العدد الحالي: ايلول/ سبتمبر 2018       اختر عدد :
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كلمة المجلس العام

Abdelilah BELATIK

Secretary General of CIBAFI

Welcome to the 40th issue of the Global Islamic Economics Magazine (GIEM).  As usual, the GIEM serves as the platform for CIBAFI to keep the members and other stakeholders updated of CIBAFI’s activities and initiatives. We will also update you with the emerging issues and challenges, as well as the current development of the global Islamic finance industry.

 

In this issue, it is a pleasure to update you about the recent CIBAFI-World Bank International Conference. The one and half day Conference, themed “Corporate Governance for Islamic Financial Institutions: Lessons from Recent Global Developments”, was held in Amman, Jordan, on 15 and16 September 2015. The Conference, which was organised under the patronage of the Central Bank of Jordan, aimed to bring together various stakeholders from the private sector, multilateral development institutions, international and national regulatory bodies, policy-makers, and academia to discuss the issue of corporate governance in the Islamic financial services industry (IFSI). The conference was facilitated by a distinguished line-up of industry prominent experts and practitioners, including Governor of the Central Bank of Jordan, Deputy Governors and representatives of Central Banks of Jordan, Turkey, Sudan, and Pakistan; Islamic Development Bank (IDB), International Monetary Fund (IMF), World Bank; Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI); Dubai International Financial Centre (DIFC); International Shariah Research Academy for Islamic Finance (ISRA); and many senior executives of Islamic financial institutions from various countries.  

 

The opening panel gave an overview of corporate governance landscape for financial institutions and recent updates. This has brought a clear picture on the emerging trend and developments in corporate governance, including its key impacts on Islamic financial institutions (IFIs). The Conference has covered the four key areas which are of importance to the governance framework of IFIs. The first was ‘Enhancing Board Effectiveness and Accountability in Islamic Financial Institutions’, with a special discussion on the board structure and composition, implications of ownership concentration, key issues in engagement and code of conduct framework, as well as accountability mechanism that fit to the distinctive characteristics of profit sharing investment account (PSIA). The second session discussed how to strengthen risk governance framework of IFIs as a means to achieve competitive advantage. The focus includes an effective mechanism to internalise risk culture and key yardsticks, implementation of risk appetite framework, enhancement in collective board’s oversight, particularly on how to reinforce the key roles of CROs.

 

In the third session, practitioners shared their views on the recent issues in risk management, transparency, and reporting requirements. The discussion not only covered the implementation issues in International Financial Reporting Standards (IFRS), but also included some of the leading practices in risk-based reporting, reporting of investment accounts, as well as transparency issues related to Basel requirements. The last session focused on one of the most important issues in IFIs, which is Shariah governance, as an effective mean to mitigate Shariah non-compliance risk and reputation risk. The discussion addressed these issues from various angles, starting from the role and appropriate structures of Shariah Supervisory Boards (SSB), its accountability and independency, and establishing a strong alignment between SSB and the Board of Directors.

 

This initiative is part of the CIBAFI Strategic Plan and falls under the Strategic Objective 3:  ‘Awareness and Information Sharing’. It is aligned with the organisation’s larger strategic goals to promote and facilitate the growth of Islamic Finance, while it also comes in response to feedback received from CIBAFI members and stakeholders of Islamic Financial Services Industy during formal Members Satisfaction and Expectation Survey (SES) that was conducted in May-June 2014. CIBAFI endeavors to satisfy the needs and expectations of its members, and with 82 % from 67 respondents representing 27 countries having high interest and expectation from CIBAFI in holding international events such as international conferences and roundtable meetings, we do hope we have reached to meet their expectations.

 

CIBAFI focus and efforts are determined towards achieving its four key Strategic Objectives in order to strengthen its role as the global umbrella of Islamic financial institutions. Other initiatives are being planned in all four Strategic Objectives. Stay tuned.