An Introduction to Islamic Finance: Theory and Practice

340 AN INTRODUCTION TO ISLAMIC FINANCE

Lack of standardization Corporate governance practices are still evolving
in several jurisdictions where Islamic banking and fi nance is being
practiced and developed. For example, banking laws, rules to appoint
board directors, accounting standards, and Shari’ah board practices are
diverse across Muslim countries. Such heterogeneous environments pose
challenges for existing and new business, regulators, and policymakers.
This lack of standardization weakens the ability to enforce uniform
treatment of laws and lessens the degree of transparency in the fi nancial
sector. Table 15.2 shows how diverse are the Shari’ah - compliance
practices and framework in selected Muslim countries. It is clear from
the table that there is lack of harmonization of standards and practices
across these countries, which raises problems for the integration of
Islamic fi nancial markets with the conventional markets and the rest of
international fi nancial markets.

Transparency Transparency refers to the principle of creating an environ-
ment where information on existing conditions, decisions, and actions is
made accessible, visible, and understandable to all market participants.
Disclosure refers more specifi cally to the process and methodology of pro-
viding the information and of making policy decisions known through
timely dissemination and openness. Accountability refers to the need for
market participants, including the relevant authorities, to justify their
actions and policies and accept responsibility for both decisions and results.

TABLE 15.1 Representation on Shari’ah Boards

Name of the scholar

Number of Positions

at International

Organizations

Number of

Corporate

Positions

Sheikh Nedham Mohamed Saleh Yacoubi 6 72

Dr. Mohammad Daud Bakar 6 32

Sheikh Dr. Abdul Satar Abdul Karim
Abu Ghuddah

572

Dr. Ali Mohuddin Al’Qurra Daghi 5 26

Sheikh Abdullah Sulaiman Al Manee’a 4 34

Dr. Hussain Hamid Hassan 3 29

Justice Muhammad Taqi Usmani 3 14

Dr. Mohamed Ali Elgari 3 62

Dr. Ahmad Ali Abdulla 3 3

Sheikh Mohamed Ali Al-Taskheri 3 1

Source: Funds@work (2009)^30