This paper discusses a new model of Islamic code of
ethics for directors. Several corporate scandals and local (example
Transmile and Megan Media) and overseas corporate (example
Parmalat and Enron) collapses show that the current corporate
governance and regulatory reform are unable to prevent these events
from recurring. Arguably, the code of ethics for directors is under
research and the current code of ethics only concentrates on binding
the work of the employee of the organization as a whole, without
specifically putting direct attention to the directors, the group of
people responsible for the performance of the company. This study
used a semi-structured interview survey of well-known Islamic
scholars such as the Mufti to develop the model. It is expected that
the outcome of the research is a comprehensive model of code of
ethics based on the Islamic principles that can be applied and used by
the company to construct a code of ethics for their directors.
[1] A. Klien, "Audit committee, board of directors characteristics and
earnings management," Journal of Accounting and Economics, vol. 35,
pp. 375-400, 2003.
[2] J.C. Gaa, "Corporate governance and the responsibility of the board of
directors for strategic financial reporting," Journal of Business Ethics,
vol. 90, no. 2, pp. 179-197, 2010.
[3] R.J. Duchin, Matsusaka, and O. Ozbas, "When are outside directors
effective?," Journal of Financial Economics, vol. 96, pp. 195-124,
2010.
[4] Y. Wang, C. Chuang, and S. Lee, "Impact of compositions and
characteristics of board of directors and earnings management on
fraud," African Journal of Business Management, vol. 4, no. 4, pp. 496-
511, 2010.
[5] M.S. Schwartz, T.W. Dunfee, and M.J. Kline, "Tone at the tops: An
ethics code for directors?" Journal of Business Ethics, vol. 58, pp. 79-
100, 2005.
[6] N. Marquardt and R. Hoeger, "The effect of implicit moral attitudes on
managerial decision makings: An implicit social cognition approach"
Journal of Business Ethics, vol. 85, pp.157-171, 2009.
[7] M. Kaptein, "Business code of multinational firm: What do they say?"
Journal of Business Ethics, vol. 59, pp. 13-31, 2004.
[8] H. Donker, D. Poff and S. Zahir, "Corporate values, code of ethics and
firm performance: A look at the Canadian context," Journal of Business
Ethics, vol. 82, no. 3, pp. 527-537, 2008.
[9] E. Dedoulis, "The code of ethics and the development of the auditing
profession in Greece: The period 1992-2002," Accounting Forum, vol.
30, pp. 155-178, 2006.
[10] K.P. Parboteeah, Y. Paik, and J.B. Cullen, "Religious groups and work
values: A focus on Buddhism, Christianity, Hinduism, and Islam,"
International Journal of Cross Cultural Management, vol. 9, no. 1, pp.
51-67, 2009.
[11] Z. Ma, "The status of contemporary business ethics research: Present
and future," Journal of Business Ethics, vol. 90, pp.255-265, 2009.
[12] B.R. Gaumnitz and J.C. Lere, "Contents code of ethics of professional
business organizations in the United States," Journal of Business Ethics,
vol. 35, pp.35-49, 2002.
[13] M.S. Schwartz, "The nature and the relationship between corporate code
of ethics and behavior," Journal of Business Ethics, vol. 32, pp. 247-
262, 2001.
[14] J.B. Singh, "A comparison of the contents of the codes of ethics of
Canada-s largest corporations in 1992 and 2003," Journal of Business
Ethics, vol. 64, pp. 17-2, 2006.
[15] C. Stohl, M. Stohl and L. Popova, "A new generation of corporate code
of ethics," Journal of Business Ethics, vol. 90, no. 4, pp. 607-622, 2009.
[16] S. Helin, and J. Sandstrom, "An inquiry into the study of corporate
codes of ethics," Journal of Business Ethics, vol. 75, pp. 253-271,
2007.
[17] J.M. Rose, "Corporate directors and social responsibility: Ethics versus
shareholders value," Journal of Business Ethics, vol. 73, no. 3, pp. 319-
331, 2007.
