scholarly journals The independence of the Shari’a supervisory board in the Islamic financial institutions of the GCC countries

2010 ◽  
Vol 6 (2) ◽  
pp. 20-34
Author(s):  
Samy Nathan Garas ◽  
Chris Pierce
Keyword(s):  
Financial Institutions ◽  
Boards Of Directors ◽  
Code Of Conduct ◽  
Supervisory Board ◽  
Executive Management ◽  
Gcc Countries ◽  
The Board Of Directors ◽  
Islamic Financial Institutions ◽  
Supervisory Boards

Islamic Financial Institutions (IFIs) are governed by two boards: the Board of Directors (BoD) and the Shari’a Supervisory Board (SSB). The SSB is a panel of Shari’a scholars who act independently from other governance organs. This paper discriminates between dependent SSBs and independent SSBs by using twenty one variables, which are classified into three groups: the implementation of governance best practices, the recruitment of SSB members, and the relationship between the SSB members and other governance organs. This study is one of the first studies that provide empirical results about the SSB independence. Nevertheless, the research focuses exclusively on the Gulf Cooperation Council (GCC) countries and excludes the other countries where Shari’a supervision might have different forms. The study has developed a hypothesis, which was tested by a questionnaire. Data was collected from 76 Shari’a Supervisory Boards, 73 Boards of Directors, and 59 shareholders of IFIs in the GCC countries (Bahrain, Kuwait, Qatar, Saudi Arabia, and UAE) during 2009. The discriminant analysis has been used in identifying both dependent and independent SSBs. The paper finds five variables relevant in discriminating the two groups. These variables are the incentives provided to the SSB; the average remuneration to the SSB members; the existence of the policy of penalties for violating the code of conduct; the relation between the SSB members and the BoD; and the role of executive management in recruiting SSB members.

scholarly journals The performance of Shari’a supervisory boards within Islamic financial institutions in the Gulf cooperation council countries

2010 ◽  
Vol 8 (1) ◽  
pp. 247-266 ◽  
Author(s):  
Samy Nathan Garas
Keyword(s):  
Financial Institutions ◽  
Boards Of Directors ◽  
Negative Impact ◽  
Positive Impact ◽  
Gulf Cooperation Council ◽  
Internal Variables ◽  
Gcc Countries ◽  
Islamic Financial Institutions ◽  
Supervisory Boards ◽  
The Impact

This study evaluates the role and performance of Shari’a Supervisory Boards (SSB) within Islamic Financial Institutions (IFIs) of the Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates). Although the SSB has a significant impact on an IFI’s performance, there has been little empirical research on the SSB performance. This study is unique in measuring empirically the relation between five variables and SSB performance. Data has been collected through a questionnaire from 76 Shari’a Supervisory Boards, 73 Boards of Directors, and 59 shareholders of IFIs in the GCC countries during 2009. The researchers found three variables that have a positive impact on the performance of SSBs: the number of SSB meetings, the qualifications of SSB members, and the evaluation of each member. Furthermore, the work of the Shari’a control department was found to have a negative impact on SSB performance. There was no statistically relationship between SSB performance and SSB position within the IFI organization structure. This study fills a literature gap in corporate governance by evaluating the impact of a religious board upon the performance of financial institutions. The study provides a theoretical framework for measuring SSB performance using internal variables. This study offers insights to GCC regulators, central banks, and other IFI stakeholders concerning SSB performance. In addition, it provides guidance to SSB members in improving their performance and strengthening their relations with other governance organs.

Sharia Compliant in Private Zakat Institutions of Riau

2020 ◽  
pp. 429-442
Author(s):  
Devi Megawati
Keyword(s):  
Financial Institutions ◽  
Supervisory Board ◽  
The Body ◽  
Islamic Banks ◽  
Body Of Knowledge ◽  
Islamic Financial Institutions ◽  
Primary Reference

This study aims to understand the role of Sharia Supervisors in the private Zakat Institution (LAZ) as well as other aspects of sharia compliance, such as Zakat fatwa on the perspective of Zakat officers. According to Decree of the Minister of Religion Number 333 / 2015 that LAZ as register must have a sharia supervisor. Sharia compliance of an institution could rely on the role of the sharia supervisory board (SSB). Some literature discussing this topic is still dominated study on Islamic financial institutions (IFIs), especially in Islamic Banks. Therefore this article will contribute to the body of knowledge, especially in the zakat literature. Data were gathered from five presiding officers of private zakat institutions in one province in Indonesia which consists of three presiding officers from provincial LAZ representative and two presiding officers from LAZ district. The study found that Sharia compliance in LAZ had many weaknesses such as lack of sharia control by sharia supervisors, a member of the sharia supervisory board who does not follow the latest issues about Zakat or the absence of competency requirements to be a sharia supervisor at LAZ and also did not make Zakat fatwa issued by MUI as the primary reference by zakat officer. This information will be useful for stakeholders, including supervisory authorities and regulators.

