Survey on
Sharia Supervisory Boards
Mohamed Ben Youssef
Executive Director
CIBAFI -2010SECTION 1: Sharia Supervisory Boards in IFIs:
1- The actual constitution of the SSBs is convenient to the IF industry requirements.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
2- Sharia Boards in IFIs are fully independent and reliable.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
3- The Islamic financial system needs another Sharia supervisory structure other than the existing one.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
4- Sharia Boards can fully fulfill their mission without a central supervisory authority.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
5- Having SSBs in IFIs in parallel with central SSBs would cause confusion and conflict in the IF industry.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
SECTION 2: Central Sharia Supervisory Boards:
1- Central Sharia Supervisory Boards should be binding in terms of resolutions to all Sharia Boards in IFIs.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
2- The Sudanese model in Sharia boards is the best model to follow.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
3- The Malaysian Sharia supervisory model is the best model to follow.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
4- Having a central Sharia Supervisory Board in every country should be compulsory.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
5- In order to guarantee independence and integrity, Central SSB members should not take part in Sharia Bs
in IFIs.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
SECTION 3: International Sharia Supervisory Board:
1- The Islamic Financial system needs an International Sharia Supervisory authority.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
2- The International Sharia Supervisory Boards should be binding to
Central Sharia Boards in each country in terms of resolutions and fatwas.
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree
3- For an International Sharia Board to be credible and viable it should be affiliated to an internationally
recognized body such as the OIC.
 Strongly disagree
 Disagree
 Neutral
 Agree
 Strongly agree
4- Having an international Shariah supervisory Board would conflict with the mission of Fiqh academies.
 Strongly disagree
 Disagree
 Neutral
 Agree
 Strongly agree
5- The hierarchal structure of local SSBs, Central SSBs, and
International SSBs would fit the best to the Islamic finance industry
 Strongly disagree
 Disagree
 Neutral
 Agree
 Strongly agree
1. Introduction
This survey was conducted to gather feedback from stakeholders in Islamic finance. The
research methodology is based on a self-administered questionnaire published online to be
easily answered by the target population. It was also sent by email to some selected people
working in the Islamic finance industry and having a direct relation with the topic (Sharia
Supervisory Boards). The survey questions are included herein. The questionnaire is
divided into three sections. Section one consists of five questions based on a categorical
nominal scale “Likert scale” (5-scaled statements varying from strongly agree to strongly
disagree) that target the first variable which is local Sharia Boards in IFIs. Section two
consists of questions on a Likert scale as well (5-scaled statements varying from strongly
agree to strongly disagree) that target the second variable which is Central Sharia
Supervisory Boards in countries. Section three consists of questions on a Likert scale (5scaled statements varying from strongly agree to strongly disagree) that target the third
variable which is the suggested International Sharia supervisory structure. Such a
categorical, nominal scale has been used to ensure high sensitivity and measure accurately
the variability in responses among the different strata in the Islamic finance industry.
Demographic questions like gender, age, position, type of organization, years of
experience, etc… were included for their importance.
2. RESEARCH METHODOLOGY
-
Target Population and Sampling
The target population for this research includes employees in all types of Islamic financial
institutions such as banks, Takaful, funds, and Academicians. It includes as well Sharia
supervisors, Scholars, experts, Islamic finance trainers and executives. The target
population will give different answers based on their perception of Sharia board's
supervision which is the aim of this study. Limiting the population to a specific group such
as only executives or only academicians or Shariah scholars will result in a specific trend
of answers which is likely to be far away from representing the whole population of the
Islamic finance industry.
Sampling was conducted on the basis of non-probability design where units of the sample
have been selected on the basis of their knowledge and position in the Islamic finance
arena. This was done to save time and money and still to ensure a fair generalizability of
results in the analyses. The targeted population is divided into five groups: Experts, Sharia
board members, Islamic financiers, Academicians and Islamic bankers.
Stratified sampling procedure was implemented in order to assure that each stratum had
been represented and had an equal chance of being included in the sample. The sample was
set for 70 people from different trends in Islamic finance since it is limited to the IF arena,
and more specifically to Shariah supervision sector. The achieved number of respondents
is 100 which would give a better variance in answers to the targeted assumption of 70
respondents.
-
Instrumentation and Data Collection
A non-interactive media through a self-administered online survey tool has been used to
conduct the survey. The respondents were then notified and requested to answer the survey
questionnaire by email including the link of the webpage. A certain type of population
received the survey by email and sent it back by email. The data collection was manually
performed and a comprehensive reporting of all data in normal and numerical formats has
been made for analysis. In order to increase the response rate, follow up emails and
advanced notifications had been sent to respondents.
-
Data Reliability
The estimated number of stakeholders in Islamic finance reaches 100,000 including
employees, executives, experts, scholars, trainers, and academicians. The sample size set
to 70 shows a confidence level of 90% with a sampling error of 10%.
