Let me just say upfront this post is not really about the Islamic financial products that we are familiar with in the United States, where "Islamic Finance" products known in much of the world do not exist yet. The foundation for what passes for Islamic Finance are corporate created "Sharia'h Compliance Boards" that provide scholarly approval for new-fangled product designs. The Islamic Finance Industry globally, is enormous. It also appears the industry is completely out of the hands of Muslims and Islamic Scholars, who seem to have no meaningful influence on what occurs in this world.
A piece in the Financial Times by Andrew Cunningham (Registration Required) addresses this problem, concluding that Islamic Scholars should have more say about the strategy involved. Corporate decisions are made in boardrooms. Compliance boards are paid for their stamps of approval. Scholars have made efforts to rein in some control. Cunningham cites The Islamic Financial Services Board and the Accounting and Auditing Organisation for Islamic Financial Institutions, which are both admired and respected for their work. However they do not appear to be remarkably influential. This makes sense. Such organizations do not control the strategy, direction or policies of the corporations, which do not have the Sharia'h as their starting point.