Corporate Governance: Principles and Objectives

1998 ◽  
Vol 2 (2) ◽  
pp. 18-22
Author(s):  
N. Vittal
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Institutions ◽  
Code Of Conduct ◽  
Ethical Values ◽  
Good Corporate Governance ◽  
The Board Of Directors ◽  
Fundamental Value ◽  
The Government

Corporate Governance provides the fundamental value framework for the culture of an organisation which ensures efficient functioning of enterprises on sound ethical values and principles. Corporate governance has become a necessity, especially since 1991, when India made a U-turn in its economic policy and the revised policy of the government was aimed at attracting funds from foreign financial institutions. The primary resonsibiity of good corporate governance is that of the Board of Directors. For better corporate governance the boards should perform the role of monitoring the functioning of an organisation, without at the same time reducing the effectiveness of the management by interfering with their day-to-day matters. One of the impediments in the way of good corporate governance is corruption. The three factors within any system which generate corruption are: scarcity, lack of transparency and delay. If these three problems are tackled effectively, corruption can be checked to a great extent. As far as public sector undertakings are concerned, the “Code of Conduct and Ethics” should facilitate the redesigning of the PSEs.

scholarly journals IMPROVEMENT OF INDEPENDENT DIRECTORS INSTITUTION IN BANKING SECTOR

2017 ◽  
Vol 5 (2) ◽  
pp. 151-156
Author(s):  
Александр Рыманов ◽  
Aleksandr Rymanov
Keyword(s):  
Board Of Directors ◽  
Banking Sector ◽  
Supervisory Board ◽  
International Experience ◽  
Independent Directors ◽  
Stock Exchanges ◽  
Excessive Force ◽  
The Board Of Directors ◽  
Supervisory Boards

The article deals with problems of the institution of independent directors in the banking sector. The author analyses the activities of the independent directors, the requirements of regulators, stock exchanges to participation of independent directors on the Board of Directors (supervisory boards) of the banks. It is noted that the presence of independent directors in the Board of Directors (Supervisory Board) increases the objectivity of decisions. However, it is not feasible to perform the requirements of the banks on the high proportion of independent directors at the expense of excessive force. Analyzed international experience of independent directors in the banking sector, testifies to the ambiguous role of independent directors in various jurisdictions. National experiences of independent directors according to Sberbank and the rules of the Moscow Exchange presents on the application of uniform mandatory approach to participation of independent directors in the supervisory boards. It is proposed that the feasibility of increasing the participation of independent directors in the deliberations of the supervisory boards of banks.

scholarly journals The Role of Supervisory Board in Corporate Governance in Vietnam: From Legal Regulations to Practice

2021 ◽  
Vol 11 (4) ◽  
pp. 2546-2563
Author(s):  
Dr. Phan Thi Thanh Thuy
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Internal Control ◽  
Supervisory Board ◽  
Governance Structure ◽  
Company Law ◽  
The Board Of Directors ◽  
Supervisory Boards ◽  
Control Body

Good corporate governance is always associated with an effective internal control system, which is expected to quickly forecast and detect the infringements of laws and the company's charters committed by the main corporate governance bodies like the board of directors, the general director, and provide timely advice on remedial solutions. Following this theory, since the adoption of the first Vietnamese company law in 1990, the supervisory board, a special body of Vietnamese corporate governance structure, has formed and become a traditionally internal control body in joint-stock companies (JSCs). However, supervisory boards seem not to promote their effectiveness as expected. Many major violations conducted by the board of directors and the CEO took place in large companies, where the supervisory boards did not detect or were complicit in these violations. Most recently, the trend of replacing supervisory boards with independent directors and audit committees has occurred in many public companies in Vietnam. This paradox raises questions about the ineffectiveness of supervisory boards and the reasons causing the situation. To find the answers, the article will focus on analyzing the role of the supervisory board in Vietnamese JSCs compared with international practices. Thereby, to find out the reasons for the limitations of supervisory boards in both legal provision and practice. To conclude the research, the article will make some suggestions for reforming the supervisory board so that this internal control body could bring its effectiveness.