3. DATA ANALYSIS
Data analysis consists of two parts in this study. Part one of the study will show the
frequency of respondents’ answers for each section of the questionnaire with tables and
figures. The second part will show the mean of each independent variable and discuss the
results based on the mean values.
Part 1: The demographic questions are general questions to see the background of each
respondent. The questions relevant to the name, qualifications, and Job title have been
omitted from the frequency analysis since they are open-ended question. The tables and
figures below show the frequency of the remaining questions.
Distribution of respondents by gender: Table 1
Respondents by gender
5%
Males
Females
95%
We notice, through studying the above chart, that the number of males including experts,
practitioners, scholars and executives in the Islamic finance industry is dominated by males
with almost 95% of males in comparison to only 5% females.
Distribution of respondents by position: Table 2
Respondents by position
6%
13%
33%
8%
Experts
Academicians
40%
Bankers
I Financiers
The above chart shows that bankers represent the biggest number in this sector, followed
by other Islamic financiers in different fields including Islamic funds and Takaful.
Distribution of respondents by country: Table 3
Distribution of respondents
by country
UAE
Libya
10%
Saudi Arabia
10%
4%
Bahrain
36%
Kuwait
5%
syria
6% Tunisia
Jordan
17%
12%
The above chart shows the respondents’ distribution by country with Bahrain having the
biggest stake reaching 36%, followed by Jordan with 17%.
Part 2: Part 2 consists of three sections. Each section contains five questions.
Section 1: This section covers Shariah Boards in Islamic financial institutions. The purpose
of these MC questions is to see how experts, bankers and stakeholders in Islamic finance
industry perceive Shariah boards in IFIs, and to what extent they view the current structure
viable and efficient.
The tables and figures below show the frequency of section 1 questions.
Table 1. S1Q1-Q5 Frequency Analysis
Axis Title
Section 1
80
70
60
50
40
30
20
10
0
Disagree
Neutral
Agree
Strongly agree
1
Strongly
disagree
0
14
4
78
4
2
0
12
20
61
7
3
9
36
17
33
5
4
19
39
15
27
0
5
56
41
1
2
0
Section 2: Central Shariah Boards: The purpose of these MC questions is to see how
experts, bankers and stakeholders in Islamic finance perceive existing Central Shariah
boards, and to what extent they view the existing structure viable and efficient.
The below tables and figures show the frequency of section 2 questions:
Table 2. S2Q1-Q5 Frequency Analysis
60
50
40
30
20
10
0
Section 2
Strongly
disagree
Disagree
Neutral
Agree
Strongly
agree
1
Strongly disagree
0
Disagree
0
Neutral
12
Agree
57
Strongly agree
31
2
17
44
13
26
0
3
18
47
15
20
0
4
5
8
6
41
40
5
23
57
10
8
2
Section 3: The International Shariah Supervisory Board: The purpose of these MC
questions is to see how experts, bankers and stakeholders in Islamic finance perceive the
existing Shariah supervision structure and to what extent they perceive a need for an
international Shariah supervisory board, and to what extent they view the existing structure
viable and efficient.
The below tables and figures show the frequency of section 3 questions:
Table 3. S3Q1-Q5 Frequency Analysis
Respondents
Section 3
80
70
60
50
40
30
20
10
0
Disagree
Neutral
Agree
1
Strongly
disagree
0
0
1
29
Strongly
agree
70
2
0
0
2
18
80
3
0
5
10
37
48
4
70
30
0
0
0
5
3
73
15
9
0
4. DISCUSSION
The main objective of this survey is to have viable feedback responses from reliable experts
and scholars in the Islamic finance industry. The survey consists of three sections in
addition to the demographic part.
Section one main objective is to show that Sharia Supervisory boards are crucial to the
industry. Nonetheless, with its current structure, it still needs improvements.
The second section deals with central Shariah supervisory boards. The current structure
showed as well that it is not sufficient and efficient. It still needs restructuring in a way to
have a central Shariah supervisory board in every country whose resolutions should be
binding to the local Shariah supervisory boards in Islamic financial institutions.
The third section deals with the suggested model for an international Shariah supervisory
board or organ which emanates from the Islamic Fiqh Academy and should have an
internationally recognized authority.
The main trend of answers among respondents showed the tendency towards having a
reliable internationally recognized structure as shown earlier in this research.
The results collected in this survey support the hypothesis of having an internationally
recognized supervisory structure.
5. SUMMARY
This study showed that there is a general tendency towards having a supervisory structure
which is recognized on each country level, as well as the international level.
Having local Shariah supervisory boards within Islamic financial institutions alone without
any central supervisory authority within the country itself would affect adversely the
Islamic finance industry, since no accountability may lead to abuse.
Having a central Sharia supervisory authority in each country is a must as well to ensure
the enforceability of a centralized opinion which eliminates deviations and misuse.
An international supervisory authority, whether belonging to the OIC, the international
Fiqh Academy or any other internationally recognized institution, would reinforce the
sector and provide a common accredited source of fatwas and ensure unity and integrity.