Glossary
Shariah board
Definition
A panel of qualified scholars that supervises and certifies the shariah compliance of an Islamic financial institution.
Every Islamic bank, sukuk issuer, and shariah-compliant fund retains a shariah board to approve products, audit ongoing operations, and issue annual compliance reports. AAOIFI publishes governance standards on board composition and independence.
Quality varies. Boards staffed by the same handful of scholars across many institutions have been criticised for conflict-of-interest concerns; reform efforts push for independent appointments and rotation.