Corporate Governance: Conventional Vs. Islamic Perspective

Abstract

This conceptual paper tries to discuss about the corporate governance in difference perspective; conventional versus Islamic perspective. In conventional perspective, there are six fundamental principles of the corporate governance offered by OECD (2004). These six basic principles are believed to be included in Islamic corporate governance. Instead, the Islamic corporate governance is wider concept compared to the conventional corporate governance. The Syariah compliance, justice and social welfare, prohibited of the interest, Halal and Haram dichotomy, and others are among the basic principle in Islamic corporate governance. Islamic culture also embedded good corporate governance since the early days of Islamization. In addition, the strong belief of accountability had strong implication in every Muslim life and governs a wider scope and extended obligations of corporate governance with that compared to conventional principles. Hence, the success and welfare is measured with moral and ethical spiritual obligations with a strong trust in accountability with Allah, the ultimate authority. And finally, tendency of globalization, and other factors lead to misplace the true ethos of Islamic civilization.