Corporate Governance in Institutions Offering Islamic Financial Services : Issues and Options

This paper reviews institutions offering Islamic financial services (IIFS) corporate governance challenges and suggests options to address them. It first points out the importance of corporate governance for IIFS, where it would require a distinct treatment from conventional corporate governance and...

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Main Authors:	Grais, Wafik, Pellegrini, Matteo
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTABILITY ACCOUNTING ACCOUNTING STANDARDS ARTICLES OF ASSOCIATION ASSET CLASSIFICATION AUDITING BANK OF THAILAND BANKING LAW BANKING REGULATION BANKING SUPERVISION BANKING SYSTEM BANKS BID BOARD OF DIRECTORS CAPITAL ADEQUACY CAPITAL MARKETS CAPITAL REQUIREMENTS CENTRAL BANK COMPANY COMPETITIVE ENVIRONMENT COMPOUNDING CONFLICT OF INTEREST CONNECTED LENDING CONTRACTUAL RELATIONSHIP COOPERATIVES CORPORATE CHARTERS CORPORATE DECISIONS CORPORATE GOVERNANCE CORPORATE STRUCTURE CORPORATIONS COST OF CAPITAL DEBT DEPOSITS DISCLOSURE DISTRIBUTION OF INCOME DIVIDENDS DUE DILIGENCE DUE DILIGENCE PROCESS EQUALIZATION EXCESSIVE RISK EXCESSIVE RISK TAKING EXCLUSIVE COMPETENCE EXCLUSIVE DOMAIN EXECUTIVE DIRECTORS EXTERNAL AUDITORS EXTERNALITIES FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FIDUCIARY DUTIES FIDUCIARY DUTY FINANCIAL ACCOUNTING FINANCIAL EXPERTISE FINANCIAL FIRMS FINANCIAL INDUSTRY FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REPORTING FINANCIAL RESOURCES FINANCIAL RISKS FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEMS FINANCIAL TRANSACTION FINANCIAL TRANSACTIONS GOVERNANCE ARRANGEMENTS GOVERNANCE SYSTEM INCORPORATED INDIVIDUALS INSTITUTIONAL ENVIRONMENT INSTITUTIONAL STRUCTURE INSURANCE INDUSTRY INVESTMENT POOLS INVESTMENT RISK INVESTMENT RISKS INVESTMENT SERVICES ISLAMIC BANK ISLAMIC BANKING JOINT VENTURE LAWS LEGAL PROTECTION LEGAL SYSTEM LEGISLATION LIMITED LIQUIDATION MANAGEMENT COMPANIES MANAGERS MARKET DISCIPLINE MARKET RISK MARKET VALUE MINORITY SHAREHOLDERS MUTUAL FUNDS NON-BANK NONPERFORMING LOANS OPERATIONAL RISK OWNERSHIP STRUCTURES PERFORMANCE OF FIRMS PERSONS PROFITABILITY PROPRIETARY PROTECTION OF MINORITY SHAREHOLDERS PROTECTION OF SHAREHOLDERS PUBLIC POLICY RATING AGENCIES REGULATORY FRAMEWORK RESERVE BANK OF INDIA RIGHTS OF SHAREHOLDERS RISK TAKING SAVINGS SAVINGS ACCOUNTS SECURITIES SEPARATION OF OWNERSHIP SHAREHOLDER SHAREHOLDER VALUE SHAREHOLDERS SHAREHOLDING SOCIETIES SOCIETY STAKEHOLDER STAKEHOLDERS STATE ASSETS STATE OWNERSHIP STATEMENT STATEMENTS STOCK MARKET STOCK MARKETS SUPERVISORY AGENCIES TAKEOVERS TRANSPARENCY
Online Access:	http://documents.worldbank.org/curated/en/2006/11/7157780/corporate-governance-institutions-offering-islamic-financial-services-issues-options http://hdl.handle.net/10986/9030

id	okr-10986-9030
recordtype	oai_dc
