Accompanying this is the Shariah corporate governance framework which protects the interest of the investor and customer by underscoring need for compliance and ethics as well as maintaining high degree of transparency and disclosures. Before delving into the mechanics of Shariah supervisory framework, it is pertinent to highlight the key challenges faced by Islamic banks with respect to Shariah governance.
These challenges are inter-linked and mutually reinforcing and range from: •  4  Reputational risk arising from lack of or uncertainty on Shariah compliance;  Humayon Dar and John R. Presley: Lack of Profit Loss Sharing in Islamic Banking: Management and Control Imbalances, 2001.