Corporate governance in Islamic banks Essay Example | Topics and Well Written Essays - 2250 words

Corporate organisation in Islamic banks - Essay faceIn order to understand the value of this study it would be necessary to refer to the content of somatic governance. Various definition have been given for embodied governance. An indicative one is that of Pedersen who noted that corporate governance - the mechanisms by which companies are controlled and directed - is a complex subject that consists of owner-manager relations, stakeholder relations, board structures and practices, management compensation, capital structure, gild law, and other variables from another point of view corporate governance is characterized as the top management process that manages and mediates value creation for, and value transference among, divers(a) corporate claimants in a context that ensures accountability to these claimants in the same context, corporate governance is described as a tool for enhancing the control of stakeholder on a specific organization. It is clear from the above that corpor ate governance is usually developed in accordance with the interests and the perceptions of a firms leading aggroup usually the firms board however, there are specific rules that needs to be applied. OECD presents the legal framework in which a firms corporate governance has to be developed. In the context of these rules it is stated that all shareholders should be treated equally. In the case of banks, the development of corporate governance practices may be differentiated compared to the organizations in other industrial sectors the high risk involve in banking activities would be the major criterion for the rules including in the corporate governance scheme developed by firms in the banking industry.