spelling	okr-10986-90302021-04-23T14:02:41Z Corporate Governance in Institutions Offering Islamic Financial Services : Issues and Options Grais, Wafik Pellegrini, Matteo ACCOUNTABILITY ACCOUNTING ACCOUNTING STANDARDS ARTICLES OF ASSOCIATION ASSET CLASSIFICATION AUDITING BANK OF THAILAND BANKING LAW BANKING REGULATION BANKING SUPERVISION BANKING SYSTEM BANKS BID BOARD OF DIRECTORS CAPITAL ADEQUACY CAPITAL MARKETS CAPITAL REQUIREMENTS CENTRAL BANK COMPANY COMPETITIVE ENVIRONMENT COMPOUNDING CONFLICT OF INTEREST CONNECTED LENDING CONTRACTUAL RELATIONSHIP COOPERATIVES CORPORATE CHARTERS CORPORATE DECISIONS CORPORATE GOVERNANCE CORPORATE STRUCTURE CORPORATIONS COST OF CAPITAL DEBT DEPOSITS DISCLOSURE DISTRIBUTION OF INCOME DIVIDENDS DUE DILIGENCE DUE DILIGENCE PROCESS EQUALIZATION EXCESSIVE RISK EXCESSIVE RISK TAKING EXCLUSIVE COMPETENCE EXCLUSIVE DOMAIN EXECUTIVE DIRECTORS EXTERNAL AUDITORS EXTERNALITIES FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FIDUCIARY DUTIES FIDUCIARY DUTY FINANCIAL ACCOUNTING FINANCIAL EXPERTISE FINANCIAL FIRMS FINANCIAL INDUSTRY FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REPORTING FINANCIAL RESOURCES FINANCIAL RISKS FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEMS FINANCIAL TRANSACTION FINANCIAL TRANSACTIONS GOVERNANCE ARRANGEMENTS GOVERNANCE SYSTEM INCORPORATED INDIVIDUALS INSTITUTIONAL ENVIRONMENT INSTITUTIONAL STRUCTURE INSURANCE INDUSTRY INVESTMENT POOLS INVESTMENT RISK INVESTMENT RISKS INVESTMENT SERVICES ISLAMIC BANK ISLAMIC BANKING JOINT VENTURE LAWS LEGAL PROTECTION LEGAL SYSTEM LEGISLATION LIMITED LIQUIDATION MANAGEMENT COMPANIES MANAGERS MARKET DISCIPLINE MARKET RISK MARKET VALUE MINORITY SHAREHOLDERS MUTUAL FUNDS NON-BANK NONPERFORMING LOANS OPERATIONAL RISK OWNERSHIP STRUCTURES PERFORMANCE OF FIRMS PERSONS PROFITABILITY PROPRIETARY PROTECTION OF MINORITY SHAREHOLDERS PROTECTION OF SHAREHOLDERS PUBLIC POLICY RATING AGENCIES REGULATORY FRAMEWORK RESERVE BANK OF INDIA RIGHTS OF SHAREHOLDERS RISK TAKING SAVINGS SAVINGS ACCOUNTS SECURITIES SEPARATION OF OWNERSHIP SHAREHOLDER SHAREHOLDER VALUE SHAREHOLDERS SHAREHOLDING SOCIETIES SOCIETY STAKEHOLDER STAKEHOLDERS STATE ASSETS STATE OWNERSHIP STATEMENT STATEMENTS STOCK MARKET STOCK MARKETS SUPERVISORY AGENCIES TAKEOVERS TRANSPARENCY This paper reviews institutions offering Islamic financial services (IIFS) corporate governance challenges and suggests options to address them. It first points out the importance of corporate governance for IIFS, where it would require a distinct treatment from conventional corporate governance and highlights three cases of distress of IIFS. It then dwells on prevailing corporate governance arrangements addressing IIFS' needs to ensure the consistency of their operations with Islamic finance principles and the protection of the financial interests of a stakeholders' category, namely depositors holding unrestricted investment accounts. It raises the issues of independence, confidentiality, competence, consistency, and disclosure that may bear on pronouncements of consistency with Islamic finance principles. It also discusses the agency problem of depositors holding unrestricted investment accounts. The paper argues for a governance framework that combines internal and external arrangements and relies significantly on transparency and disclosure of market relevant information. 