IFC-IFSB Seminar Participants Discuss Governance Issues for Institutions Offering Islamic Financial Services

The IFC Global Corporate Governance Forum, the Islamic Financial Services Board, and the World Bank Group Corporate Governance Department recently organized a seminar in Manama, Bahrain, to increase awareness of corporate governance issues in Islamic finance. The Central Bank of Bahrain hosted the seminar on March 11 and 12, 2008.

Participants included more than 60 senior bankers from Bahrain, other Gulf Cooperation Council countries, Indonesia, Malaysia, and Sudan. Topics focused on banking, insurance, and capital markets—particularly collective investment schemes.

Peter Dey, Chairman of the Forum’s Private Sector Advisory Group, emphasized the connection between good corporate governance and proper functioning of the economy. He also addressed the main challenges in corporate governance and suggestions on how to overcome them. Participants’ discussions focused on corporate governance standards that have been developed by IFSB, with insights provided by regulatory officials, corporate governance specialists at international multilateral agencies, and industry practitioners.

Professor Rifaat Ahmed Abdel Karim, Secretary General of IFSB, said, “We recognize the challenges of good governance, and have thus prepared several principle-based corporate governance guidelines, covering institutions that offer Islamic financial services as well as Islamic collective investment schemes. We are also developing corporate governance guidelines for takâful operations and Sharî`ah governance. We trust these guidelines will inculcate strong governance in Islamic financial services and contribute to confidence and financial stability in the industry.”

“The IFSB has drafted a series of principles on Islamic finance. This event was designed to raise awareness of these issues and to advance discussions on appropriate modalities for ensuring good governance,” said Eugene Spiro, Senior Projects Officer of the IFC Global Corporate Governance Forum.

This was the first joint seminar that IFSB, the World Bank Group, and the IFC Global Corporate Governance Forum have tailored to corporate governance practice and related regional issues. The seminar attracted regional and international experts’ attention to key issues that will be addressed going forward.