Islamic Corporate Social Responsibility Disclosure Index: The Application of Maqasid Shari’ah and Maslahah

Abstract

The paper attempts to develop the Islamic Corporate Social Responsibility (i-CSR) Disclosure index for Shari’ah Compliant Companies (ShCC) in Malaysia. The i-CSR disclosure index was constructed based on the four themes of CSR framework that was established by Bursa Malaysia in 2006, namely, marketplace, workplace, environment and community. In addition to existing CSR framework, this study incorporated the five values of Maqasid Shari’ah namely protection of faith (al-din), protection of human life (al-nafs), protection of intellect (al-aql), protection of posterity (al-nasl) and protection of wealth (al-mal).and Maslahah namely essential (daruriyyat), complementary (hajiyyat) and embellishment (tahsiniyyat). The items of the four themes were developed based on the previous study, annual report of Middle East countries, annual report of the Prime Minister’s CSR Award and National Annual Corporate Report Awards (NACRA). All of the mandatory items required by the approved Accounting Standards, Companies Act, 1965 and Bursa Malaysia Listing Requirement were eliminated in the i-CSR index. A checklist of ninety-three (93) items was used in this study after taking into consideration the ten (10) expert opinions, which were from the regulatory board Shari’ah officer from the Islamic Banking and Finance Institute Malaysia (IBFIM), Shari’ah officer from Jabatan Mufti and Majlis Agama Islam, and academicians from accounting and Islamic studies.