Corporate governance in Islamic perspective

Abstract

Abstract Purpose – The purpose of this paper is to delineate the substantially different theory and application of corporate governance idea in Islamic financial theory contrary to the perceived one in the literature. Thus, a comparative and contrasting examination of the topic is provided. Design/methodology/approach – A theoretical and extensively comparative study of the literature to bring out the objective of presenting the systemic theory of Islamic corporate governance underlying its specific epistemological foundations. Findings – The hetrodox theory of Islamic finance in regards to the theme of corporate governance is shown to be a viable alternative way of understanding this topic in the light of the particular Islamic epistemological premise. Thus, Islamic financial perspective, exemplified here in terms of corporate governance, is expounded. Research limitations/implications – Empirical extension can be made but such epistemological responses are presently not available from the Islamic financial institutions because of their imperfect premise on the epistemology of unity of knowledge and organization on which the theory of Islamic corporate governance rests. Social implications – A vast social implication of corporate govarnance is opened by its epistemological inquiry comprehending integrated decision‐making and systemic complemenatrities expending across society at large. Thereby, a socio‐financial theory of corporate governance in the epistemological context is elaborated upon. Originality/value – This is a pathbreaking paper premised on its epistemological approach of unity of knowledge and learning systems as a distinct contribution in the theory of corporate governance in the field of ethical socio‐financial perspective.