This was the crux of the focal points raised by ex-Harvard Professor Nabil El-Hage in a corporate governance (CG) workshop organized by the Waqf Fund for Research, Education and Training in Islamic Finance for CEOs and board members of Islamic banks. Over 20 senior professionals attended the highly interactive workshop.
Professor Nabil discussed several real life cases during the day to highlight the issues, followed by a lively discussion by the participants.
He pointed out that business owners can no longer afford to ignore the ethical dimension of their decisions, in addition to the economic and legal aspects. This is true for all businesses but even more so in case of Islamic banks that have to fulfill the additional requirements of Shari’a compliance. It inevitably means more ambiguity, and board members should be prepared to give their judgment on such matters. He concluded that exercising sound judgment while fulfilling the duties of loyalty, care and candor was the best protection for board members and senior management.
Khalid Hamad, Chairman of the Waqf Fund emphasized on the importance of good corporate governance for sustainable business in good times and bad. He said that the decision makers of Islamic financial institutions need to understand clearly their responsibility as board members, especially in line with the code of corporate governance introduced recently in Bahrain. The workshop highlighted some of the global CG issues which are also relevant for Bahrain and the region.
Nabil El-Hage is the Chairman of Academy of Executive Education and has been a Harvard Business School professor for seven years where he taught corporate governance, corporate finance and private equity. He has extensive industry experience at senior management positions and has served on a dozen boards of private and public companies.
The Waqf Fund has been serving the Islamic finance industry in Bahrain since 2006. It offers several programs targeted at Islamic finance practitioners, Internal Shari’a Reviewers and Bahraini graduates. It also organizes roundtable discussions on topics of importance to the industry. The Waqf Fund has 20 member institutions including the Central Bank of Bahrain.