In the context of the banking industry, corporate governance involves the manner in which the business and the affairs of the individual banking institutions are being governed by their board of directors and senior management, how the economic returns are generated to the owners, the day-to-day running of the operations of the business and the consideration of the interests of recognised stakeholders including depositors; and how they behave in a safe and sound manner, in compliance with applicable laws and regulations. In this context, the transparency in the conduct of banking institutions, facilitated by the proper accounting standards that reflect the true and fair value of banking operations would lead to greater accountability and responsibility of the part of the bank’s management. Islam strongly advocates all forms of positive governance. These values and ethical conduct have already been in built and inherent in the Muslim community. Islamic corporate governance serves through its underlying principles of economic well-being of the Ummah, universal brotherhood, justice and equitable distribution of income. Therefore, while the virtues of Islam have always advocated corporate governance, the challenge to us lies in its application. For Islamic banking institutions, good corporate governance should have already been embedded in all aspects of their operations. The issue of corporate governance is therefore not foreign to Islamic banking. In Malaysia, the principles of corporate governance have been well documented and applied across all business entities, particularly public listed companies.
There are some very good arguments for that. II. Economy  The best argument lies in the Estonian economy. Regardless of the lingering global uncertainties, economic growth in Estonia has been strong - 5.8% in 2002. That means a growth figure approximately 4% higher than that of the euro area. It could even be said that during the last two years Estonian economy has had to face something akin to a positive external shock as the EU membership became more and more of a certainty and the risk margins correspondingly lower. And there was also a parallel negative economic shock - the continuing weakness of external markets. All that has meant certain advantages - for instance, lower interest rates and significant inflows of foreign direct investment, but there are also certain risks involved. Estonia's high economic growth of the last year and a half is mainly based on high domestic demand. High domestic demand, a continuously strong inflow of foreign investments and a lower than expected export growth have resulted in a significantly high current account deficit - an estimated 14% or more of the GDP by end-2003. Of course, it could be argued that the present external imbalance is, to a certain extent, 'an attendant phenomenon of success'. FDI inflows having been strong through the entire transition period, reinvested earnings and dividend payments have become increasingly important among the factors determining the current account balance in Estonia.