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Islamic social finance assists in achieving social good and economic justice in societies by closing the gap between rich and poor in a Shariah compliant framework. COVID-19 pandemic has created the opportunity to experience the untapped potential of Islamic social finance in many of the countries. This chapter sheds light on the use of Islamic social finance in Iran in the midst of the pandemic with the objective of sharing some Shariah compliant financial solutions for reducing undesirable consequences of the COVID-19. Iran is a country that has a unique Islamic financial system. Currently, it is the country where constitutionally and statutorily practices only shariah-compliant financing activities. This chapter reveals that tradability of justice shares, introduction of Shariah-compliant crowdfunding platforms, provision of Islamic microfinance vehicles in the form of Al-Qard Al-Hassan loans, payment facilities to factories damaged by COVID-19, low-profit rate Murabaha facilities for housing sector are some Shariah-compliant social finance products which were provided in Iran in the midst of the pandemic to provide financial solutions to fulfil the need of the society in a convenient and effective manner.

The concept of corporate governance is not new for institutions and organizations. The topic came into light after the financial crisis and frauds done by the companies. The topic of Islamic finance also gained momentum. Islamic Financial Services Board, Accounting and Auditing Organization of Islamic Financial Institutions, regulatory authorities of Islamic financial institutions and Islamic financial institutions themselves paid attention to the topic of corporate governance. Governance have critical place in Islam as human beings are answerable to Allah (swt) for acts, deeds, and fulfillment of responsibilities as vicegerent. This chapter focuses on the importance of corporate governance and differences between the corporate governance from conventional and Islamic point of view. How the topic of governance was discussed during the time of Holy Prophet (PBUH), different examples of the countries focusing on corporate governance are shared in this chapter.

This chapter examines corporate social responsibility (CSR) practices by Islamic banks (IBs) in Bangladesh and to identify how these initiatives impact on citizens in a positive and a productive manner without compromising the ethics and values. CSR data and the information of seven IBs in Bangladesh were considered to analyse sector-wise CSR expenditures, as well as in the specialised areas focussing on religious values, from 2007–2010. Results indicate that most of the IBs are committed to CSR practice. This may motivate conventional banks to spend more on CSR to compete with their counterparts. Consequently, the total inflow of resources from the banks towards social wellbeing may also increase. The study finds that IBs share some common areas in conducting CSR activities similar to their conventional counterparts. IBs are also engaged in some additional areas due to their mandatory compliance with the shari’ah. The study finds a significantly increasing trend of CSR expenditures and engagements by IBs.

The number of Shari’ah Compliant companies is tremendously increasing year by year in Malaysia. In an attempt to win the trust and confidence of its Muslim investors and stakeholders, the Shari’ah Compliant companies must portray their sincerity and earnestness in complying with Islamic values which may have implications on winning the trust of Muslim investors largely from oil-rich Arab Gulf Region which have flush of funds currently. Thus, the purpose of the study is to gauge the extent of the corporate ethical identity (CEI) that is being incorporated by the Shari’ah Compliant companies in Malaysia.

This study used the content analysis to develop CEI by adding all the items covering the four themes, which were underlying philosophy and values, interest-free and Islamically acceptable activities, developmental and social goals and environment theme. This CEI index was developed by using the dichotomous, which the score of ‘1’, if the company disclose the items and ‘0’, if it is not. The process will add all the scores and equally weighted.

The study showed that the level of communicated ethical identity disclosed in annual reports of Shari’ah Compliant companies for the year ended 2008 is relatively low with average of 23.66%. Overall, the findings of the study showed that the Shari’ah Compliant companies revealed more communicated ethical identity on Theme 1 (underlying philosophy and values) in the annual reports for the year ended 2008. In addition, in the year 2008, the findings showed that the dimension of developmental and social goals has the most influence towards the ethical identity index of Shari’ah Compliant companies.

The source of data in this study is limited to companies’ annual report. In other words, the extent of communicated ethical identity index is constructed limited to company’s annual report. The study has shown that annual reports is not the only means or medium of disclosure. Hence, studying other forms of disclosure on communicated ethical identity could possibly complement and add value to any investigation on the nature and extent of communicated ethical identity through annual reports in the future.

The study is expected to alert the Securities Commission with regard to the definition of Shari’ah Compliant companies which should not just include ‘good public perception and image company’ but also the extent of the application of Islamic values in the conduct of their businesses.

The study provides a new benchmark of an ideal Islamic communicated CEI index based on Shari’ah principles and also past literatures. The study developed a checklist from preliminary checklist with 88 items based on Berrone, Surroca, and Tribo (2005), Haniffa and Hudaib (2007) and Roshima, Yuserrie and Hasnah (2009). In order to develop the checklist, the researchers also look on the definition of Islamic ethics defined by Khan (2009).

Although the phenomenon of the corporate social responsibility disclosure (CSRD) has derived the interest of several scholars, in recent years, the comparative studies between Islamic banks (IBs) regarding CSRD quantity versus quality have not been the subject matter of studies till now. In this perspective, this chapter aims to investigate the importance given by IBs to the quality and quantity disclosure of CSR. Moreover, it seeks to explore the impact of CSRD quality and quantity on the IBs' financial performance (FP). To meet these objectives, we used a sample of 59 IBs from 2011 to 2016 in the Arab world and non-Arab world. Then, by adopting the content analysis approach, the authors constructed two CSRD indexes (quality and quantity). The empirical results indicated that IBs give more importance to the qualitative disclosure than the quantitative. Our findings will be very helpful for the policymakers and the managers of IBs because maintaining a good CSRD policy increases the capacity of IBs to deal with possible reputational events, thus protecting their profits and financial results. As far as the comparison between the Arabian and non-Arabian IBs, based on financial reports and Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) governance standard N°7 is concerned, our study is among the first studies that provides two new CSRD indexes (quantity and quality).