2012-06-26T15:06:31Z 2012-06-26T15:06:31Z 2006-11 http://documents.worldbank.org/curated/en/2006/11/7157780/corporate-governance-institutions-offering-islamic-financial-services-issues-options http://hdl.handle.net/10986/9030 English en_US Policy Research Working Paper; No. 4052 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTABILITY ACCOUNTING ACCOUNTING STANDARDS ARTICLES OF ASSOCIATION ASSET CLASSIFICATION AUDITING BANK OF THAILAND BANKING LAW BANKING REGULATION BANKING SUPERVISION BANKING SYSTEM BANKS BID BOARD OF DIRECTORS CAPITAL ADEQUACY CAPITAL MARKETS CAPITAL REQUIREMENTS CENTRAL BANK COMPANY COMPETITIVE ENVIRONMENT COMPOUNDING CONFLICT OF INTEREST CONNECTED LENDING CONTRACTUAL RELATIONSHIP COOPERATIVES CORPORATE CHARTERS CORPORATE DECISIONS CORPORATE GOVERNANCE CORPORATE STRUCTURE CORPORATIONS COST OF CAPITAL DEBT DEPOSITS DISCLOSURE DISTRIBUTION OF INCOME DIVIDENDS DUE DILIGENCE DUE DILIGENCE PROCESS EQUALIZATION EXCESSIVE RISK EXCESSIVE RISK TAKING EXCLUSIVE COMPETENCE EXCLUSIVE DOMAIN EXECUTIVE DIRECTORS EXTERNAL AUDITORS EXTERNALITIES FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FIDUCIARY DUTIES FIDUCIARY DUTY FINANCIAL ACCOUNTING FINANCIAL EXPERTISE FINANCIAL FIRMS FINANCIAL INDUSTRY FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REPORTING FINANCIAL RESOURCES FINANCIAL RISKS FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEMS FINANCIAL TRANSACTION FINANCIAL TRANSACTIONS GOVERNANCE ARRANGEMENTS GOVERNANCE SYSTEM INCORPORATED INDIVIDUALS INSTITUTIONAL ENVIRONMENT INSTITUTIONAL STRUCTURE INSURANCE INDUSTRY INVESTMENT POOLS INVESTMENT RISK INVESTMENT RISKS INVESTMENT SERVICES ISLAMIC BANK ISLAMIC BANKING JOINT VENTURE LAWS LEGAL PROTECTION LEGAL SYSTEM LEGISLATION LIMITED LIQUIDATION MANAGEMENT COMPANIES MANAGERS MARKET DISCIPLINE MARKET RISK MARKET VALUE MINORITY SHAREHOLDERS MUTUAL FUNDS NON-BANK NONPERFORMING LOANS OPERATIONAL RISK OWNERSHIP STRUCTURES PERFORMANCE OF FIRMS PERSONS PROFITABILITY PROPRIETARY PROTECTION OF MINORITY SHAREHOLDERS PROTECTION OF SHAREHOLDERS PUBLIC POLICY RATING AGENCIES REGULATORY FRAMEWORK RESERVE BANK OF INDIA RIGHTS OF SHAREHOLDERS RISK TAKING SAVINGS SAVINGS ACCOUNTS SECURITIES SEPARATION OF OWNERSHIP SHAREHOLDER SHAREHOLDER VALUE SHAREHOLDERS SHAREHOLDING SOCIETIES SOCIETY STAKEHOLDER STAKEHOLDERS STATE ASSETS STATE OWNERSHIP STATEMENT STATEMENTS STOCK MARKET STOCK MARKETS SUPERVISORY AGENCIES TAKEOVERS TRANSPARENCY
spellingShingle	ACCOUNTABILITY ACCOUNTING ACCOUNTING STANDARDS ARTICLES OF ASSOCIATION ASSET CLASSIFICATION AUDITING BANK OF THAILAND BANKING LAW BANKING REGULATION BANKING SUPERVISION BANKING SYSTEM BANKS BID BOARD OF DIRECTORS CAPITAL ADEQUACY CAPITAL MARKETS CAPITAL REQUIREMENTS CENTRAL BANK COMPANY COMPETITIVE ENVIRONMENT COMPOUNDING CONFLICT OF INTEREST CONNECTED LENDING CONTRACTUAL RELATIONSHIP COOPERATIVES CORPORATE CHARTERS CORPORATE DECISIONS CORPORATE GOVERNANCE CORPORATE STRUCTURE CORPORATIONS COST OF CAPITAL DEBT DEPOSITS DISCLOSURE DISTRIBUTION OF INCOME DIVIDENDS DUE DILIGENCE DUE DILIGENCE PROCESS EQUALIZATION EXCESSIVE RISK EXCESSIVE RISK TAKING EXCLUSIVE COMPETENCE EXCLUSIVE DOMAIN EXECUTIVE DIRECTORS EXTERNAL AUDITORS EXTERNALITIES FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FIDUCIARY DUTIES FIDUCIARY DUTY FINANCIAL ACCOUNTING FINANCIAL EXPERTISE FINANCIAL FIRMS FINANCIAL INDUSTRY FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REPORTING FINANCIAL RESOURCES FINANCIAL RISKS FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEMS FINANCIAL TRANSACTION FINANCIAL TRANSACTIONS GOVERNANCE ARRANGEMENTS GOVERNANCE SYSTEM INCORPORATED INDIVIDUALS INSTITUTIONAL ENVIRONMENT INSTITUTIONAL STRUCTURE INSURANCE INDUSTRY