The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) held the 31st meeting of its Governance and Ethics Board (AGEB / the board) recently, via video conference.
The board approved, in principle, the issuance of GS 16 “Institutional Framework for the Implementation of Ethics” after addressing the comments received from industry experts and professionals during three public hearing events. This standard specifies a framework for institutionalising the ethical conduct. It aims to signify the responsibility of various organs of governance and management towards the ethical conduct, guide institutions on how to best institutionalise the ethical conduct, mandate the adoption of the “AAOIFI Code of Ethics for Islamic Finance Professionals” along with other applicable codes of ethics and it also aims to improve the trust quotient of various stakeholders in the values and practices of Islamic financial institutions and the Islamic finance industry. The final standard is expected be issued shortly to the public after completing the due process.
The chairman of the AGEB, Mr. Farrukh Raza, stated: “I would like to thank the board members, the relevant working groups and AAOIFI secretariat for their enormous efforts, which is evidenced in the high-quality deliverables”. He added: “I am pleased the board has, in principle, approved the issuance of GS (16) “Institutional Framework for the Implementation of Ethics”. I am also confident this standard will have a positive impact on the Islamic finance industry by providing guidance to the institutions on how to reduce the likelihood of systematic ethics violations, as well as, detect and respond to any such violation in a timely and effective manner”.
Mr. Omar Mustafa Ansari, the Secretary General, AAOIFI, stated: “AAOIFI in past years put significant efforts on the ethical conduct as it is the essence and spirit of Islam and therefore initiated the comprehensive Ethics project in 2016 which includes issuing ethics related standards and ethics handbook. The “Institutional Framework of the Implementation of Ethics” exposure draft is the second deliverable of the comprehensive project and I am pleased to announce that it will be issued shortly as a final standard”.