This article investigates corporate governance from an Islamic perspective and offers a definition of Islam as well as the sources that underpin Islamic law: i.e., the Qurʾān and Sunnah as primary and ijmāʿ (consensus) and qiyās (analogical reasoning) as secondary sources. Islamic objectives are highlighted by focusing on māl (wealth) and tawḥīd (Unity/Oneness of Allah). The Islamic vision on values is appraised by illustrating accountability (ḥisāb), justice (ʿadālah), consultation (shūrā), integrity (amānah), truthfulness (ṣiddiq), sincerity (ikhlāṣ), intention (niyyah), and brotherhood (ukhuwah). However, points of view on models of corporate governance differ greatly between Islamic and Western (Anglo-American) law. It has been argued that corporate governance from an Islamic perspective does not represent a modern model. This article discusses the advantages it has to offer for Saudi corporate governance.
Maria Bhatti and Ishaq Bhatti, ‘Toward understanding Islamic corporate governance issues in Islamic finance’, Asian Politics and Policy, 2/1 (n.d.): 26. Also, Rifaat Abdel Karim, ‘The nature and rationale of a conceptual framework for financial reporting by Islamic banks’, Accounting and Business Research 25(100) (1995): 285.
Abdel Bashir, ‘Ethical norms and enforcement mechanism in profit-sharing arrangements’, Mid-Atlantic Journal of Business34(3) (1998): 261. It is narrated that when the Prophet Muhammad (pbuh) sent his governor to Yemen, he said to him: ‘You are going to a nation from the people of the scripture, so let the first thing to which you will invite them, be the tawḥīd of Allah’; see Muhammad al-Bukhārī, Ṣaḥīḥ Bukhārī, Ḥadīth No. 469, (Saudi Arabia: Darussalaam for Publication and Distribution, 1999), p. 1649.