Corporate Governance and Stakeholders’ Financial Interests in Institutions Offering Islamic Financial Services

This paper focuses on the corporate governance arrangements of institutions offering Islamic financial services (IIFS) aimed at protecting stakeholders' financial interests. Many IIFS corporate governance issues are common with those of their conventional counterparts. Others are distinctive. I...

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Main Authors:	Grais, Wafik, Pellegrini, Matteo
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTING ACCOUNTING STANDARDS ACQUISITION ASSETS AUDITING AUDITORS BALANCE SHEET BANK GUARANTEES BANKING LAW BANKING SUPERVISION BANKS BORROWING CAPITAL ADEQUACY CAPITAL MARKETS CAPITAL REQUIREMENTS CENTRAL BANKS CONFLICT OF INTEREST CONTROLLING SHAREHOLDERS CORPORATE CONTROL CORPORATE GOVERNANCE CORPORATE GOVERNANCE CODE CORPORATE STRUCTURE CORPORATE TAKEOVERS DEPOSITS DISCLOSURE DIVIDEND PAYMENTS DIVIDENDS EQUALIZATION EXPROPRIATION FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FINANCIAL ACCOUNTING FINANCIAL INDUSTRY FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL REPORTING FINANCIAL SERVICES FINANCIAL STATEMENTS FINANCIAL SYSTEMS FINANCIAL TRANSACTION FRANCHISE FREE BANKING GOLDEN SHARES HOSTILE TAKEOVERS INDEPENDENT DIRECTORS INSTITUTIONAL INFRASTRUCTURE INTERESTS OF MINORITY SHAREHOLDERS INTERNATIONAL BUSINESSES INVESTMENT DECISIONS INVESTMENT POOLS INVESTMENT PORTFOLIO INVESTMENT RISK INVESTMENT RISKS INVESTMENT SERVICES ISLAMIC BANK ISLAMIC BANKING LAWS LEGISLATION LEVEL PLAYING FIELD LIMITED LIQUIDITY MANAGERS MANDATES MARKET DISCIPLINE MARKET INSTITUTIONS MARKET RISK MERGER MUTUAL FUNDS NON-BANK OPEN INTEREST OPERATIONAL RISK OWNERSHIP STRUCTURE PAYMENT SYSTEMS PRIVATE EQUITY PROFIT SHARING PROFITABILITY PROTECTION OF MINORITY SHAREHOLDERS RATING AGENCIES REGULATORY AUTHORITIES REGULATORY FRAMEWORK REGULATORY INSTITUTIONS REGULATORY REGIME REGULATORY SYSTEMS RESERVE BANK OF INDIA RESERVE REQUIREMENT RETAINED EARNINGS RISK MANAGEMENT RISK SHARING SAVINGS SAVINGS ACCOUNTS SECURITIES SECURITIES REGULATION SECURITIES REGULATOR SEPARATION OF OWNERSHIP SEPARATION OF OWNERSHIP FROM CONTROL SHAREHOLDER SHAREHOLDERS SOCIAL SERVICES SPECIFIC INVESTMENTS STAKEHOLDER STAKEHOLDER PROTECTION STAKEHOLDERS STATEMENT STOCK OPTIONS STOCKHOLDERS SYSTEMIC BANKING CRISES TAKEOVER TAXATION TRANSPARENCY VOTING SHARES
Online Access:	http://documents.worldbank.org/curated/en/2006/11/7157793/corporate-governance-stakeholders-financial-interests-institutions-offering-islamic-financial-services http://hdl.handle.net/10986/9028

id	okr-10986-9028
recordtype	oai_dc
