Critical Analysis of the Code of Corporate Governance in the Light of Islamic Principles of Corporate Governance

Abstract

Corporate governance is intended to create accountability in companies in order to avoid corporate disasters, as it believes on prevention rather than cure. This paper examines the code of corporate governance in the ambit of Islamic principles of corporate governance. It intends to identify weaknesses in the prevalent ideologies of corporate governance in Pakistan and propose reforms in them getting the insight from Islamic ideologies of corporate governance as well. To conduct research for this paper, qualitative research methodology has been used by employing doctrinal approach along with interpretative philosophy to comprehend the underlying meaning of corporate laws and the code of corporate governance of Pakistan. This paper would have a significant impact on the existing knowledge and the on-going debate regarding the significance of corporate governance principles for the advancement of business sector for accountability, transparency and disclosure requirements.

Keywords

• Code of Corporate Governance
• Company Law
• Islamic concept of corporate governance
• Independent non-executive directors (INEDs)
• Board of directors (BODs)