Corporate governance and Shariah governance for Islamic financial institutions in Malaysia

Abstract

For Islamic financial institutions to expand and maintain stability, two key governance concepts corporate governance and Shariah governance must be applied. Recent events have shown that Shariah governance has drawn more focus from industry players as a consequence of the Central Bank of Malaysia's or Bank Negara Malaysia's instruction that it be adhered to and implemented to ensure Shariah compliance in Islamic financial institutions. This paper intends to explain corporate governance and Shariah governance as they apply to Islamic financial institutions. Additionally, this paper aims to differentiate between Islamic and conventional corporate governance.