spelling	okr-10986-90282021-04-23T14:02:41Z Corporate Governance and Stakeholders’ Financial Interests in Institutions Offering Islamic Financial Services Grais, Wafik Pellegrini, Matteo ACCOUNTING ACCOUNTING STANDARDS ACQUISITION ASSETS AUDITING AUDITORS BALANCE SHEET BANK GUARANTEES BANKING LAW BANKING SUPERVISION BANKS BORROWING CAPITAL ADEQUACY CAPITAL MARKETS CAPITAL REQUIREMENTS CENTRAL BANKS CONFLICT OF INTEREST CONTROLLING SHAREHOLDERS CORPORATE CONTROL CORPORATE GOVERNANCE CORPORATE GOVERNANCE CODE CORPORATE STRUCTURE CORPORATE TAKEOVERS DEPOSITS DISCLOSURE DIVIDEND PAYMENTS DIVIDENDS EQUALIZATION EXPROPRIATION FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FINANCIAL ACCOUNTING FINANCIAL INDUSTRY FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL REPORTING FINANCIAL SERVICES FINANCIAL STATEMENTS FINANCIAL SYSTEMS FINANCIAL TRANSACTION FRANCHISE FREE BANKING GOLDEN SHARES HOSTILE TAKEOVERS INDEPENDENT DIRECTORS INSTITUTIONAL INFRASTRUCTURE INTERESTS OF MINORITY SHAREHOLDERS INTERNATIONAL BUSINESSES INVESTMENT DECISIONS INVESTMENT POOLS INVESTMENT PORTFOLIO INVESTMENT RISK INVESTMENT RISKS INVESTMENT SERVICES ISLAMIC BANK ISLAMIC BANKING LAWS LEGISLATION LEVEL PLAYING FIELD LIMITED LIQUIDITY MANAGERS MANDATES MARKET DISCIPLINE MARKET INSTITUTIONS MARKET RISK MERGER MUTUAL FUNDS NON-BANK OPEN INTEREST OPERATIONAL RISK OWNERSHIP STRUCTURE PAYMENT SYSTEMS PRIVATE EQUITY PROFIT SHARING PROFITABILITY PROTECTION OF MINORITY SHAREHOLDERS RATING AGENCIES REGULATORY AUTHORITIES REGULATORY FRAMEWORK REGULATORY INSTITUTIONS REGULATORY REGIME REGULATORY SYSTEMS RESERVE BANK OF INDIA RESERVE REQUIREMENT RETAINED EARNINGS RISK MANAGEMENT RISK SHARING SAVINGS SAVINGS ACCOUNTS SECURITIES SECURITIES REGULATION SECURITIES REGULATOR SEPARATION OF OWNERSHIP SEPARATION OF OWNERSHIP FROM CONTROL SHAREHOLDER SHAREHOLDERS SOCIAL SERVICES SPECIFIC INVESTMENTS STAKEHOLDER STAKEHOLDER PROTECTION STAKEHOLDERS STATEMENT STOCK OPTIONS STOCKHOLDERS SYSTEMIC BANKING CRISES TAKEOVER TAXATION TRANSPARENCY VOTING SHARES This paper focuses on the corporate governance arrangements of institutions offering Islamic financial services (IIFS) aimed at protecting stakeholders' financial interests. Many IIFS corporate governance issues are common with those of their conventional counterparts. Others are distinctive. In particular they offer unrestricted investment accounts that share risks with shareholders but without a voting right. This paper first reviews internal and external arrangements put in place by IIFS to protect stakeholders' financial interests. It discusses shortcomings notably in terms of potential conflict of interest between shareholders and holders of unrestricted investment accounts. It then suggests a corporate governance framework that combines internal and external arrangements to provide safeguards to unrestricted investment account holders without overburdening IIFS' financial performance. The paper uses a review of 13 IIFS and regulatory information from countries where IIFS have developed the most. 2012-06-26T14:57:09Z 2012-06-26T14:57:09Z 2006-11 http://documents.worldbank.org/curated/en/2006/11/7157793/corporate-governance-stakeholders-financial-interests-institutions-offering-islamic-financial-services http://hdl.handle.net/10986/9028 English en_US Policy Research Working Paper; No. 4053 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING ACCOUNTING STANDARDS ACQUISITION ASSETS AUDITING AUDITORS BALANCE SHEET BANK GUARANTEES