One of the common challenges faced by most organisations is the issue of non-compliance in their day-to-day business operations. To a certain extent, non-compliance may result in the downfall of the entire organisation.
Undeniably, such is a fact as can be seen from many infamous corporate scandals such as Enron and WorldCom; and the dissolution of the once “Big-Five” accounting firm, Arthur Andersen.
Citing such foreign examples does not paint a clean image of Malaysia from public or private corporate scandals. Otherwise, the Malaysian Anti-Corruption Commission (MACC) is merely redundant in its operations and so are all of the laws on bribery and corruption in existence.
The root cause of corporate scandals – be they in Malaysia or elsewhere – is, in most cases, internal that springs out of greed and personal aggrandisement.
In any organisation, the human capital is the driving force behind any business success. Nevertheless, humans have the tendency to violate laws prescribed by Allah. Any wrongful act committed by the human capital can expose companies to operational risks.
To tame such a tendency, Islam has set down common rules and parameters which all Muslims—regardless of their status and position—must abide by. Theoretically, practising Muslims will observe all Syariah requirements. Subsequently, this will result in quality performance in all aspects of life, be it spiritual, individual, social, intellectual and economic.
In surah al-Nahl, Allah pronounces to this effect:
“Whoever works righteousness, man or woman, and has faith, verily, to him will We give a new Life, a life that is good and pure and We will bestow on such their reward according to the best of their actions.” (16:97).
While in another, He declares to this effect:
“So no soul knows what is hidden for them of that which will refresh the eyes; a reward for what they did.”
Both verses markedly indicate that for being compliant to His commandments, Allah has in store for us incentives which are beyond our comprehension that could be enjoyed in this mortal life or the life to come.
Thus, rule compliance in Syariah is a platform where man can seek and attain the pleasure of Allah. At the same time, it serves to negate evil elements.
Looking into the effects of rule compliance with that of Divine promises of blessings for our total submission to His Will and heeding His commands by doing good and refraining from evil deeds; such incentives, if embedded in management process, will also generate positive results in any organisation or institution. Notably, adherence to Syariah guidance will not only result in quality performance, but also reduce risk exposures of individuals and organisations to any possible vulnerability such as unsatisfactory performance or corrupt practices.
The western corporate society and the Japanese corporations have long realised the importance of the concept of rule compliance in managing organisational culture. However, it is implicitly embedded in the notion of quality that can be observed from the evolution of the concept itself which started from a mere individual inspection during the age of craftsmanship in Europe (between the 13th to the early 19th century) until the introduction of the ISO standards and the total quality management concept in the mid-70s and 80s.
By adopting certain standards and requirements in business processes and practices, and more importantly, complying with what the standards require, the Western and Japanese corporations have successfully managed to establish their brands as household names across the globe.
In the corporate world, compliance to certain standards is a pre-requisite for organisations to survive and remain competitive in the marketplace. The standards help organisations to at least meet and perhaps exceed stakeholders’ expectation. They give state of the art specifications for products, services and good practices. Thus, they help businesses to reduce costs by minimising waste and errors and increasing productivity. Besides improving the quality of products and services offered by organisations, standards also enhance market performance and assure transparency and accountability in financial management and financial reporting.
Knowing such a rule compliance is the key to the survival of any institutions, companies with a clear vision and mission will take every effort to ensure that culture of rule compliance is internalised and becomes part of the organisation and its human capital behavioural goals.
In Malaysia, numerous efforts have been undertaken to internalise the concept of rule compliance in both public and private sectors. In fact, both the private and public sectors have cooperatively worked together to inculcate the culture of rule compliance in product and service deliveries. The introduction of “Dasar Penerapan Nilai-nilai Islam dalam Pentadbiran” in 1985, the establishment of the Institute of Integrity Malaysia (IIM), the roll-out of halal standards are some of the initiatives carried out by the government in its efforts to instil good work values in organisations.
On top of all kinds of policy documents, there are regulatory bodies such as Bank Negara Malaysia, Securities Commission, the Malaysian Bar, the Malaysian Institute of Accountants etc. The objective of their establishment is none other than to oversee and regulate the industries and their members’ profession in compliance with the rules and regulations of the respective industries; as well as maintain the standards set by the industries or the professional bodies. Indeed, the need for such institutional frameworks is deemed pivotal to ensure the process of development in the respective industry is carried out in a very systematic and organised manner.
Ironically, despite numerous efforts and measures put into action, why does the issue of non-compliance still persist? As conceptual as it may be, rule compliance highly depends on each and every individual’s internalisation of it. To reap its desired effects as laid down in Islam, one needs to fulfil two conditions, namely, iman (faith) and taqwa (Allah-consciousness). Both are explicitly recorded in verse 96 of surah al-‘A’raaf to the effect that:
If the people of the towns had but believed and God conscious, We should indeed have opened out to them (All kinds of) blessings from heaven and earth; but they rejected (the truth), and We brought them to book for their misdeeds.
Basically, Allah presents two different scenarios that can bring about two different results to a society. On the one hand, He conceptualises barakah that awaits a particular group of people (ahl al-qura) should they be rule-compliant and constantly law-abiding to His Will. On the other hand, He also forewarns the consequence for rejecting His Divine rules.
The conditions of faith (iman) and god-consciousness (taqwa) for Allah’s blessings can bring definite change in the human behaviour. They induce people to be moderate, just and caring for others. The more a man becomes conscious of Allah, the greater is his extent of rule compliance. This in turn will determine the quality of his contribution at various levels, be it individual, familial, societal, organisational or governmental