Governance refers to the exercise\nof economic, political, social or administrative powers to manage public\naffairs. All levels are involved, including corporations, federal and state\ngovernments, local governance and other entities. It comprises the mechanisms,\nprocesses, proper procedures and management tools. <\/p>\n\n\n\n
It covers social\ninstitutions through which citizens and groups articulate their legitimate\ninterests and exercise their legal rights; how do the civilians fulfil their\nobligations and duties, and how do they mediate their differences? <\/p>\n\n\n\n
In the past few decades,\nwe have witnessed the collapse of big corporations triggered by bad governance.\nDue to management misdemeanour such as false reporting and creative accounting,\nbusiness enterprises with deep supply chain were declared insolvent and\nbankrupt. Thousand employees lost their jobs, impacting families and\nhouseholds.<\/p>\n\n\n\n
One\ncase that shocked the world at the turn of the millennium was ENRON, whose assets\nwas apparently valued at almost USD 65 billion, when in reality, directors and\nexecutives were concealing huge losses. Its auditor Arthur Andersen was found\nto have shredded documents of critical importance and committed obstruction of\njustice that led to the irreparable damage to their reputations. <\/p>\n\n\n\n
The subsequent\nbankruptcy of other corporations such as Lehman Brothers even surpassed ENRON\nas the biggest bankruptcy case in corporate history. This led to a series of\nexpos\u00e9 of accounting and corporate scandals. As a result, investors, clients,\ncustomers and employees lost their trust in mega financial companies. A global\nscale financial market meltdown was unstoppable. <\/p>\n\n\n\n
Without good\ngovernance, even independent countries face a real risk of falling into sovereign\ndebt crises, being unable to meet their outstanding liabilities. Argentina,\nVenezuela and Greece are all cases in point. <\/p>\n\n\n\n
All these international\nand local cases that are unfolding before our eyes served as a warning \u2014 a\nwarning of what could happen if virtues, transparency, and good corporate\npractices are not adhered to. <\/p>\n\n\n\n
The Prophet\nMuhammad said, \u201cVerily Allah has decreed that everything you do should be done\nwith excellence\u201d (narrated by Imam Muslim). <\/p>\n\n\n\n
Based on this\nProphetic saying, Dr Mostafa al-Badawi explains: \u201cA Muslim is thus obliged to\nkeep his activities under constant scrutiny and never allow himself to fall\nshort of the required standard. If he fall short of the standard, he is guilty\nof neglect. The extent to which he fails to comply with this rule is the degree\nto which his faith and knowledge of the requirements of his religion is\ndefective. A Muslim strives for excellence in every act, in the awareness that\nit is God who is watching him, not only his supervisor.\u201d<\/p>\n\n\n\n
In Malaysia,\ncorporate governance encompasses the Board, Audit Committee, Risk Management,\nInternal Control, and Stakeholders. <\/p>\n\n\n\n
The Company Board\nis expected to provide stewardship by performing its responsibilities well.\nEffective Board is ensured through a balanced composition of its members and remuneration\nthat corresponds to their level of competence. Management must be based on\ntrust, accountability and trustworthiness. <\/p>\n\n\n\n
While leaders\nmust play a role of providing strategic direction, it must be done through\nconsultative deliberation, discussion, and collective responsibility. This\nrequires effective audit committee, risk management and internal control.<\/p>\n\n\n\n
Allah commands in\nthe Qur\u2019an: \u201cand consult with them in all matters of public concern; then, when\nyou has decided upon a course of action, place your trust in Allah: for Allah\nloves those who place their trust in Him.\u201d (surah Ali \u2018Imran<\/em>, 3: 159). <\/p>\n\n\n\n In another verse,\nAllah describes true believers as \u201cthose who obeyed the command of their Lord\nand pray regularly; and whose affairs [in all matters of common concern] are\nsettled by mutual consultation; and from what We have provided for them, they\nspend in Our cause.\u201d (surah asy-Syura<\/em>, 42:38)<\/p>\n\n\n\n Commentators of\nthe Qur\u2019an explain that governance must be done through consent and council. Mutual\nconsultation must be regarded as one of the fundamental provisions of all\nQur’anic legislation relating to governance: planning, enforcement, and\nimplementation. <\/p>\n\n\n\n All authorities\nagree that the ordinance of consultation\u2014although addressed in the first\ninstance to the Prophet Muhammad\u2014is binding on all Muslims and for all times.<\/p>\n\n\n\n When the Prophet\nwas asked to explain the implications of the above verse, he replied, “It\nmeans taking counsel with knowledgeable people and then following them [in\ntheir sound, knowledge-based counsels].” This particular quality of true\nbelievers is regarded by the Prophet’s Companions as so important that they\nalways referred to chapter no. 42 of the Qur\u2019an by the key-word\n“consultation” (syura<\/em>).\n\nIt\nhas two significant aspects: firstly, as a reminder of all followers of the\nQur\u2019anic universal teachings that they must remain united within one single\ncommunity (ummah<\/em>). Secondly, a prescriptive principle that all their collective\nconcern must be monitored and accomplished by civic participation\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":" Governance refers to the exercise of economic, political, social or administrative powers to manage public affairs. All levels are involved, including corporations, federal and state governments, local governance and other entities. It comprises the mechanisms, processes, proper procedures and management tools. It covers social institutions through which citizens and groups articulate their legitimate interests and…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_analytify_skip_tracking":false,"_wpzoom_pinterest_image_url":"","_wpzoom_pinterest_hidden_image":"0","_wpzoom_pinterest_description":"","footnotes":""},"categories":[225],"tags":[],"class_list":["post-26977","post","type-post","status-publish","format-standard","hentry","category-article","category-225","description-off"],"_links":{"self":[{"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/posts\/26977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/comments?post=26977"}],"version-history":[{"count":0,"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/posts\/26977\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/media?parent=26977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/categories?post=26977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ikim.gov.my\/en\/wp-json\/wp\/v2\/tags?post=26977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}