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Renewal of trust.

Shariah board members like to think of themselves as the brains, the backbone and the muscle behind Islamic banking. Few would argue with the position that when the sector was new, going through the conflicts, complications and soul-searching that was required to change an entire mindset, the original board members could consider themselves radical, reaching into a bright future for Islamic economies.

They were even so bold as to set out a framework under which they would operate. In time this became the list of duties and responsibilities that Shariah boards would uphold, both as individuals and collectively. To look at the list today (see our panel "Checklist of duties of Shariah boards, p28) cannot fail to produce at least a moment of wry humour.

The list that once looked practicable and idealistic (in the positive sense) now looks as though it was written specifically to have its boundaries stretched. Take the last point, about remunerating members "accordingly" for example. Who would have thought that this would come to mean "handsomely for the minimum of hours spent"?

When we inspect the recent ifsb drafts, "Guiding Principles on the Shariah Governance System" and "ifsb Exposure Draft on Conduct of Business", we see, in essence, an attempt to codify the list and provide an all-inclusive set of rules. If that was the ifsb's terms of reference, they may well have succeeded, because the specifics of the list are covered. However, it is in the other element, the spirit of the list, that problems start to arise.

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Publication:Islamic Banking & Finance
Date:Feb 20, 2011
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