Corporate Governance and Shariah Governance Issues Among Shariah-Compliant Companies in Malaysia: A Conceptual Paper

Abstract

Corporate governance plays an important role for the economic health of the organizations and society in general. Islamic businesses are currently gaining worldwide acceptance, Malaysia is becoming a centre for Islamic business activities. The concerns for Shariah compliance have brought a new dimension of governance which falls under the Shariah governance framework. To comply with Shariah laws, companies listed in Bursa Malaysia are classified as Shariah-compliant and non-shariah compliant. Therefore, the corporate governance practice among Shariah-compliant companies in Malaysia should be consistent with the Shariah laws. Thus, this conceptual paper aims to highlight the issues and challenges of Shariah governance among Shariah-compliant companies in Malaysia. This paper extends current literature on corporate governance especially the Shariah governance practice in Malaysia. Therefore, the issues and challenges in Shariah governance that were emphasized through this paper should be able to assist the regulators, industrial players, Shariah advisors and researchers in Malaysia.