Islamic Finance gif


lamic finance is to fulfil the financial needs of consumers while abiding by the Shariah principles. There needs to be a mutual rec- ognition of Islamic finance in order to drive global growth of Islamic finance.


Humanising Islamic financial services con- sists of ensuring that the customers have complete trust in the Islamic financial in- stitutions that they bank with, and that the banks meet the needs of the customers. It also includes providing all communities with access to Islamic finance, enhancing their lives by giving back to them financially, and using green technology to promote and de- velop Islamic finance.


Figure 4 compares an overview of the Sha- riah-compliant assets around the world from 2003 and 2010. Islamic finance broadens the financial industry, providing much-need- ed resources within Muslim and non-Muslim dominated countries.


Dr. Mohammad N. Siddiqi presented his views at the conference ‘Leadership in Glo- bal Finance: The Emerging Islamic Horizon’


Western Leadership


in Kuala Lumpur. Dr Siddiqi said that, ‘the time has come when innovation should trump imitation. From purification of current financial transactions from haram [the pro- hibited], to designing new financial ways and means that can serve the maqasid al- Sha- riah [objectives of Islam] - that is the new di- rection that the Islamic financial community should aspire to take.’


At the KLIFF Islamic Finance Awards dinner, held in Kuala Lumpur, Nor Mohamed Yakcop gave his views on innovation within Islamic finance. He said, ’for innovation to become an important driver of growth, a critical area that needs attention is addressing the short- age of skilled and experienced professionals in the industry.


We need to build a pipeline of talented minds who have the ability and creativity to develop new ideas and the capacity to turn ideas into achievable results.’


Standardisation is one of the major chal- lenges within the Islamic finance industry, and urgently needs a solution.


Figure 5: Comparison of Western and Islamic leadership Points


Goals Participants Nature Methodology Traits Decision making


Limitations of leader


Limitation of followers


Leadership style Followers style


Solution of a problem by group, with no reference to Divine efforts.


Formal and informal leaders, ordinary members rarely involved.


Leadership is rule-bound and situ- ational and no ‘trust’ is involved.


Meetings; conferences; study reports; file orders, etc.


Mundane knowledge; skills; values as prescribed by organisations.


With reference to rules of business and no reference to any Divine Law.


Leaders seek leadership, rather than waiting for leadership to come to them.


Islamic Leadership


Seeking Allah’s pleasure in solving a problem by group.


Allah (Swt), Rasul (Sm), the Leader and the followers.


Leadership relates to ‘trust,’ which is to be rendered back to the par- ticipants.


Consultation with followers, espe- cially with those with relevant knowl- edge; memoranda; notifications.


Knowledge of Islamic Shariah; individual judgement; justice and competence.


After consulting, the leader must decide, but put trust on Allah (Swt).


Leaders must not seek leadership; it must come to them.


Followers usually have a passive role. Followers have an active role in advising and warning the leadership of the consequences of their policy/ action.


Authoritative; laissez-faire; demo- cratic when necessary.


Responding to the leader’s call for advice, and co-operation with the leader, but no acceptance of partial responsibility. Both the leaders and the followers are primarily account- able to the organisation.


Source: Managerial Leadership: An Islamic Perspective


A combination of authoritarian and democratic styles.


Responding to the leader’s call for advice and co-operation with the leader, and acceptance of partial responsibility for action. Both the leaders and the followers are prima- rily accountable to Allah (Swt) and organisation.


The interest in Islamic finance regulation has risen, as the laws and regulations seem to differ around the world. Shariah law is open to interpretation, but it is problematic that Islamic scholars are not able to agree completely on the laws and regulations that should support the Islamic financial industry. Without the standardisation of the laws and regulations, there could be a rise in Shariah- compliance risk.


Another problem that may arise is the valid- ity of contracts made under Islamic law, due to legal uncertainty. Luckily, there have been a number of initiatives trialled with the aim of tackling this problem and improving regu- latory practices. If this problem is solved it could improve marketability and acceptance on the Islamic products and services.


Leading the way for the future of Islamic finance Leadership is something that all of the influ- ential people featured in our list display eve- ry day. They lead teams, and harness expert minds, in order to embrace Islamic finance throughout the world.


The people featured all possess a range of leadership qualities, including the ability to recognise and reward achievers, maintain- ing a respectable image, flexibility, knowl- edge, honesty and acting decisively.


The influential people within Islamic finance all have a level of authority over others; au- thority is a legitimate power, giving people the right to make big decisions, take action and distribute the resources needed. These people inspire others to make an impact and to achieve things that have never been done before, living up to global innovation.


Leadership is not found only in CEO and di- rector roles; it is required at all levels of au- thority within an organisation. A successful organisation can tell the difference between leadership and management. Management focuses on the workforce’s skills and com- petition, while leadership focuses on inspira- tion and meaning.


Organisations that acknowledge this differ- ence can use these distinctions to develop hard-working staff. Leadership is not just about meaning - it is also about the short- and long-term results of the organisation. The role of the leader is to support his or her team, giving them the motivation and resources to accomplish the vision of the or- ganisation and constantly meet the mission targets.


The leader in any organisation is central to the process of innovation. It is the ideas and activities of the leader, or other influential person, which inspire the policies and devel


2012 April Global Islamic Finance 17


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