The Accounting and Auditing Organization for Islamic Financial Institutions’ (AAOIFI’s) Governance and Ethics Board (AGEB / the board) held its 34^th meeting recently at AAOIFI head office in the Kingdom of Bahrain.

Being the last meeting for the current year, the board reviewed the performance report of 2023 and the performance report of 2020-2023, as the board’s 4-year term is reaching an end. The members further elaborated on the progress of the projects carried forward to the next year.

The principal agenda of the meeting was the review of six exposure drafts (EDs) of governance standards (GSs) namely:

• [ED of] GS “Shari’ah Governance Framework”;
• [ED of] GS “Shari’ah Supervisory Board: Appointment and Composition”;
• [ED of] GS “Shari’ah Supervisory Board: Functions and Operations”;
• [ED of] GS “Shari’ah Supervisory Board: Review and Report”;
• [ED of] GS “Application of Shari’ah Governance Principles to Islamic Finance Windows”; and [ED of] GS “Application of Shari’ah Governance Principles to Islamic Finance Subsidiaries / Associates”.

These EDs are the outcomes of the comprehensive Shari’ah governance framework project, which is aimed at establishing the guiding principles and rules, as well as, best practices for a sound and effective Shari’ah governance framework for Islamic financial institutions.

After due deliberations the board approved, in principle, the issuance of the EDs and directed the secretariat to incorporate the required changes. The EDs are expected to be issued and published on AAOIFI website after completing the due process.

The chairman of the AGEB, Mr. Farrukh Raza, stated that “I would like to thank the board members, the relevant working group and the secretariat for their devotion and commitment to the cause of AAOIFI”. He added that “I am pleased that the board has approved, in principle, the issuance of the said exposure drafts and I am confident it will contribute in providing greater harmonisation of Shari’ah governance practices across jurisdictions”.

Mr. Omar Mustafa Ansari, the Secretary General, AAOIFI stated that “In response to the challenges facing IFIs, AGEB undertook the crucial task of developing a set of governance standards, which provide best practices for a Shari’ah governance framework”. He added that “I would like to express my sincere gratitude to the board members and the relevant working group for their dedication and efforts in the development of the said exposure drafts. Once the exposure drafts are issued, the public hearings will be held in the upcoming months to receive the valuable comments and feedback of the industry stakeholders”.