BANKING LAW BANKING SUPERVISION BANKS BORROWING CAPITAL ADEQUACY CAPITAL MARKETS CAPITAL REQUIREMENTS CENTRAL BANKS CONFLICT OF INTEREST CONTROLLING SHAREHOLDERS CORPORATE CONTROL CORPORATE GOVERNANCE CORPORATE GOVERNANCE CODE CORPORATE STRUCTURE CORPORATE TAKEOVERS DEPOSITS DISCLOSURE DIVIDEND PAYMENTS DIVIDENDS EQUALIZATION EXPROPRIATION FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FINANCIAL ACCOUNTING FINANCIAL INDUSTRY FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL REPORTING FINANCIAL SERVICES FINANCIAL STATEMENTS FINANCIAL SYSTEMS FINANCIAL TRANSACTION FRANCHISE FREE BANKING GOLDEN SHARES HOSTILE TAKEOVERS INDEPENDENT DIRECTORS INSTITUTIONAL INFRASTRUCTURE INTERESTS OF MINORITY SHAREHOLDERS INTERNATIONAL BUSINESSES INVESTMENT DECISIONS INVESTMENT POOLS INVESTMENT PORTFOLIO INVESTMENT RISK INVESTMENT RISKS INVESTMENT SERVICES ISLAMIC BANK ISLAMIC BANKING LAWS LEGISLATION LEVEL PLAYING FIELD LIMITED LIQUIDITY MANAGERS MANDATES MARKET DISCIPLINE MARKET INSTITUTIONS MARKET RISK MERGER MUTUAL FUNDS NON-BANK OPEN INTEREST OPERATIONAL RISK OWNERSHIP STRUCTURE PAYMENT SYSTEMS PRIVATE EQUITY PROFIT SHARING PROFITABILITY PROTECTION OF MINORITY SHAREHOLDERS RATING AGENCIES REGULATORY AUTHORITIES REGULATORY FRAMEWORK REGULATORY INSTITUTIONS REGULATORY REGIME REGULATORY SYSTEMS RESERVE BANK OF INDIA RESERVE REQUIREMENT RETAINED EARNINGS RISK MANAGEMENT RISK SHARING SAVINGS SAVINGS ACCOUNTS SECURITIES SECURITIES REGULATION SECURITIES REGULATOR SEPARATION OF OWNERSHIP SEPARATION OF OWNERSHIP FROM CONTROL SHAREHOLDER SHAREHOLDERS SOCIAL SERVICES SPECIFIC INVESTMENTS STAKEHOLDER STAKEHOLDER PROTECTION STAKEHOLDERS STATEMENT STOCK OPTIONS STOCKHOLDERS SYSTEMIC BANKING CRISES TAKEOVER TAXATION TRANSPARENCY VOTING SHARES
spellingShingle	ACCOUNTING ACCOUNTING STANDARDS ACQUISITION ASSETS AUDITING AUDITORS BALANCE SHEET BANK GUARANTEES BANKING LAW BANKING SUPERVISION BANKS BORROWING CAPITAL ADEQUACY CAPITAL MARKETS CAPITAL REQUIREMENTS CENTRAL BANKS CONFLICT OF INTEREST CONTROLLING SHAREHOLDERS CORPORATE CONTROL CORPORATE GOVERNANCE CORPORATE GOVERNANCE CODE CORPORATE STRUCTURE CORPORATE TAKEOVERS DEPOSITS DISCLOSURE DIVIDEND PAYMENTS DIVIDENDS EQUALIZATION EXPROPRIATION FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FINANCIAL ACCOUNTING FINANCIAL INDUSTRY FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL REPORTING FINANCIAL SERVICES FINANCIAL STATEMENTS FINANCIAL SYSTEMS FINANCIAL TRANSACTION FRANCHISE FREE BANKING GOLDEN SHARES HOSTILE TAKEOVERS INDEPENDENT DIRECTORS INSTITUTIONAL INFRASTRUCTURE INTERESTS OF MINORITY SHAREHOLDERS INTERNATIONAL BUSINESSES INVESTMENT DECISIONS INVESTMENT POOLS INVESTMENT PORTFOLIO INVESTMENT RISK INVESTMENT RISKS INVESTMENT SERVICES ISLAMIC BANK ISLAMIC BANKING LAWS LEGISLATION LEVEL PLAYING FIELD LIMITED LIQUIDITY MANAGERS MANDATES MARKET DISCIPLINE MARKET INSTITUTIONS MARKET RISK MERGER MUTUAL FUNDS NON-BANK OPEN INTEREST OPERATIONAL RISK OWNERSHIP STRUCTURE PAYMENT SYSTEMS PRIVATE EQUITY PROFIT SHARING PROFITABILITY PROTECTION OF MINORITY SHAREHOLDERS RATING AGENCIES