[18] L. R. Dominguez, I.G. Alvarez, and I.M. Sanchez, "Corporate
governance and codes of ethics," Journal of Business Ethics, vol. 90,
pp. 187-202, 2009.
[19] N. Alam and M.S. Rajjaque, "Shariah-compliant equities: Empirical
evaluation of performance in the European market during credit
crunch," Journal of Financial Services Marketing, vol. 15, no. 3, pp.
228-240, 2010.
[20] H.G. Rammal, "Islamic finance: Challenges and opportunities," Journal
of Financial Services Marketing, vol. 15, pp. 189 - 190, 2010.
[21] N.K. Malhotra, Marketing Research: An Applied Orientation.
Edinburgh, Pearson Education Limited, 2007.
[22] E.A.Z.E. Alwi, "Peranan akidah dalam pembangunan tamaddun
ummah" in Pembangunan Modal Insan dan Tamaddun Dari Perspektif
Islam, M.R.M. Nor and A.Z.B. Ibrahim, Ed. Shah Alam: Akademi
Pengajian Islam Universiti Malaya, pp. 169-180, 2010.
[23] S.S.S. Haneef, Ethics and Fiqh for Daily Life - An Islamic Outline.
Kuala Lumpur: IIUM Press, 2008.
[24] M. Al-Qattan, al-Tashri-wa al-Fiqh fi al-Islam. Beirut: Maktabah
Wahbah, 1984.
[25] A.R. Feisal, Islam - A Sacred Law. Library of Congress: Qiblah Books,
2000.
[26] Al-Ghazali. Bimbingan Mu-min. Singapura: Pustaka Nasional, , pp 433-
438, 1995.
[1] A. Klien, "Audit committee, board of directors characteristics and
earnings management," Journal of Accounting and Economics, vol. 35,
pp. 375-400, 2003.
[2] J.C. Gaa, "Corporate governance and the responsibility of the board of
directors for strategic financial reporting," Journal of Business Ethics,
vol. 90, no. 2, pp. 179-197, 2010.
[3] R.J. Duchin, Matsusaka, and O. Ozbas, "When are outside directors
effective?," Journal of Financial Economics, vol. 96, pp. 195-124,
2010.
[4] Y. Wang, C. Chuang, and S. Lee, "Impact of compositions and
characteristics of board of directors and earnings management on
fraud," African Journal of Business Management, vol. 4, no. 4, pp. 496-
511, 2010.
[5] M.S. Schwartz, T.W. Dunfee, and M.J. Kline, "Tone at the tops: An
ethics code for directors?" Journal of Business Ethics, vol. 58, pp. 79-
100, 2005.
[6] N. Marquardt and R. Hoeger, "The effect of implicit moral attitudes on
managerial decision makings: An implicit social cognition approach"
Journal of Business Ethics, vol. 85, pp.157-171, 2009.
[7] M. Kaptein, "Business code of multinational firm: What do they say?"
Journal of Business Ethics, vol. 59, pp. 13-31, 2004.
[8] H. Donker, D. Poff and S. Zahir, "Corporate values, code of ethics and
firm performance: A look at the Canadian context," Journal of Business
Ethics, vol. 82, no. 3, pp. 527-537, 2008.
[9] E. Dedoulis, "The code of ethics and the development of the auditing
profession in Greece: The period 1992-2002," Accounting Forum, vol.
30, pp. 155-178, 2006.
[10] K.P. Parboteeah, Y. Paik, and J.B. Cullen, "Religious groups and work
values: A focus on Buddhism, Christianity, Hinduism, and Islam,"
International Journal of Cross Cultural Management, vol. 9, no. 1, pp.
51-67, 2009.
[11] Z. Ma, "The status of contemporary business ethics research: Present
and future," Journal of Business Ethics, vol. 90, pp.255-265, 2009.
