The moral code embedded in Islam emphasises the relationship of human beings with their Creator. Islamic belief is that human beings are guided by motivations that are governed by the higher instincts which God has created within them; when motivations are properly controlled, regulated and disciplined, the result is an ideal system of production, exchange and distribution, which in turn becomes the basis of welfare in society.
On the contrary, if no proper checks and balances are maintained, these instinctive motivations lead to injustice, exploitation, selfishness, intolerance and a mad race to accumulate wealth. Islamic ethical values are neither time-bound nor biased by the whims of human beings; they prescribe compassion, leniency and benevolence over and above the basic universal values and are intended to secure the welfare of the community as a whole.
The four fundamental principles of Corporate Governance as derived from Islamic principles and beliefs are:
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Transparency
“O ye who believe! When ye deal with each other, in transactions involving future obligations in a fixed period of time, reduce them to writing. Let a scribe write down faithfully as between the parties” (The Qur'an 2:282)
- Responsibility
“O ye who believe! Betray not the trust of Allah and the Messenger, nor misappropriate knowingly things entrusted to you” (The Qur'an 8:27)
Professionals serving in the Islamic financial services industry must have a deep commitment to upholding the principles of business ethics emphasised in Islamic economics, in particular:
- Acting with honesty and trust in transactions in which the parties are unambiguous and frank and have goodwill for each other.
- Ensuring all investment in business is linked to productive economic activity that is also permissible according to the Shari'ah.