REGULATORY AUTHORITIES REGULATORY FRAMEWORK REGULATORY INSTITUTIONS REGULATORY REGIME REGULATORY SYSTEMS RESERVE BANK OF INDIA RESERVE REQUIREMENT RETAINED EARNINGS RISK MANAGEMENT RISK SHARING SAVINGS SAVINGS ACCOUNTS SECURITIES SECURITIES REGULATION SECURITIES REGULATOR SEPARATION OF OWNERSHIP SEPARATION OF OWNERSHIP FROM CONTROL SHAREHOLDER SHAREHOLDERS SOCIAL SERVICES SPECIFIC INVESTMENTS STAKEHOLDER STAKEHOLDER PROTECTION STAKEHOLDERS STATEMENT STOCK OPTIONS STOCKHOLDERS SYSTEMIC BANKING CRISES TAKEOVER TAXATION TRANSPARENCY VOTING SHARES Grais, Wafik Pellegrini, Matteo Corporate Governance and Stakeholders’ Financial Interests in Institutions Offering Islamic Financial Services
relation	Policy Research Working Paper; No. 4053
description	This paper focuses on the corporate governance arrangements of institutions offering Islamic financial services (IIFS) aimed at protecting stakeholders' financial interests. Many IIFS corporate governance issues are common with those of their conventional counterparts. Others are distinctive. In particular they offer unrestricted investment accounts that share risks with shareholders but without a voting right. This paper first reviews internal and external arrangements put in place by IIFS to protect stakeholders' financial interests. It discusses shortcomings notably in terms of potential conflict of interest between shareholders and holders of unrestricted investment accounts. It then suggests a corporate governance framework that combines internal and external arrangements to provide safeguards to unrestricted investment account holders without overburdening IIFS' financial performance. The paper uses a review of 13 IIFS and regulatory information from countries where IIFS have developed the most.
format	Publications & Research :: Policy Research Working Paper
author	Grais, Wafik Pellegrini, Matteo
author_facet	Grais, Wafik Pellegrini, Matteo
author_sort	Grais, Wafik
title	Corporate Governance and Stakeholders’ Financial Interests in Institutions Offering Islamic Financial Services
title_short	Corporate Governance and Stakeholders’ Financial Interests in Institutions Offering Islamic Financial Services
title_full	Corporate Governance and Stakeholders’ Financial Interests in Institutions Offering Islamic Financial Services
title_fullStr	Corporate Governance and Stakeholders’ Financial Interests in Institutions Offering Islamic Financial Services
title_full_unstemmed	Corporate Governance and Stakeholders’ Financial Interests in Institutions Offering Islamic Financial Services
title_sort	corporate governance and stakeholders’ financial interests in institutions offering islamic financial services
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/11/7157793/corporate-governance-stakeholders-financial-interests-institutions-offering-islamic-financial-services http://hdl.handle.net/10986/9028
_version_	1764406748570976256

Corporate Governance and Stakeholders’ Financial Interests in Institutions Offering Islamic Financial Services

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