Islamic corporate governance serves through its underlying principles of economic well-being of the Ummah, universal brotherhood, justice, accountabilities and equitable distribution of income. Therefore, while the virtues of Islam have always advocated good 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. Closely linked to the corporate governance issue is the role of market discipline. Central to the effectiveness of the corporate governance arrangements is the empowerment of shareholders. This would mean providing the conditions under which shareholders have both the incentive and the means to act to discipline Management. The market for corporate control is an important way in which shareholders exercise, in effect, an ultimate discipline over bank Management on the premise of allocating capital where sound management is practised. Third, greater transparency and disclosure of information Transparency and disclosure is essential particularly in a rapidly changing environment. While the comprehensive and timely availability of financial information will increase market discipline, the disclosure of information needs to be complemented with the ability of the market players to analyse, and appropriately interpret the information. Closely related to this issue is the need to strengthen the framework for consumer protection to provide an avenue for redress due to lack of transparency.
We cannot afford over the long run a new “whatever it costs” phase if we want to preserve our capacity to invest in decarbonation and energy sovereignty in the future and not to overload future generations. To put it clearly, as a benchmark, the public share in the distribution of the cumulative burden in 2022 and the following years should not exceed current levels and reverse towards zero within let’s say two to three years. The remaining share of the burden should be distributed fairly between firms and households according to their energy consumption shares. It seems logical that a more significant share falls on firms since they are the largest ex ante consumers of energy. But the issue remains of the distribution of the burden between in particular the energy companies on the one hand and the other sectors on the other, starting with the most energy dependent. Households cannot be completely and permanently exempted from their share in this distribution. This is not easy to say, and even less easy to do; and it is essential to address the difficulties of the most disadvantaged, in particular households in rural areas who consume relatively more energy. So we need to quickly better target those who need it most. And we need to gradually but steadily reduce general support schemes which we cannot afford and do not give the right incentives over the long, or even medium, term.