be put forward in producing a good Islamic governance framework for Islamic REIT. Islamic Business School 2016 Article PeerReviewed application/pdf en http://repo.uum.edu.my/21088/1/IJIB%2011%282016%29%2060-75.pdf Zainuddin, Zaemah and Nordin, Norhafiza (2016) Addressing governance issue in Islamic real estate investment (I-REITs): a case study for OIC country Malaysia. International Journal of Islamic Business (IJIB), 1 (1). pp. 60-75. ISSN 0127- 662X http://ijib.uum.edu.my/index.php/issue-1/ijib-11-jun-2016-60-72
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HG Finance
spellingShingle HG Finance
Zainuddin, Zaemah
Nordin, Norhafiza
Addressing governance issue in Islamic real estate investment (I-REITs): a case study for OIC country Malaysia
description The implementation of good governance practices for Islamic products and services is significantly important in order to ensure its sustainability in the long-run.Furthermore, the strong regulatory framework of governance structures which is based on Shari’ah principles can help to reduce fraud, dishonesty and other unethical practices in doing businesses.Nevertheless, for a new Islamic product such as Islamic real estate investment trust, lack of specific standards and guidelines stated for the appointment of Shari’ah Advisor (SA) may distort the optimum growth and future development of this product.Thus, this paper examine the practice of selecting Shari’ah Advisory Committee by Islamic REIT companies in Malaysia using five standard governance framework which are independence, confidentiality, competence, consistency and disclosure. The data are taken from the Islamic REITs’ companies’ annual reports and interviews with relevant authorities such as Bank Negara Malaysia and Securities Commission Malaysia. Results from this study suggest that information of Shari’ah Advisory Board/Committee members and qualifications are not properly disclosed in the annual report and the term of appointment of Shari’ah Advisory Committee in some of the REIT companies is too long.In addition, the elements of Islamic auditing or reporting are vague.These factors are significantly important as they show the important role of good governance in ensuring the faith of investors is not being compromised and the Islamic REIT is Shari’ah compliant. Thus, it can be concluded that more effort need to be put forward in producing a good Islamic governance framework for Islamic REIT.
format Article
author Zainuddin, Zaemah
Nordin, Norhafiza
author_facet Zainuddin, Zaemah
Nordin, Norhafiza
author_sort Zainuddin, Zaemah
title Addressing governance issue in Islamic real estate investment (I-REITs): a case study for OIC country Malaysia
title_short Addressing governance issue in Islamic real estate investment (I-REITs): a case study for OIC country Malaysia
title_full Addressing governance issue in Islamic real estate investment (I-REITs): a case study for OIC country Malaysia
title_fullStr Addressing governance issue in Islamic real estate investment (I-REITs): a case study for OIC country Malaysia
title_full_unstemmed Addressing governance issue in Islamic real estate investment (I-REITs): a case study for OIC country Malaysia
title_sort addressing governance issue in islamic real estate investment (i-reits): a case study for oic country malaysia
publisher Islamic Business School
publishDate 2016
url http://repo.uum.edu.my/21088/1/IJIB%2011%282016%29%2060-75.pdf
http://repo.uum.edu.my/21088/
http://ijib.uum.edu.my/index.php/issue-1/ijib-11-jun-2016-60-72
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score 13.211869

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