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An Islamic social finance ecosystem has its specific instruments in terms of funding and investment that are in line with Shariah (Islamic law) principles. These include waqf (Islamic endowment), zakat (compulsory alms), ṣadaqah (donation), qarḍ ḥasan (benevolent loan) and others. In this context, the Islamic financial institutions can be considered as Islamic social finance institutions since it has the elements of Islamic social finance concepts. The uniqueness of these two types of institutions is that they operate with the absence of riba, maysir, gharar and thus the requirement of Shariah governance comes into existence. The practice of Shariah governance in Islamic financial institutions needs to be extensively examined by using a comprehensive measurement. Therefore, this chapter attempts to discuss on the needs of Shariah Governance Practices Index (SGPi) as a comprehensive measurement to measure the Shariah governance practices. In conclusion, it is proposed to have a comprehensive index to measure the Shariah governance practices which consider few components of Shariah governance such as the board of directors, the management, Shariah Committee and Shariah compliance functions.

Using the notion of sustainable impactful strategies for waqf management, this study examines the governance and best practices on idle waqf management by the Malaysian States Islamic Religious Councils (SIRCs) in selected states like Penang, Perak and Kuala Lumpur. The waqf management of the SIRCs is also assessed based on the model framework countries such as Singapore, Kuwait and United Arab Emirates (UAE). The findings of this chapter indicate that ineffective administration and management on waqf have hindered its development and expansion in Malaysia. Also, an effective and robust governance framework based on Shariah could and should be implemented to ensure that waqf in Malaysia are managed effectively to gain socio-economic sustainability of Muslim communities. The findings of this chapter will fill the research gap on good governance and best practices in waqf administration and management as a way forward for Malaysia by providing a way forward for SIRCs and policymakers in Malaysia, to enhance the performance of waqf entity using selected other countries as model framework of good governance and best practices. Furthermore, an emphasis on good governance and best practices is important to attract waqf donors. It is imperative to note that to date, there is no qualitative study that compare the impact of good governance and best practices on the management of waqf by selected SIRCs in Penang, Perak and Kuala Lumpur to Singapore, Kuwait and UAE as model framework countries.

Shari'ah governance is a major part of governance of Islamic banking institutions (IBIs). Pakistan is the country where pioneering work on Islamic banking and finance has been conducted since 1970s. Major changes were made in 2002 and then in 2015 in the Islamic banking governance framework. This chapter critically analyses as to what extent the ‘shari'ah governance framework’ (SGF) introduced by the State Bank of Pakistan (SBP) in 2015 could be able to ensure compliance of Islamic banks' practices with the principles of shari'ah. The SBP, the regulator of banking system, has been doing its intensive efforts to ensure shari'ah compliance, and as such the SGF introduced by it is a good ‘case study’ on the subject. By applying the descriptive and analytical methodology, it examines the strengths and weaknesses and suggests how the gaps could be filled to make the SGF really effective for achieving the objective.

Islamic finance and Halal product sectors are thriving successfully. This chapter is a general review of the perception of Asian consumers on Islamic finance and Halal sectors in the global Halal economy.

The first section will briefly describe the Halal concept in both Islamic finance and Halal industries, and the growth of both sectors in Asian countries. The second part highlights the review of Asian consumers’ perception towards Islamic finance products and Halal products.

The review found that the consumers’ perception towards the Islamic finance products and Halal products is distinctive. This is due to the diversity of Asian countries in terms of geography, religion, culture, ethnic, school of thoughts (madzahib), income per capita and government’s involvement.

The third part of the chapter concentrates on planning towards Halal marketing, which involves the move and future challenges in different layers of industries to gear up and strengthen the Halal economy.

This chapter summarizes the current practice of shari'ah governance framework of Islamic banking entities (IBEs) in Oman and the challenges faced by such institutions. The Central Bank of Oman (CBO) issued proper shari'ah governance framework enshrined in the Islamic Banking Regulatory Framework of CBO. The shari'ah governance framework shall contain shari'ah supervisory board, internal shari'ah reviewer, shari'ah compliance unit, shari'ah risk unit, and shari'ah audit unit. To strengthen the role of shari'ah, the CBO also issued a regulation for the establishment of High Shari'ah Supervisory Authority in CBO to harmonize opinions related to shari'ah matters among the IBEs. These elements are expected to perform an oversight role on shari'ah matters relating to Islamic banking business activities. This chapter also discusses the issues and challenges faced by IBEs in Oman, and proposed some improvement to the CBO to strengthen shari'ah governance framework in the Sultanate.

To meet the philosophical underpinnings of Islamic financial institutions (IFIs), a sound shari'ah governance framework (SGF) for each and every IFI is vital. Establishment of a proper SGF is central for smooth and effective functioning of an IFI. In the periphery of shari'ah governance (SG), the role of Shari'ah Supervisory Boards (SSB) is considerably crucial. SSB constitutes one of the most important SG elements in a given IFI. One of the central objectives of SGF is to protect and boost the authenticity of IFIs among its stakeholders, which is instrumental for the resilience and growth of the industry. To achieve this, it is required that an end-to-end shari'ah assurance process is functionalised at IFIs. To this end, external shari'ah audit, which is a process of objectively evaluating the entire operations of an IFI from shari'ah perspective and ascertaining that all events are based on shari'ah principles, is of paramount significance.

Shari'ah governance is a vital aspect that ensures internal shari'ah compliance function in Islamic financial industry, including the takaful industry. Shari'ah audit is a component of shari'ah governance in any Islamic institution as it independently attests the state of shari'ah compliance. Besides, it contributes towards shari'ah non-compliance risk management and enhances the quality of internal shari'ah audit function. The main aim for this chapter is to discuss the scopes and processes of shari'ah audit function in takaful operation. In addition, a discussion on applicable key controls in takaful operation is also provided. This chapter provides an insight into shari'ah audit implementation in a takaful operator, based on the information solicited from an interview session with its shari'ah auditor. This chapter provides fundamental aspects of shari'ah audit exercise in takaful operation and raises takaful operator's views on the challenges and adequacy of guidelines on shari'ah audit for its effective implementation.

The unique characteristic of Islamic bank leads in governance and disclosure. Using stakeholder, signaling, and market discipline theory, governance and adequate disclosure may increase bank soundness. This study aims to investigate the relationship of sharia disclosure and Sharia Supervisory Board in influencing Islamic bank soundness in the different regulatory framework of the country. Using purposive sampling, the research covered 84 Islamic banks in 16 countries during the period 2013–2015 with lag data of Islamic bank soundness. The result shows sharia disclosure influences on Islamic bank soundness for management efficiency, capital adequacy ratio, asset quality, and liquidity. The results also show that sharia disclosure mediates the indirect effect of SSB on Islamic bank soundness. The regulatory framework (sharia accounting standard and SSB regulation) shows moderating effect of regulation framework proved on the association of sharia disclosure with management efficiency, capital, and liquidity. The effect is indirectly depending on the regulatory framework for proxy management efficiency, capital, and liquidity. The implication of the research suggests that sharia disclosure could increase the market discipline mechanism of Islamic bank stream. The Islamic bank can increase the transparency using sharia disclosure as a branding for increasing public trust, even though in the deficient Islamic bank regulation countries.