Corporate governance through the lens of Islam: A comparative review and analysis

Abstract

Corporate governance is a set of relationship between a company’s boards, its shareholders, and other stakeholders as well as provides the structure and mechanism through which the objectives of the company are set and the means for attaining those objectives and monitoring performance are determined. The concept of corporate governance (CG) has gained critical interest and has become a debating point since the mid-1980s. It became an aspect of concern when the corporate world became aware of the importance of protecting the rights of all stakeholders. This paper critically reviews the existing literature on Islamic Corporate Governance (ICG), presents a basic understanding of Islamic Corporate Governance (ICG) and compares the Islamic concept of Corporate Governance to the Organization for Economic Cooperation and Development principles. The study reveals that the Islamic system of governance encourages and promotes the ethical norms of transparency and honesty in every business transaction.