Reviewing the principles of corporate governance in islamic financial institutions: the importance of islamic values / Daing Maruak Sadek ... [et al.]

The lack of theoretical and empirical research in investigating
the principles of Islamic corporate governance in IFIs is the
driving force behind this research, as part of the effort to address
the issue and thus finding a better solution for corporate
governance practices in IFIs within the Islamic financial
industry. It is argued the establishment of principles on
corporate governance might not be satisfactory whereby
there is a compulsion to reevaluate the corporate governance
principles of IFIs. Thus, the objective of this paper is to review
the principles of corporate governance under the Guidelines
on Corporate Governance for Licensed Islamic (GP1-i) in
Islamic Financial Institutions. Furthermore, to identify the
importance of Islamic values in corporate governance based on
Al-Quran and Al-Sunnah. Generally, it is crucial for corporate
governance in Islamic banks to have a standardized rules, by the
standard setting bodies of Islamic finance to curb the problem of
conventional governance weaknesses. IFIs as an Islamic
organization that governed by the Islamic principles, must
firmly monitor and fulfil their responsibilities as
guided by the Islamic law of Sharia’. Thereby, it is required
to review the principles of corporate governance which will be
supported by the importance of Islamic values. It is hoped
this study will contribute to a better understanding of the
corporate governance issues of IFIs in Malaysia and to have
a deepen analysis of corporate governance with a strong
Islamic foundation which refers to Al-Quran and Al-Sunnah.