SHARI’AH GOVERNANCE PRACTICES IN CREDIT COOPERATIVES IN MALAYSIA

Authors

  • Rusni Hassan
  • Rose Ruziana Samad
  • Zurina Shafii

DOI:

https://doi.org/10.31436/shajarah.v0i0.717

Keywords:

Cooperatives, Shari’ah governance, Malaysia

Abstract

Cooperative sector governance is instrumental in ensuring the
effectiveness, responsibility, and accountability in both conventional
and Shari’ah-compliant cooperatives. This study examines Shari’ah
governance (SG) arrangements within the cooperatives in Malaysia.
The objectives of this paper are to explore the application of SG in
the cooperative sector in Malaysia and to evaluate the adequacy of
SG adoption in cooperative. This study uses qualitative methods
where the data are collected using focus group discussions and
in-depth interviews with regulators, experts, and the governance
organs of the cooperatives. The study focuses on credit cooperatives
that have been listed in the 100 Best Cooperative Directory issued by
Suruhanjaya Koperasi Malaysia (SKM) annually from 2012 to 2016.
The findings from thematic analysis on interviews conducted indicate
that the first objective, most respondents agreed that cooperatives
should be operated based on the objectives of its establishment. The
findings on the adequacy of adoption of SG in Shari’ah-compliant
cooperatives indicate that the practice is at an infancy stage, with
plenty of support and motivation are needed to ensure effective and
efficient implementation of SG. Emergent findings from the interviews
reveal that the Islamic attributes are crucial for a cooperative’s SG
organs such as Islamic accountability, Shari’ah mindset, Islamic
culture, awareness and readiness, manpower competencies and
cooperation (ta'awun). It is vital for the SG organs to have such
attributes in order to foster awareness among them to be more
responsible and willing to adopt good SG practices. The observation
of good SG practices in the cooperative sector in Malaysia can help
the cooperative movement to positively grow and contribute
equitably to community.

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Published

2018-12-01

How to Cite

Hassan, Rusni, Rose Ruziana Samad, and Zurina Shafii. 2018. “SHARI’AH GOVERNANCE PRACTICES IN CREDIT COOPERATIVES IN MALAYSIA”. Al-Shajarah: Journal of the International Institute of Islamic Thought and Civilization (ISTAC), December, 89-109. https://doi.org/10.31436/shajarah.v0i0.717.