AAOIFI Governance and Ethics Board held its 1st Meeting After Formation

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In continuation of AAOIFI’s poineering efforts to serve the global Islamic finance industry through the development of its governance and ethical standards, and in its keenness to enhance governance within the industry, AAOIFI’s General Assembly took a resolution, a few months back, approving the formation of techical boards in charge of standards development. As a result, the number of boards was increased from 2, as it had been the case since long, to 3 boards. This included the formation of AAOIFI Goverannce and Ethics Board (AGEB), which consits of 15 experts in the area of governance and ethics from different parts of the world, will be responsible for the development of relevant standards, guidelines, and procedural rules. The formation of the board took into consideration proper representation of different sectors within the Islamic finance industry and those serving such industry, as well as, the disciplinary backgrounds and work expertise of their memebrs. The main focus of AGEB will be Shari’ah governance including Shari’ah compliance and Shari’ah audit as well as the codes of ethics and conduct for Islamic financiaal institutions. The board aims to support and assist the global finance industry in the vital area of governance and ethics, particularly central banks, and financial regulatory, supervisory, and law-making authorities worldwide.

In this regard, AAOIFI Governance and Ethics Board (AGEB) held its 1st meeting within its 1st term of office a few weeks ago in the Kingdom of Bahrain.

Dr. Hamed Hassan Merah, Secretary General of AAOIFI, opened the meeting and welcomed the members of the board. He thanked them for having taken up the the AGEB’s membership despite their eventful work agendas and engagements, and wished them a prosperous term of office. He reminded them that the Islamic finance industry expects a lot from this technical board which includes a number of distinguished experts and professionals from a variety of professional, disciplinary, and geographical backgrounds

At the commencement of the meeting, AGEB members unanimously elected Dr. Ishrat Husain (former Governor, Central Bank of Pakistan, and a world-renowned expert in the area of governance) as Chairman and Shaikh Esam Ishaq (a distinguished Shari’ah scholar and expert) as Vice Chairman. The Chairman appreciated the efforts extended by AAOIFI for development of the new strategy and the 4-year plan, and for the recent formation of the AGEB with membership of distinguished experts from around the globe, in addition to the new approach it has taken with regard to a focused and more structured goverannce and ethical standards development and review process. He also extended his thanks to the members for putting their trust on his leadership and outstanding professional efforts and contribution to the industry.

Then, the members discussed the board’s strategy and 4-year plan in the area of development, dissemination and adoption of AAOIFI governance and ethics standards. The new plan includes a number of new and revised governance and ethics standards, and research projects within the scope of the board’s mandate. Key projects for commencement of work inter-alia include the standards development and revision on the internal and external Shari’ah audits, Shari’ah compliance, organization of central Shari’ah boards in different countries, comprehensive codes of conduct for Islamic financial institutions and their employees and auditors. AGEB also emphasized on the need for improved regulatory interaction and collaboration with other standard setting bodies.

Furthermore, the Board reviewed the existing projects in the pipeline, and approved the overall work plan in addition to its plan for the year 2016, and then formed working groups from amongst board members to carry out development process on these projects.

The next AGEB meeting will be held InshaAllah at end of July 2016 in the Kingdom of Bahrain.