Human Governance Index for State Islamic Religious Councils in Malaysia

Abstract

State Islamic Religious Council (SIRCs) in Malaysia were established for the social welfare under the purview of state enactments in an Islamic setting. Despite the absence of a profit motive, accountability must be upheld as it is set up to be the guardian of resources so that the trust of stakeholders could be obtained. SIRCs are expected to uphold their ethics and values in their overall operations. However, a number of negative cases of SIRCs were reported in the local media which has tarnished the image of SIRCs. Thus governors of SIRCs should managed their human assets well. Human governance is the governors’ commitment to improve employees’ values and ethical behavior in the organization through their leadership, integrity fostered in the organization, training that the governors’ attended and internal control that has been put in place. The objective of the study is to examine whether Human Governance Index (HG INDEX) could be applied to SIRCs. HG INDEX comprise of 4 components which are (i) BOD Leadership, (ii) Level of Integrity Index, (iii) BOD Quantity of Training Index, and (iv) Quality of Internal Control System Index . Thirteen(13), 2019 annual reports of SIRCs were used as a basis for data collection. Based on the findings, Quality of Internal control and Level of Integrity were found to be the highest disclosed index. Overall, HG index was found to be low for SIRCs. Thus Governors of SIRCs can use the findings of the study to increase their transparency and accountability to stakeholders by focusing on HG in order to gain the public trust.