INVESTMENT POOLS INVESTMENT RISK INVESTMENT RISKS INVESTMENT SERVICES ISLAMIC BANK ISLAMIC BANKING JOINT VENTURE LAWS LEGAL PROTECTION LEGAL SYSTEM LEGISLATION LIMITED LIQUIDATION MANAGEMENT COMPANIES MANAGERS MARKET DISCIPLINE MARKET RISK MARKET VALUE MINORITY SHAREHOLDERS MUTUAL FUNDS NON-BANK NONPERFORMING LOANS OPERATIONAL RISK OWNERSHIP STRUCTURES PERFORMANCE OF FIRMS PERSONS PROFITABILITY PROPRIETARY PROTECTION OF MINORITY SHAREHOLDERS PROTECTION OF SHAREHOLDERS PUBLIC POLICY RATING AGENCIES REGULATORY FRAMEWORK RESERVE BANK OF INDIA RIGHTS OF SHAREHOLDERS RISK TAKING SAVINGS SAVINGS ACCOUNTS SECURITIES SEPARATION OF OWNERSHIP SHAREHOLDER SHAREHOLDER VALUE SHAREHOLDERS SHAREHOLDING SOCIETIES SOCIETY STAKEHOLDER STAKEHOLDERS STATE ASSETS STATE OWNERSHIP STATEMENT STATEMENTS STOCK MARKET STOCK MARKETS SUPERVISORY AGENCIES TAKEOVERS TRANSPARENCY Grais, Wafik Pellegrini, Matteo Corporate Governance in Institutions Offering Islamic Financial Services : Issues and Options
relation	Policy Research Working Paper; No. 4052
description	This paper reviews institutions offering Islamic financial services (IIFS) corporate governance challenges and suggests options to address them. It first points out the importance of corporate governance for IIFS, where it would require a distinct treatment from conventional corporate governance and highlights three cases of distress of IIFS. It then dwells on prevailing corporate governance arrangements addressing IIFS' needs to ensure the consistency of their operations with Islamic finance principles and the protection of the financial interests of a stakeholders' category, namely depositors holding unrestricted investment accounts. It raises the issues of independence, confidentiality, competence, consistency, and disclosure that may bear on pronouncements of consistency with Islamic finance principles. It also discusses the agency problem of depositors holding unrestricted investment accounts. The paper argues for a governance framework that combines internal and external arrangements and relies significantly on transparency and disclosure of market relevant information.
format	Publications & Research :: Policy Research Working Paper
author	Grais, Wafik Pellegrini, Matteo
author_facet	Grais, Wafik Pellegrini, Matteo
author_sort	Grais, Wafik
title	Corporate Governance in Institutions Offering Islamic Financial Services : Issues and Options
title_short	Corporate Governance in Institutions Offering Islamic Financial Services : Issues and Options
title_full	Corporate Governance in Institutions Offering Islamic Financial Services : Issues and Options
title_fullStr	Corporate Governance in Institutions Offering Islamic Financial Services : Issues and Options
title_full_unstemmed	Corporate Governance in Institutions Offering Islamic Financial Services : Issues and Options
title_sort	corporate governance in institutions offering islamic financial services : issues and options
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/11/7157780/corporate-governance-institutions-offering-islamic-financial-services-issues-options http://hdl.handle.net/10986/9030
_version_	1764406756716314624

Corporate Governance in Institutions Offering Islamic Financial Services : Issues and Options

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