Corporate governance from the civil law and syariah perspectives; An appraisal

Hartinie, Abd Aziz and Zuhairah Ariff, Abd Ghadas and Halyani, Hassan (2018) Corporate governance from the civil law and syariah perspectives; An appraisal. In: INTERNATIONAL CONFERENCE ON LAW AND GLOBALISATION 2018, 21 Oct 2018, UNISZA.

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Abstract

Under the civil law, corporate governance is one key element in improving economic efficiency and growth as well as enhancing investor confidence. It involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance is basically the moral and ethical dimensions of managing a company’s business and there are three underlying principles of corporate governance, namely accountability, transparency and trustworthiness. In Syariah, the concept of corporation is not similar to the Civil law as the business structures are based on the musyarakah (partnership) concept. Nonetheless, it is observed that the principles emphasized under civil law corporate governance such as accountability, transparency and trustworthiness are not new under the Syariah. It is also observed the structure of board and good decision making which are emphasized in corporate governance are akin to the practice of Syura (consultation) and Hisba (accountability) in Syariah. This paper discusses and analyzes the concept of corporate governance from both the Civil law and Syariah. Research methodologies adopted in this paper are doctrinal and statutory analysis.

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