IFSB Consults on Guiding Principles for Corporate Governance
The Islamic Financial Services Board (IFSB) is seeking comments, until May 20, 2023, on an exposure draft of the revised guiding principles on corporate governance for institutions offering Islamic financial services under the banking segment. The revised guiding principles are relevant for central banks, regulatory and supervisory authorities, international organizations, institutions offering Islamic financial services, academics, and other interested parties.
The Revised Guiding Principles on Corporate Governance are designed to strengthen integrity and resilience of institutions offering Islamic financial services by enhancing the effectiveness of their corporate governance frameworks, reinforce international best-practices and positively contribute to financial stability and sustainable economic growth. The Revised Guiding Principles build on the Guiding Principles on Corporate Governance (IFSB-3), which were published in 2006, by incorporating additional areas of governance to provide a complete set of guidance that is aligned with the BCBS Corporate Governance Principles for banks. The key objectives of the Guiding Principles are to:
- Provide guidance on areas where minimum governance structures and processes are required for a sound corporate governance framework, including effective Sharī`ah governance mechanisms.
- Protect the interests of stakeholders in conformity with public interest—among stakeholders, primary concern should be given to depositors, unrestricted investment account holders (IAH), restricted IAH and shareholders, respectively.
- Strengthen transparency of institutions offering Islamic financial services and accountability to enhance stakeholders’ trust and confidence.
- Promote financial sustainability by implementing a holistic approach to include financial and non-financial criteria.
Related Link: Press Release
Keywords: International, Banking, Islamic Banking, Corporate Governance, ESG, Guiding Principles, Financial Stability, IFSB
Featured Experts
Hasan Cerhozi
Hasan leads Moody’s Analytics ESG methodology development. He is expert on carbon transition, nature related risks and is a guest lecturer at ESSEC Business school on sustainable finance.
James Partridge
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
Previous Article
US Agencies Issue Updates on Resolution of SVB and Signature BankRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
