Analysis of governance practices in selected charitable institutions in Islam: Australia and Malaysia

Islamic charities play significant roles in promoting education, economic growth, and social transformation of Islamic societies. However, governance scandals and governance issues are increasing in developing and developed countries especially in Australia where the issues of misuse the public funds and incompliance of governance standards have escalated the situation. In Malaysia, previous studies reported improper governance practices in terms of management, administration and legal aspects. Governance is identified as an effective mechanism to reduce Islamic charities’ issues and able to increase the public’s trusts. However, there are relatively few studies that have focused on the governance for Islamic charities which trigger a further understanding of the current governance practice in the Islamic charities’ context. The main aim of this study is to examine how the governance of Islamic charities in Australia and Malaysia could be improved from this study. To achieve this aim, the examination towards the role and composition of the board of trustees and management members will be able to identify the governance issues and challenges that occurred in these Islamic charities which latter able to improve the performance of the Islamic charities. The study utilised the case study approach to obtain an insight into the nature of governance practice in Islamic charities in Australia and Malaysia. In-depth semi-structured interviews and document analysis were the techniques used to gather data for the study. A total of thirteen research participants agreed to participate in this research. It was found that similarities and differences exist between Australian and Malaysian Islamic charities in terms of roles and compositions of the members of Islamic charities. In terms of operation roles of the members of Islamic charities, activities and programme roles are very similar found in both Islamic charities. As for the composition of the members of Islamic charities, qualification and competency were more a less same by both Islamic charities. Conversely, in terms of long-term planning, mission and vision, resource planning and advocacy roles were found different in this study. In respect to the composition of the members of the Islamic charities, the election process, working hours, good relationship and good intention were opposite result found in the study. The findings of this research contribute and extend the growing body of research on the governance for not-for-profit organisations by providing empirical evidence and a better understanding of the governance in Islamic charities. This study also provides vital insights to local authorities about the board recruitment process which appears to be similar to other recruitment processes in other organisations but need to be focused on the competencies of the board of trustees and management members.