Conceptual Analysis of Shariah Advisory board in the Corporate Governance of Islamic Financial Institutions in Minority Muslim Country: The case of Uganda

Abstract

The Islamic finance industry has grown rapidly not only in Muslim countries such as Kuwait, Malaysia, and Saudi Arabia, but also in non-Muslim countries such as the United Kingdom, France, and Ghana. Shariah Advisory Board plays an important role in corporate governance of Islamic Financial Institutions. The primary goal of this paper is to address proper understanding of Shariah and Shariah Advisory Board in order to place them in their proper corporate governance in minority Muslim countries like Uganda as a new market for Islamic financial institutions. Furthermore, the research focus on the role of Shariah Advisory Boards and the qualifications for Shariah scholars on the board. It also demonstrates the importance of Shariah Advisory Board’s independence in implementing its decisions using the previous studies. The research is an exploratory study, the data was gathered from secondary sources such as statutes, articles, online materials and annual reports of Islamic financial institutions that were accessible in different countries. The study's findings are expected to be extremely beneficial to Islamic financial institutions in Uganda and other countries where there is no proper literature on Shariah advisory board concept and corporate governance.