[12] B.R. Gaumnitz and J.C. Lere, "Contents code of ethics of professional
business organizations in the United States," Journal of Business Ethics,
vol. 35, pp.35-49, 2002.
[13] M.S. Schwartz, "The nature and the relationship between corporate code
of ethics and behavior," Journal of Business Ethics, vol. 32, pp. 247-
262, 2001.
[14] J.B. Singh, "A comparison of the contents of the codes of ethics of
Canada-s largest corporations in 1992 and 2003," Journal of Business
Ethics, vol. 64, pp. 17-2, 2006.
[15] C. Stohl, M. Stohl and L. Popova, "A new generation of corporate code
of ethics," Journal of Business Ethics, vol. 90, no. 4, pp. 607-622, 2009.
[16] S. Helin, and J. Sandstrom, "An inquiry into the study of corporate
codes of ethics," Journal of Business Ethics, vol. 75, pp. 253-271,
2007.
[17] J.M. Rose, "Corporate directors and social responsibility: Ethics versus
shareholders value," Journal of Business Ethics, vol. 73, no. 3, pp. 319-
331, 2007.
[18] L. R. Dominguez, I.G. Alvarez, and I.M. Sanchez, "Corporate
governance and codes of ethics," Journal of Business Ethics, vol. 90,
pp. 187-202, 2009.
[19] N. Alam and M.S. Rajjaque, "Shariah-compliant equities: Empirical
evaluation of performance in the European market during credit
crunch," Journal of Financial Services Marketing, vol. 15, no. 3, pp.
228-240, 2010.
[20] H.G. Rammal, "Islamic finance: Challenges and opportunities," Journal
of Financial Services Marketing, vol. 15, pp. 189 - 190, 2010.
[21] N.K. Malhotra, Marketing Research: An Applied Orientation.
Edinburgh, Pearson Education Limited, 2007.
[22] E.A.Z.E. Alwi, "Peranan akidah dalam pembangunan tamaddun
ummah" in Pembangunan Modal Insan dan Tamaddun Dari Perspektif
Islam, M.R.M. Nor and A.Z.B. Ibrahim, Ed. Shah Alam: Akademi
Pengajian Islam Universiti Malaya, pp. 169-180, 2010.
[23] S.S.S. Haneef, Ethics and Fiqh for Daily Life - An Islamic Outline.
Kuala Lumpur: IIUM Press, 2008.
[24] M. Al-Qattan, al-Tashri-wa al-Fiqh fi al-Islam. Beirut: Maktabah
Wahbah, 1984.
[25] A.R. Feisal, Islam - A Sacred Law. Library of Congress: Qiblah Books,
2000.
[26] Al-Ghazali. Bimbingan Mu-min. Singapura: Pustaka Nasional, , pp 433-
438, 1995.
@article{"International Journal of Business, Human and Social Sciences:63167", author = "Ahmad Saiful Azlin Puteh Salin and Norlela Kamaludin and Siti Khadijah Ab Manan and Mohd Shatari Abdul Ghafar", title = "Directors- Islamic Code of Ethics", abstract = "This paper discusses a new model of Islamic code of
ethics for directors. Several corporate scandals and local (example
Transmile and Megan Media) and overseas corporate (example
Parmalat and Enron) collapses show that the current corporate
governance and regulatory reform are unable to prevent these events
from recurring. Arguably, the code of ethics for directors is under
research and the current code of ethics only concentrates on binding
the work of the employee of the organization as a whole, without
specifically putting direct attention to the directors, the group of
people responsible for the performance of the company. This study
used a semi-structured interview survey of well-known Islamic
scholars such as the Mufti to develop the model. It is expected that
the outcome of the research is a comprehensive model of code of
ethics based on the Islamic principles that can be applied and used by
the company to construct a code of ethics for their directors.", keywords = "Code of ethics, director, Islam, ethics", volume = "6", number = "4", pages = "665-3", }
