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The Practice of Multiple Shari'ah Board Directorship and Fiduciary Duties

The Practice of Multiple Shari'ah Board Directorship and Fiduciary Duties

Abd Hakim Abd Razak
Copyright: © 2020 |Pages: 34
ISBN13: 9781799802181|ISBN10: 1799802183|ISBN13 Softcover: 9781799802198|EISBN13: 9781799802204
DOI: 10.4018/978-1-7998-0218-1.ch021
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MLA

Abd Razak, Abd Hakim. "The Practice of Multiple Shari'ah Board Directorship and Fiduciary Duties." Handbook of Research on Theory and Practice of Global Islamic Finance, edited by Abdul Rafay, IGI Global, 2020, pp. 372-405. https://doi.org/10.4018/978-1-7998-0218-1.ch021

APA

Abd Razak, A. H. (2020). The Practice of Multiple Shari'ah Board Directorship and Fiduciary Duties. In A. Rafay (Ed.), Handbook of Research on Theory and Practice of Global Islamic Finance (pp. 372-405). IGI Global. https://doi.org/10.4018/978-1-7998-0218-1.ch021

Chicago

Abd Razak, Abd Hakim. "The Practice of Multiple Shari'ah Board Directorship and Fiduciary Duties." In Handbook of Research on Theory and Practice of Global Islamic Finance, edited by Abdul Rafay, 372-405. Hershey, PA: IGI Global, 2020. https://doi.org/10.4018/978-1-7998-0218-1.ch021

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Abstract

This chapter examines the legal paradigm of the application of multiple Shari'ah board directorship practice from the common law context of directorial fiduciary duties. It employs the critical legal studies approach to analyse the principles, legislations, case laws, policies, and guidelines in the United States, European Union, the United Kingdom, Ireland and Germany. This study scrutinises the polarity of views concerning the pragmatic Masyaqqah (necessity) surrounding the practice in discussion: the Masyaqqah that encourages and one that discourages the application of the practice and places these against the two predominant directorial fiduciary duties under the common law system namely, the duty to act bona fide and in the best interest of the company, and the duty to avoid conflict of interest. Whilst the practice has proven to benefit Islamic financial institutions (‘IFIs'), the findings also notice the substantial risks it could inflict on the IFIs' business operations; some which could seriously damage their Shari'ah compliance assurance.

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