---
title: "What is Shariah governance system? | IslamicOpenFinance™"
description: "The institutional arrangements through which an institution ensures independent oversight of its Shariah compliance."
url: https://islamicopenfinance.com/glossary/shariah-governance-system/
lang: en-GB
source: "IslamicOpenFinance"
---

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

Shariah governance

# Shariah governance system

The institutional arrangements through which an institution ensures independent oversight of its Shariah compliance.

A Shariah governance system is the set of institutional and organisational arrangements through which an institution offering Islamic financial services ensures effective independent oversight of Shariah compliance. IFSB-30 lists the structures and processes it covers: issuing Shariah pronouncements, disseminating them to operating staff, and internal Shariah compliance review or audit. Supervisors assess it under IFSB-31, and AAOIFI sets out a framework in its governance standards.

## Sources

- [IFSB-30 Revised Guiding Principles on Corporate Governance for IIFS (Banking Segment), 2023: Definitions, Shariah governance system](https://www.ifsb.org/wp-content/uploads/2024/01/IFSB-30-Revised-Guiding-Principles-on-Corporate-Governance-for-IIFS.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 review** A regular compliance function that assesses whether an institution's operations follow Shariah requirements.](https://islamicopenfinance.com/glossary/shariah-review/) [**Shariah audit** An independent assessment of internal controls, risk management and overall Shariah compliance, usually by internal audit.](https://islamicopenfinance.com/glossary/shariah-audit/) [**Shariah compliance function** The internal control function that checks, day to day, that operations follow Shariah board rulings.](https://islamicopenfinance.com/glossary/shariah-compliance-function/)

**Shariah governance**

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

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