---
title: "What is Conflict of interest (Shariah committee)? | IslamicOpenFinance™"
description: "A member's interest that could affect a decision; it must be declared, and the member steps out of that matter."
url: https://islamicopenfinance.com/glossary/conflict-of-interest/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Shariah governance](https://islamicopenfinance.com/glossary/#governance)

Shariah governance

# Conflict of interest (Shariah committee)

A member's interest that could affect a decision; it must be declared, and the member steps out of that matter.

A conflict of interest arises when a Shariah committee member has a personal interest that could affect, or appear to affect, a decision. Bank Negara Malaysia's Shariah governance policy document requires every member to disclose the nature and extent of any interest that creates an actual or potential conflict on appointment, on reappointment and whenever circumstances change, and to abstain from discussing and voting on the matter concerned. AAOIFI's fatwa standard likewise says a board member should have no personal interest in a matter on which the institution seeks an opinion.

## Sources

- [Bank Negara Malaysia, Policy Document on Shariah Governance, 2019: disclosure of conflicts of interest and abstention](https://www.bnm.gov.my/documents/20124/761679/Shariah+Governance+Policy+Document+2019.pdf)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Shariah supervisory board** An independent panel of Shariah scholars that approves an institution's products and oversees its Shariah compliance.](https://islamicopenfinance.com/glossary/shariah-board/) [**Shariah resolution (board decision)** A recorded decision of a Shariah board or committee on a product, transaction or issue, with its reasoning and any dissent.](https://islamicopenfinance.com/glossary/shariah-resolution/) [**Shariah governance system** The institutional arrangements through which an institution ensures independent oversight of its Shariah compliance.](https://islamicopenfinance.com/glossary/shariah-governance-system/) [**Fiduciary risk** The risk that an institution fails to meet the standards that apply to its duties as trustee or manager of others' funds.](https://islamicopenfinance.com/glossary/fiduciary-risk/)

**Shariah governance**

1. [Shariah supervisory board](https://islamicopenfinance.com/glossary/shariah-board/)
2. [Fatwa](https://islamicopenfinance.com/glossary/fatwa/)
3. [Shariah governance system](https://islamicopenfinance.com/glossary/shariah-governance-system/)
4. [Shariah review](https://islamicopenfinance.com/glossary/shariah-review/)
5. [Shariah audit](https://islamicopenfinance.com/glossary/shariah-audit/)
6. [Shariah non-compliance risk](https://islamicopenfinance.com/glossary/shariah-non-compliance-risk/)
7. [Purification of income](https://islamicopenfinance.com/glossary/purification/)
8. [Central Shariah board](https://islamicopenfinance.com/glossary/central-shariah-board/)

[All 221 terms](https://islamicopenfinance.com/glossary/)