The Role of Shariah Governance in The Banking Conversion Process

This paper explores governance from both conventional and Islamic perspectives, emphasizing its growing complexity as it extends beyond shareholders to a wider range of stakeholders. It highlights the evolution of governance as a critical framework for accountability, transparency, and institutional oversight, especially after major global financial developments.

From an Islamic perspective, governance is rooted in Qur’anic and ethical principles, integrating legal structure with moral responsibility. Key principles include trust (amanah), justice, transparency, accountability, prohibition of fraud and corruption, and the obligation of excellence (ihsan). Unlike Western models that often separate law and ethics, Islamic governance unifies both dimensions.

The concept of Fiqh al-Mizan (jurisprudence of balance) is introduced to show that governance must combine procedural systems with ethical integrity. It is further linked to the Maqasid al-Shariah, ensuring that financial and economic activities serve broader human welfare and development goals.