Revisiting the paradigm of Sharīʿah governance of Islamic financial institutions

Purpose - The purpose of this paper is to find out the possible gaps in the Sharīʿah governance, and suggest how to fill the same, in line with the principles of Islamic finance and the global developments regarding social and value-based financial intermediation. Design/methodology/approach - The paper uses secondary data gathered through analysis of documents and regulations to portray the current Sharīʿah governance framework and to suggest a unique paradigm to be adopted by the regulators of Islamic financial institutions. Findings - The paradigm encompassing value-oriented financial ecosystem would need a comprehensive set of discipline, accountability and governance for making the pursuit of sustainable development goals and corporate social responsibilities effective in a well-defined schedule prepared and implemented by the regulators. Research limitations/implications - The scope of this research is limited to theory building in the light of emerging trends in responsible and social finance. It is not to empirically test the impact of the governance framework in terms of social justice, corporate responsibility and sustainability. Practical implications - It would help the policy makers, regulators, researchers and the practitioners in finance to align banking and finance with social and environmental responsibility, and equity through governance and accountability for realizing the sustainable development goals. Social implications - It links the regulatory approaches to the emerging paradigm and ecosystem comprising sustainability and value-based governance, awareness and corporate social responsibility. Originality/value - The paper adds value to the current regulatory frameworks enabling the Islamic financial institutions to realize the economic, social and sustainability objectives, in addition to Shariah legitimacy and enhanced credibility.