Board, Shariah Committee and senior management: Updates on the BNM Shariah Governance Policy Document

Nurul Afidah Mohamad Yusof; Mohammad Mahbubi Ali

doi:10.33102/jmifr.v18i2.374

Authors

Nurul Afidah Mohamad Yusof Faculty of Business and Finance, Universiti Tunku Abdul Rahman, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat 31900, Kampar Perak, Malaysia
Mohammad Mahbubi Ali International Institute of Advanced Islamic Studies, Jalan Elmu, Off Jalan Universiti, 59100 Kuala Lumpur, Malaysia; Tazkia University College, City, Jl. Ir. H. Djuanda No. 78 Sentul, Citaringgul, Kec. Babakan Madang, Kota Bogor, Jawa Barat 16810, Indonesia

DOI:

https://doi.org/10.33102/jmifr.v18i2.374

Abstract

The paper aims to examine the relevant provisions of the newly released BNM Shariah Governance Policy Document relating to the board of directors, Shariah Committee and senior management of the Islamic Financial Institutions (IFIs) in Malaysia. The study is qualitative-based research. It reviews two documents, i.e. BNM Shariah Governance Framework 2010, and BNM Shariah Governance policy 2019. It uses a content analysis approach to understand and compare the two frameworks from the perspective of the board, the Shariah Committee and senior management. The study finds that SGP 2019 enhanced features of the preceding SGF 2010 revolving around enhanced board oversight and roles over Shariah governance, strengthened Shariah Committee (SC) requirements in providing independent and sound advice to IFIs, as well as a greater expectation for the board and senior management in promoting Shariah compliance culture. This paper examines the areas which have been addressed by the new framework to improve several issues which have been highlighted during the implementation of the previous framework, SGF 2010.

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Author Biographies

Nurul Afidah Mohamad Yusof, Faculty of Business and Finance, Universiti Tunku Abdul Rahman, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat 31900, Kampar Perak, Malaysia

Mohammad Mahbubi Ali, International Institute of Advanced Islamic Studies, Jalan Elmu, Off Jalan Universiti, 59100 Kuala Lumpur, Malaysia; Tazkia University College, City, Jl. Ir. H. Djuanda No. 78 Sentul, Citaringgul, Kec. Babakan Madang, Kota Bogor, Jawa Barat 16810, Indonesia

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