An Introduction to Islamic Finance: Theory and Practice

Corporate Governance 349

who said: “The truthful merchant [is rewarded by being ranked] on the Day of

Resurrection with prophets, veracious souls, martyrs and pious people” (Tir-

midhi, No: 1130).

23. Boatright (2002).


24. Considering the fact that several of the “renowned” corporate leaders involved
    in the current fi nancial crisis are graduates of top academic institutions in the
    US, including the Harvard Business School, a national discussion has started
    to review academic programs. Schools have also started to make one course in
    corporate responsibility a requirement for graduation.


25. See Grais and Iqbal (2006); Iqbal (2006); and Greuning and Iqbal (2006) for
    further details.


26. Grais and Pellegrini (2005).


27. They exist in all Islamic countries with the exception of Iran, where compliance
    of the whole banking system with the Shari’ah is guaranteed and monitored by
    the central bank.


28. A fatwa is a religious edict or proclamation. It is a legal opinion issued by a
    qualifi ed Muslim scholar on matters of religious belief and practice.


29. Grais and Pellegrini (2005).


30. Shari’ah Scholars — A Network Analytic Perspective, 12th April 2010, Version
    4.0, [email protected]


31. Ibid.


32. Ibid. A survey of 13 IFIs shows the level of transparency to be low. All 13
    declared the existence of an SSB within the organization and disclosed informa-
    tion on its composition. However, only seven made the annual report of the SSB
    easily accessible and seven did not provide detailed information on the profes-
    sional background of the SSB members. Moreover, only two IFIs disclosed the
    fatwas authorizing the provision of fi nancial services and products. Only one
    disclosed provisions for decision - making and interaction with other bodies of
    the fi rm. Finally, only one IFI disclosed on its website the duties and obligations
    of the SSB. The IFIs’ practice of limited disclosure would not inspire confi dence
    in Shari’ah compliance.


33. Van Den Berghe (2009).


34. Ibid.


35. Ibid.


36. Edelman (2009).


37. Van Den Berghe (2009).


38. Becht (2009): 2.


39. Kirkpatrick (2009).