Islamic banking: towards a model of corporate governance
by Ibrahim Akoum; Abdullah Haron
J. for Global Business Advancement (JGBA), Vol. 4, No. 4, 2011

Abstract: As Islamic banking evolves and expands, the need to tailor more suitable corporate governance structures grows in light of the distinctive aspects that distinguish it from conventional banking. The lack of clear and appropriate corporate governance structures attuned to the specificity of Islamic banking would undoubtedly hinder the growth potential of this industry and cast shadow on its ability to compete and prosper. In particular, the urgency for corporate governance in Islamic banking stems from the fact that some fund providers in Islamic banks are subject to additional risks because of the profit sharing and loss bearing and profit-and-loss sharing features of their funds contracted, and which is not tackled by existing conventional corporate governance models. This paper discusses aspects that need further development and study in order to ensure sustainable development of the provision of Islamic financial services and products.

Online publication date: Fri, 04-Nov-2011

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