ENHANCING GOOD GOVERNANCE PRACTICES OF WAQF INSTITUTIONS: LEARNING FROM SHARIAH GOVERNANCE FRAMEWORK OF ISLAMIC FINANCIAL INSTITUTIONS
DOI:
https://doi.org/10.53840/ijiefer42Keywords:
Waqf, good governance, Shariah Governance Framework, Islamic Financial InstitutionsAbstract
Throughout Islamic history, waqf is proven as an excellent mechanism for the development of the socio-wellbeing of the Muslim community. Waqf assets can be used for religious and social welfare purposes like building mosques, public health, transportation and education and others. However, due to the limited regulatory framework and control over waqfinstitutions, there are many undesirable issues regarding the waqf management authority. If these issues continue, the waqf institutions will have a negative public image and undermine the objective of the Waqf. This paper highlights the issues on lack of good governance practices in waqf and proposes that waqf institutions should be learn from the established Shariah Governance Framework of Islamic Financial Institutions. The Shariah Governance Framework for Islamic Financial Institutions has been established and well-practiced in the Islamic Finance industry for nearly 10 years. Throughout these years, the industry has seen the excellent impact of good Shariah governance practices in terms of enhancing administration and management of the Islamic financial institutions and thus supporting tremendous growth of the industry. Both waqf and Islamic Financial Institutions share the common basis that they are Shariah compliant based institutions. As such, learning from the success of the other is highly advocated. Thus this paper will examine the governance framework for waqf which is based on trust, accountability, God consciousness, hisbah, and mutual consultation. These principles will be examined and analyse in the context of Shariah Governance Framework of Islamic Financial Institutions to see how Waqf can benefit and learn from the good practices of Islamic Financial Institutions. It is submitted that having a good governance system is a vital way to resolve the issues faced by waqf institutions, which leaves governance an unquestionable aspect for the success of waqf institutions.
Downloads
References
Abdul Ghafar Ismail and Bayu Taufiq Possumah. (2014). Waqf as Economic Matters but Being Left Out as Policy Tools. IRTI Working Papers WP-1436-0.
Abul Hasan M. Sadeq. (2002). Waqf, Perpetual Charity and Poverty Alleviation. International Journal of Social Economics 29, no. 1/2 (2002), pp. 135-151.
Ahmed, U., Omar, M. M., & Faosiy, O. A., (2015). Corporate Governance Model for Waqf Institution in Uganda. World Journal of Islamic History and Civilization, 5 (1): 01-06, 2015 ISSN 2225-0883.
Aishath Muneeza and Rusni Hassan. (2014). Sharī‘ah corporate governance: the need for a special governance code. Corporate Governance, Vol. 14 Iss.1, (2014), pp. 120 – 129.
Bank Negara Malaysia (2010). Guidelines on Shariah Governance Framework for Islamic Financial Institutions.
Bank Negara Malaysia (2019). Shariah Governance.
Cajee, Z. A., (2008). The Revival of Waqf in Muslim Communities: Implementation of the Recommendations of the International Waqf Conference South Africa, Cape Town, 2007. Conference proceedings, International conference on Waqf and Islamic civilization.
Elasreg, H., (2017). Towards A New Role of the Institution of Waqf. Munich Personal RePEc Archive. Retrieved from https://mpra.ub.uni-muenchen.de/id/eprint/80513.
Guidelines on Shariah Governance Framework for Islamic Financial Institutions (2010). Bank Negara Malaysia.
Habib Ahmed. (2007). Waqf-based microfinance: Realizing the social role of Islamic finance. Paper written for the International Seminar on “Integrating Awqaf in the Islamic Financial Sector” Singapore, March 6-7, 2007 World Bank.
Hassan, R., Musa, S. J. A., & Yusoff, A. (2018). Towards Providing the Best Shari’ah Governance Practices for Waqf Based Institutions. Al-Shajarah: Journal of the International Institute of Islamic Thought and Civilization (ISTAC), 165-185.
Hidayatul Ihsan (2007). An exploratory study of waqf accounting and management in Indonesian waqf institutions: the cases of Dompet Dhuafa and UII waqf foundations, PhD thesis, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia.
Hilmy, H. M. A. and Hassan, R. (2019). Shariah Governance Structure of Islamic Financial Institutions in Sri Lanka. International Journal of Management and Applied Research, Vol. 6, No. 4, pp. 245-258.
