IFC-IFSB seminar participants discuss governance issues for institutions offering Islamic Financial Services

The IFC Global Corporate Governance Forum, the Islamic Financial Services Board, and the World Bank Group Corporate Governance Department recently organised a seminar in Manama, Bahrain, to increase awareness of corporate governance issues in Islamic finance.

The Central Bank of Bahrain hosted the seminar on March 11 and 12, 2008. Participants included more than 60 senior bankers from Bahrain, other Gulf Cooperation Council countries, Indonesia, Malaysia, and Sudan. Topics focused on banking, insurance, and capital markets-particularly collective investment schemes.

Peter Dey, Chairman of the Forum's Private Sector Advisory Group, emphasised the connection between good corporate governance and proper functioning of the economy. He also addressed the main challenges in corporate governance and suggestions on how to overcome them. Participants' discussions focused on corporate governance standards that have been developed by IFSB, with insights provided by regulatory officials, corporate governance specialists at international multilateral agencies, and industry practitioners.

Professor Rifaat Ahmed Abdel Karim, Secretary General of IFSB, said, "We recognise the challenges of good governance, and have thus prepared several principle-based corporate governance guidelines, covering institutions that offer Islamic financial services as well as Islamic collective investment schemes. We are also developing corporate governance guidelines for takâful operations and Sharî`ah governance. We trust these guidelines will inculcate strong governance in Islamic financial services and contribute to confidence and financial stability in the industry."

"The IFSB has drafted a series of principles on Islamic finance. This event was designed to raise awareness of these issues and to advance discussions on appropriate modalities for ensuring good governance," said Eugene Spiro, Senior Projects Officer of the IFC Global Corporate Governance Forum.

This was the first joint seminar that IFSB, the World Bank Group, and the IFC Global Corporate Governance Forum have tailored to corporate governance practice and related regional issues. The seminar attracted regional and international experts' attention to key issues that will be addressed going forward.

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About IFC

IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilising private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC's vision is that people should have the opportunity to escape poverty and improve their lives.

In FY07, IFC committed $8.2 billion and mobilised an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org

The IFC Global Corporate Governance Forum is an IFC multidonor trust fund facility. It was cofounded by the World Bank and the OECD in 1999. Through its activities, the forum aims to promote the private sector as an engine of growth, reduce the vulnerability of developing and transition economies to financial crisis, and provide incentives for corporations to invest and perform efficiently in a socially responsible manner.

It sponsors regional and local initiatives that address the corporate governance weaknesses of middle- and low-income countries in the context of broader national or regional economic reform programs. Its donors include IFC and the governments of Canada, France, Luxembourg, the Netherlands, Norway, Sweden, and Switzerland. For more information, visit www.gcgf.org

About the Islamic Financial Services Board

IFSB is an international standard-setting organisation that promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry, broadly defined to include banking, capital markets, and insurance sectors.

IFSB also conducts research and coordinates initiatives on industry-related issues, as well as organises roundtables, seminars, and conferences for regulators and industry stakeholders. IFSB works closely with relevant international, regional, and national organisations; research and educational institutions; and market players. For more information, visit www.ifsb.org.