Examining the legitimacy of Sukuk structure via Shariah pronouncements

2019 ◽  
Vol 10 (4) ◽  
pp. 1151-1166 ◽  
Author(s):  
Essia Ries Ahmed ◽  
Aminul Islam ◽  
Azlan Bin Amran
Keyword(s):  
Financial Institutions ◽  
Significant Contribution ◽  
Public Awareness ◽  
Supervisory Board ◽  
Secondary Data ◽  
Descriptive Statistics ◽  
Content Type ◽  
Regulatory Frameworks ◽  
Islamic Financial Institutions

Purpose The purpose of this paper is to investigate and detect disclosure on the legitimacy identity of Sukuk structure in Shariah pronouncements. The study also examines the role of Shariah supervisory board on disclosure of legitimacy in Shariah pronouncements. Design/methodology/approach A total of 54 Islamic Sukuk in Malaysia representing the whole population were selected. Secondary data were used and sourced from Shariah pronouncements on Sukuk. Using descriptive statistics, the existence and the extent of existence of legitimacy disclosure on Sukuk in Islamic financial institutions in Malaysia were ascertained. Findings Using descriptive statistics, the existence and the extent of existence of legitimacy disclosure on Sukuk in Islamic financial institutions in Malaysia was ascertained. The research found that there is empirical evidence showing the effect of Shariah supervisory board on disclosure of legitimacy identity in Shariah pronouncements. Originality/value This study offers significant contribution to existing legitimacy of Sukuk structure literature. The study added a new discussion, i.e. legitimacy disclosure on the Sukuk. The study is intended to increase public awareness for legitimacy identity of Sukuk in the importance of Shariah compliancy not only in the form but also in substance. In addition, this study will give more benefits for Islamic financial institutions in the sense that they should amend some of their regulatory frameworks to push the Sukuk market investors to move toward asset-backed structure.

scholarly journals Lembaga Pengawas Syariah Dalam Sorotan

2019 ◽  
Vol 7 (1) ◽  
pp. 31-51
Author(s):  
Yovenska L.Man
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Supervisory Board ◽  
The Other ◽  
Good Corporate Governance ◽  
Other Hand ◽  
Islamic Financial Institutions ◽  
Implementing Strategies ◽  
The Ideal

Abstract: Islamic financial institutions are currently considered quite significant. However, on the other hand, of course, everything is not free from some shortcomings that should be a concern. Among those questioned, among others, is the role of the Sharia Supervisory Board in terms of implementing Good Corporate Governance (GCG). This paper will focus on discussions regarding planning and implementing strategies towards the Ideal Sharia Supervisory Board

scholarly journals Efektivitas Peran Audit Internal Syariah: Studi Literatur Terbatas

2021 ◽  
Vol 2 (1) ◽  
pp. 14
Author(s):  
Lukman Hakim
Keyword(s):  
Financial Institutions ◽  
Supervisory Board ◽  
Internal Audit ◽  
Governance Structure ◽  
External Factors ◽  
External Auditors ◽  
Good Corporate Governance ◽  
Islamic Financial Institutions ◽  
Internal And External Factors

The Islamic financial Institutions (IFI) governance structure required an internal shariah auditors to assist the duties of Shariah Supervisory Board (SSB). Internal audit was a key player besides SSB, External auditors and the Audit and Governance Committees (AGC). This study was to examine the effectiveness of the role of internal shariah auditors. By adopting limited literature review of indexed international journals was used in this study. The result of the study based on limited literature data sources were the effevtiveness of internal shariah audit on internal audit organizations ini the Good Corporate Governance (GCG) structure, namely the structure, requirements and processes of internal shariah audit. In addition, internal and external factors also affected the effectiveness of internal shariah audit. The Role of the AGC affected the effectiveness of internal audit. Governance and internal audit of Shariah non compliant income were important parts of risk management in IFI

scholarly journals Peran Dan Kompetensi Auditor Syariah Dalam Menunjang Kinerja Perbankan Syariah

2020 ◽  
Vol 4 (2) ◽  
pp. 222-241
Author(s):  
Aulia Putri Oktaviani Jusri ◽  
Erina Maulidha
Keyword(s):  
Financial Institutions ◽  
Islamic Law ◽  
Supervisory Board ◽  
Study Data ◽  
Islamic Banking ◽  
Literature Study ◽  
Internal Auditors ◽  
Islamic Financial Institutions ◽  
Descriptive Approach

The increase in the growth of Islamic banking needs to be supported by the performance of sharia auditors. This study aims to discuss the role and competence of Islamic auditors in supporting the performance of Islamic banking. This type of research uses qualitative methods with a descriptive approach using literature study data. The results of this study indicate that the competencies that must be possessed by sharia auditors include knowledge of Islamic law, fiqh muamalah, skills in accounting and auditing, and special characteristics as sharia auditors. This competence is the key to maximizing the role and competence of sharia auditors to support the performance of Islamic banking. The roles of sharia auditors include as independent auditors, internal auditors, and sharia supervisory board. Sharia compliance tests on Islamic financial institutions are part of the role of the sharia auditor.

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