Islamic Wealth Management
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Islamic Wealth Management

Theory and Practice

Edited by Mohamed Ariff and Shamsher Mohamad

From an Islamic perspective, although the ownership of wealth is with God, humans are gifted with wealth to manage it with the objective of benefiting the human society. Such guidance means that wealth management is a process involving the accumulation, generation, purification, preservation and distribution of wealth, all to be conducted carefully in permissible ways. This book is the first to lay out a coherent framework on how wealth management should be conducted in compliance with guiding principles from edicts of a major world religion.
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Chapter 4: Governance framework in Islamic financial institutions

Zulkarnain M. Sori, Shamsher Mohamad and M. Eskandar Shah Rasid

Abstract

What are the issues of governance is discussed in this chapter. We describe the practices of world’s first Shariah Governance Framework mandated by the Malaysia Central Bank to enhance the effectiveness and efficiency of financial institutions in that country. Four main functions of Shariah boards are discussed with respect to Risk Management, Review, Research and Audit, each of which has its own board. The perceptions were sought through structured interviews in 2016 of 16 members of the committee on the mandated governance framework. Though most of them perceived this framework as an important mechanism to monitor the interest of diverse stakeholders such as depositors, investment account holders and shareholders, there were also concerns on effective enforcement mechanisms as well as the need to refine continuous improvements in place to achieve the desired effect of this initiative.

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