COVID-19 pandemic has impacted global human lives, killing millions and attacking the real economy to its core. United Nations has called for global solidarity to overcome this unprecedented disaster. Having said that, zakat has been utilized to respond to this ongoing suffering in Muslim countries. This chapter explore zakat utilization for COVID-19 under the shariah perspective and discuss the role of zakat to respond to the pandemic in Muslim countries. A qualitative methodology including conceptual and content analysis is applied to conduct this study. The findings show that most sharia scholars agreed to utilize zakat for the COVID-19 pandemic and endorse advance zakat payment. Moreover, zakat has been disbursed mainly to fulfil basic needs, support emergency health services, sustain education activities, recover economic impact and maintain dakwah programme. The global zakat institutions have also started up the international initiative to respond to this pandemic. This study contributes to the academia on showing how zakat is a conceivable and reliable instrument to give immediate response to this pandemic in Muslim countries. The best practices found in this study are worthy for zakat institutions to continue their programme under this pandemic and be resilient for the next global scale of disasters.

‘Stans’ is an ancient Persian word meaning land, country or nation. This chapter begins with a review of the historical basis of zakat management in Islamic practice and provides a brief historical account and status of zakat practices in select countries in Central Asia. The section thereafter focuses on benchmark international zakat management models before providing recommendations for the development of an effective zakat management model within Central Asia. The economic shocks resulting from the pandemic have forced many in the region into situational poverty. If left unchecked, this may easily regress into chronic poverty, undoing the significant growth that these countries have experienced over the last decade. Existing social programmes have limited the impact of economic loss. Since the collapse of the Soviet Union, they have an opportunity to revive this history and once again empower their nations with Islamic social finance instruments. Effective zakat management models in Indonesia and Kuwait, for example, provide different dimensions to social impact. The Indonesian model of BAZNAS provides the most comprehensive methodology for governance, risk management and replication. BAZNAS′ strategy for digitalization and collaboration suggests a strong model for development within Central Asia. Through an effective zakat model, it is expected that Central Asian nations will be better protected against economic disruptions and provide a safety net for vulnerable communities in the region. These conclusions and recommendations in this chapter are limited to the information available in the literature. Further study is required through primary research to understand better what the challenges are in zakat modelling. Locals may also be surveyed to determine their levels of zakat knowledge and their concerns for institutional zakat collection and disbursement.

Money laundering and terrorism financing are financial crimes which affect the economic stability and integrity of the country. In this respect, the relevant regulator has a duty to preserve and protect the financial stability of the country. This duty is in line with the concept of the protection of wealth (hifz al-mal) under the maqāsid al-Sharīʿah or higher objectives of Islamic law framework. The objective of this chapter is to examine the protection of wealth vis-á-vis money laundering and terrorism financing from the maqāsid al-Sharīʿah perspective. This study analyses the primary and secondary legal sources on the laws and regulations on anti-money laundering and counter financing of terrorism while also considering the primary and secondary sources of Islamic law. This study is significant as it makes an exploration of the maqāsid al-Sharīʿah perspectives and discusses the position of unlawful wealth that is acquired from the illicit gain of property from the abuse of money laundering and the financing of terrorist activities. This chapter suggests that Islamic law emphasises on the lawful ownership of wealth and prohibits a person from acquiring illicit wealth. This study will contribute towards the study on the deployment of maqāsid al-Sharīʿah, which is beneficial in safeguarding an individual action as well as the country’s commitment against abuse and misuse of wealth for financial crimes.

This chapter assesses the effects of corporate governance (CG) variables on the level of Corporate Social Responsibility Disclosure (CSRD), Shari'ah Supervisory Board Disclosure (SSBD), and Financial Disclosure (FD) for Islamic banks. This study, based on a sample of 95 Islamic banks, assessed this in 2013. The findings suggest that CG mechanisms, firm's age, auditor and shari'ah auditing department are effective in influencing SSBD, CSRD, and FD practices in Islamic banks. This chapter encourages regulators to improve CG mechanisms in their Islamic banking systems through the optimization of ownership structure (dispersed ownership) and the board's characteristics in order to promote transparency and disclosure. Moreover, the findings support theoretical arguments that firms disclose CG information in order to mitigate information asymmetry and agency costs and to improve investor confidence in the reported financial statements. The empirical evidence of this study enhances the understanding of the CG disclosure environment in Islamic banks as a promoting new financial system.

This conceptual chapter develops a discussion expounding the Islamic perspective of corporate governance as a special case of a broader decision-making theory that uses the premise of Islamic socio-scientific epistemology. This chapter contributes fresh knowledge in corporate governance theory in the light of two central issues. First, the central issue is of organic preference formation studied systemically by process model. The second issue is of transaction cost minimization while pursuing such a discursive and participatory model of decision-making in an environment governed by a systemic meaning of unity of knowledge as its episteme. Relevant institutional policies are shown to be capable of formulation in the light of such systemic discursion under the episteme of unity of knowledge understood and applied in the systemic organic sense.