Corporate Governance Framework for Shariah Compliant Corporation

Abstract

Corporate governance emphasise on the moral and ethical dimensions of managing a company's business. The word corporate governance refers to a system of control of corporation and systems of accountability of those in control. The High Level Finance Committee Report 1999, defines corporate governance as a process of directing a business and the affairs of the company towards enhancing business prosperity and corporate accountability with the ultimate objective of realising long-term shareholder values, whilst taking into account the interest of other stakeholders". Under Shariah, corporate governance main purpose is not only to work for the benefit of the shareholders and the stakeholders but also to acknowledge the duty of mankind to God and to the rest of the people living in the community. This paper analyse the corporate governance legal framework from both conventional and Shariah perspective to identify what would be the appropriate corporate governance model for Shariah compliant corporation.