29 December2024

PR/028/2024

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) in the 37^th meeting of its Governance and Ethics Board (AGEB / the board) approved the issuance of five governance standards (GSs) on Shari’ah governance.

This set of GSs is the outcome of the comprehensive Shari’ah governance framework project, which is aimed at establishing a set of principles, rules and best practices for Shari’ah governance, and hence, improving the level of Shari’ah compliance in the Islamic finance industry.

The GSs as approved by the board include the following:

• AAOIFI GS 1 (2024) “Shari’ah Governance Framework”;
• AAOIFI GS 19 “Shari’ah Supervisory Board: Appointment and Composition”;
• AAOIFI GS 20 “Shari’ah Supervisory Board: Functions and Operations”;
• AAOIFI GS 21 “Shari’ah Supervisory Board: Review and Report”; and
• AAOIFI GS 22 “Application of Shari’ah Governance Principles to Islamic Finance Subsidiaries / Associates”.

The chairman of the AGEB, Mr. Farrukh Raza, mentioned “I would like to thank the board members, the relevant working group and the secretariat for their dedication and commitment to the development of these GSs”. He added that “I am confident these GSs will improve the quality of Shari’ah governance, enhance public confidence in the Shari’ah compliance of the Islamic financial institutions (IFIs) and reduce the reputational risk of Shari’ah non-compliance”.

On this occasion, Mr. Omar Mustafa Ansari, the Secretary General, AAOIFI stated that “I am pleased to announce the issuance of these GSs and I am certain they will contribute to providing greater harmonisation of Shari’ah governance structures and practices across jurisdictions, and will enhance the transparency in the Islamic finance industry”. He added that “I would like to extend my thanks and appreciation to industry stakeholders who actively attended seven public hearings in English and Arabic languages and provided their comments in writing for the best interest of Islamic finance industry”.

The GSs can be accessed by CLICKING HERE