Promoting Shariah Governance in Corporation: Special Reference to Shura

Zuhairah Ariff, Abd Ghadas and Hartinie, Abd Aziz and Nazri, Ramli (2016) Promoting Shariah Governance in Corporation: Special Reference to Shura. In: INTERNATIONAL CONFERENCE ON ETHICS IN GOVERNANCE (ICONEG) 2016, 19-20 December 2016, Makassar Golden Hotel.

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Abstract

Al-Shura or consultation is an instrument for reconstruction and reform, mentioned in the Qur’an and suggested in the practices of the Prophet and his Companions Muhammad (PBUH) Generally, it is a tool used by Muslim scholars and rulers or caliphs in arriving a decision or ruling on particular matters or issues relating to the affairs of Muslims. However, there is a little discussion on the applicability of shura in business matters. In developing the framework of shariah corporation, there are few aspects that need to be scrutinized such as legal personality, principle of limited liability, registration of a company and the like. Other than that, board’s decision making is another important structure to be analyzed in order to ensure its operation is shariah-compliant. In normal process in the company, the decision making had been done without collectively. This article discusses the concept of shura in Islam and why it should be applied in companies to promote shariahcompliant practices; especially those which carries out Islamic businesses. In this respect, this paper aims to highlight the role of siyasah syari’yah in promoting the practices of shura in corporate structure.

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