Humayon A. Dar, Rizwan Malik, Nursofiza Azmi (eds). (2015). Global Islamic Finance Report 2015.
IFSB. (2009). Guiding Principles on Shariah Governance Systems for Institutions Offering Islamic Financial Services. Islamic Financial Service Board. Retrieved from www.ifsb.org.
Ihsan, H., & Ayedh, A. (2015). A Proposed Framework of Islamic Governance for Awqaf Institution in Uganda. World Journal of Islamic History and Civilization, 5 (1): 01-06, 2015.
Ihsan, Hidayatul & Mohamed Ibrahim, Shahul Hameed. (2011). Waqf Accounting and Management in Indonesian Waqf institutions: The Cases of Two Waqf Foundations. Humanomics, 27 (4), pp. 252-269.
Kasim, N., NuHtay, S. N., & Salman, S. A., (2013). Shariah Governance for Islamic Capital Market: A Step Forward. International Journal of Education and Research Vol. 1 No. 6. ISSN: 2201-6740.
Laldin Akram, M., Mek Wok, M., & Sawari, M. F., (2008). Maqasid Syariah Dalam Pelaksanaan Waqaf. Jurnal Pengurusan Jawhar, 2(2), 1–24.
Md. Shahedur Rahaman Chowdhury, Iftekhar Amin Chowdhury, Mohd Zulkifli Muhammad, Modh. Rushdan Yasoa. (2012). Problems of Waqf Administration and Proposals for Improvement: A Study in Malaysia. Journal of Internet Banking and Commerce 17(1). pp. 1-8.
Mohiddin, H., & Nooraini, H. M., (2015). Waqf Development in Malaysia and Singapore: A Comparative Study. Durham theses, Durham University. Retrieved from http://etheses.dur.ac.uk/11118/.
Monzer Kahf, “Financing the Development of Awqaf Property”, Seminar Paper, IRTI, (1998).
Muhammad Issyam Itam@Ismail, Rusni bt Hasan and Syed Musa Alhabshi, “Shariah Governance Framework for Islamic Co-Operatives as an Integral Social Institution in Malaysia”, Intellectual Discourse, Special Issue (2016), 477–500.
Noor Aimi Bt Mohamad Puad, Zurina Shafii, Nurdianawati Irwani Abdullah. (2019). Understanding the Planning Process and Challenges in Shariah Audit Execution: The Case of Malaysian Takaful Operators. Kyoto Bulletin of Islamic Area Studies, 12 (March 2019), pp.69–85
Nurfarahin M. Haridan, Ahmad F. S. Hassan & Yusuf Karbhari. (2018). Governance, Religious Assurance and Islamic Banks: Do Shariah Boards Effectively Serve? Journal of Management and Governance volume 22, pp. 1015–1043.
Ramli, N. M., Salleh, N. H., & Muhamed, N. A., (2015). Discharging Accountability through Governance: Cases from Waqf Institutions in Indonesia. Online Journal of Research in Islamic Studies. [S.l.], v. 2, n. 1, apr. 2015. ISSN 2289-6821.
Rusni Hassan et.al. (2017). Shariah Risk Management Process for Islamic Financial Institutions in the Context of Shariah Governance Framework 2010. UUM Journal of Legal Studies, [S.l.], v. 8, p. 1-15, Dec. 2017. ISSN 0127-9483.
Shafii, Z., Yunanda, R. A., & Rahman, F. K. (2014). Financial and Operational Measures of Waqf Performance: The case of State Islamic Religion Council of Singapore and Malaysia. Seminar Waqf Iqlimi 2014, USIM. http://ddms.usim.edu.my:80/jspui/handle/123456789/9872.
Shamser Mohamed, Zulkarnain Muhamad Sori & Mohamed Eskandar Shah Mohd Rashid. (2016). Challenges Facing Shariah Committee in Malaysian Islamic Financial Institutions. Journal of Islamic Economics, Banking and Finance, Vol. 12, No. 2, April-June 2016, pp. 59-71.
The World Bank, INCEIF and ISRA. (2019). Report on Maximising Social Impact Through Waqf Solutions.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2020 International Journal of Islamic Economics and Finance Research
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
