THE BOARD
Key responsibilities
Interaction with Shariah committee
Approve Policies
Promote:
Oversee
The implementation of the internal control framework to prevent Shariah non-compliance and any rectification measures to resolve incidences or circumstances that may result or have resulted in Shariah non-compliance
The performance of senior management and other officers entrusted to implement Shariah governance framework such the board is satisfied that the measures of their performance are aligned with Shariah governance objectives
The implementation of SAC rulings and decisions or advice of the Shariah committee within all business and functional lines, including any business or risk implications arising from such implementation
Shariah non-compliance risk management
other areas that are material to the effective implementation of Shariah governance within the IFI
Governance structure and reporting arrangements
sound corporate culture which reflects the importance of adhering to Shariah requirements in product development and marketing
strategy formulation
business operation
risk management practices
other aspects that promote end-to-end compliance with Shariah
Establish effective communication with the SC (Shariah requirements, Shariah governance or Shariah non-compliance risks) and regularly review the quality and frequency of its engagement with the SC.
Allocate sufficient resources for continuous development of skills and expertise of the SC.
Establish a written policy to identify, assess and manage any conflicts of interest arising from any additional activities or services performed by the SC member for the IFI, or his other external professional commitments.
Establish a formal process to assess, at minimum annually, performance and effectiveness of the Shariah committee and every Shariah committee member.
Ensure that the SC is free from any undue influences that may hamper the SC from exercising its professional objectivity and independence in deliberating issues.
Approve a remuneration policy that is commensurate with the accountabilities, duties and responsibilities of the Shariah committee.
must have due regard to any decisions or advice of the SC on any Shariah issues relating to the operations of the IFI.
If the board delegates its responsibilities to the SC, the board must
●Give fair consideration to the implications of any decisions or advice SC
●Deal with any differences in views between the board and the SC
●Focus to the facts, rationale and basis for any decisions or advice from the SC.
●Maintain a record of deliberations where the differences in views exist with resolution.
●Establish reporting arrangements to be kept informed of the SC’s work, key deliberations and decisions on delegated matters.
●Fully responsible for decisions and any implications arising from the delegated responsibility.
●Ensure that the mandate, areas of delegated authority and operating procedures are clear in the board and the SC’s charter.