The Investment Initiative in Takā Ful : Issues and Challenges

Ali, Mohammad Mahbubi; Ahmad, Muhammad Ali

doi:10.12816/0002742

Cited by 1 publication

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“…This is particularly important with regard to the board of director’s accountability: to the takaful contributors as well as the shareholders (Archer et al , 2009). Moreover, in term of the investments being managed, the funds contributed are sourced from takaful contributors (Lewis, 2005; Ali et al , 2008), who ultimately face the investment risk (specifically of capital loss) (Ali and Ahmad, 2012; Mohd Kassim, 2012), suggesting that it is these parties that they should be reimbursed well.…”

Section: Resultsmentioning

confidence: 99%

“…Industry confidence regarding transparency in supplying information to stakeholders is not shared by industry observers. Ali and Ahmad (2012) emphasise that takaful operators should distinguish between the tabarru’ contribution and the fund that is used for investment in a separate agreement. Moreover, they suggest that the takaful contributors should be made aware of market movements and other relevant information impacting their invested funds.…”

Section: Resultsmentioning

confidence: 99%

“…Although confidential, there is nevertheless certain information that can be shared with takaful contributors, the ultimate risk bearers from investment of takaful funds. Ali and Ahmad (2012) suggest takaful operators disclose matters concerning market movements, potential risks and the types of assets the fund invests in.…”

Section: Linking Malaysian Rating Corporation’s Equitable Treatment Of Stakeholders and Csr Governance Qualities With The Uk Stewardship mentioning

confidence: 99%

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Linking governance qualities and stewardship attributes: findings from Malaysian takaful operators

Muhamat

McIver

2019

JIABR

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Purpose As custodians of takaful contributors’ tabarru’ (donation) funds, takaful operators are expected to fulfil a stewardship role propagated under the precepts of Islam. The purpose of this paper is to analyse takaful operators’ stewardship, focusing on investment practices. Design/methodology/approach Structured interviews were conducted with senior investment staff from all of Malaysia’s takaful operators. Questions, developed using Delphi-style techniques, allowed a five-point Likert scale response addressing specific issues revolving around seven dimensions of governance quality – using the Malaysian Rating Corporation’s (MARC’s) governance rating guidelines for Islamic financial institutions (IFIs). Interviewees’ responses were assigned composite scores. Findings Malaysia’s takaful operators score well on most prescribed governance quality dimensions, although performance varies between operators and across dimensions. Areas for improvement are identified, especially regarding disclosure of information and contributor involvement in takaful operators’ management. Research limitations/implications Predetermined questions restrict flexibility in obtaining takaful operators’ information; however, end-of-interview, open-ended questions were asked to tap interviewee opinions on pertinent issues. A focus on takaful operators’ governance quality and stewardship of investments means findings may not be representative of all operational aspects of their businesses. Practical implications This study identifies governance quality guidelines which takaful operators may benchmark against and identifies where best to focus attempts to improve performance. These guidelines will also assist regulators assessing takaful operators’ stewardship performance. Originality/value This study uses governance quality as an indicator of stewardship, a concept aligned with the precepts of Shariah. It covers the opinion of the takaful industry in a country with a comprehensive Islamic financial system, Malaysia, extending understanding of takaful operators’ governance quality.

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Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Section: Linking Malaysian Rating Corporation’s Equitable Treatment Of Stakeholders and Csr Governance Qualities With The Uk Stewardship mentioning

confidence: 99%

See 1 more Smart Citation

Linking governance qualities and stewardship attributes: findings from Malaysian takaful operators

Muhamat

McIver

2019

JIABR

View full text Add to dashboard Cite

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The Investment Initiative in Takā Ful : Issues and Challenges

Cited by 1 publication

References 0 publications

Linking governance qualities and stewardship attributes: findings from Malaysian takaful operators

Linking governance qualities and stewardship attributes: findings from Malaysian takaful operators

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