Development and validation of a performance measurement system based on Islamic principles
The infamous malfeasance of corporate giants and the collapse of a financial system with global reverberations have further pressured the need for greater ethical discipline and consideration in business and finance. This study explored the motivations within firms as driven by their performance mea...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Elsevier
2023-05-01
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| Series: | Heliyon |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2405844023033029 |
| _version_ | 1797815575289790464 |
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| author | Noor Leena Haniffah Mohammed Sharaf Shaiban Pervaiz Ahmed |
| author_facet | Noor Leena Haniffah Mohammed Sharaf Shaiban Pervaiz Ahmed |
| author_sort | Noor Leena Haniffah |
| collection | DOAJ |
| description | The infamous malfeasance of corporate giants and the collapse of a financial system with global reverberations have further pressured the need for greater ethical discipline and consideration in business and finance. This study explored the motivations within firms as driven by their performance measurement systems (P.M.). Then, the study developed a newly proposed P.M.S. with greater ethical emphasis based on Islamic principles to be a foundation for augmented Sharia-compliant screening criteria for Islamic equities. Discourse analysis of the Islamic religious texts was used, followed by validation through interviews with scholars and practitioners. Results indicate that improving the current Sharia screening criteria is possible by expanding the qualitative and quantitative assessments to include indicators that consider shareholders, the board of directors and top management, business dealings and products, employee relations, community issues and environmental protection. This study has implications for regulators such as Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Islamic Financial Services Board (IFSB) and Sharia-compliant screening criteria users such as the Dow Jones Islamic Market (DJIM), Financial Times Stock Exchange (FTSE) and Standard and Poor's (S&P) that may consider expanding their current equity screening criteria which mainly depends on the issuer's business activity and narrow quantitative measures. This version: June 28, 2022. |
| first_indexed | 2024-03-13T08:24:53Z |
| format | Article |
| id | doaj.art-6f3001c9c19844b6af4bc043e62902d8 |
| institution | Directory Open Access Journal |
| issn | 2405-8440 |
| language | English |
| last_indexed | 2024-03-13T08:24:53Z |
| publishDate | 2023-05-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Heliyon |
| spelling | doaj.art-6f3001c9c19844b6af4bc043e62902d82023-05-31T04:46:37ZengElsevierHeliyon2405-84402023-05-0195e16095Development and validation of a performance measurement system based on Islamic principlesNoor Leena Haniffah0Mohammed Sharaf Shaiban1Pervaiz Ahmed2Monash University Malaysia, MalaysiaMonash University Malaysia, MalaysiaCorresponding author.; Monash University Malaysia, MalaysiaThe infamous malfeasance of corporate giants and the collapse of a financial system with global reverberations have further pressured the need for greater ethical discipline and consideration in business and finance. This study explored the motivations within firms as driven by their performance measurement systems (P.M.). Then, the study developed a newly proposed P.M.S. with greater ethical emphasis based on Islamic principles to be a foundation for augmented Sharia-compliant screening criteria for Islamic equities. Discourse analysis of the Islamic religious texts was used, followed by validation through interviews with scholars and practitioners. Results indicate that improving the current Sharia screening criteria is possible by expanding the qualitative and quantitative assessments to include indicators that consider shareholders, the board of directors and top management, business dealings and products, employee relations, community issues and environmental protection. This study has implications for regulators such as Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Islamic Financial Services Board (IFSB) and Sharia-compliant screening criteria users such as the Dow Jones Islamic Market (DJIM), Financial Times Stock Exchange (FTSE) and Standard and Poor's (S&P) that may consider expanding their current equity screening criteria which mainly depends on the issuer's business activity and narrow quantitative measures. This version: June 28, 2022.http://www.sciencedirect.com/science/article/pii/S2405844023033029Performance measurement systemReligionIslamSharia-compliant firmsEthical finance |
| spellingShingle | Noor Leena Haniffah Mohammed Sharaf Shaiban Pervaiz Ahmed Development and validation of a performance measurement system based on Islamic principles Heliyon Performance measurement system Religion Islam Sharia-compliant firms Ethical finance |
| title | Development and validation of a performance measurement system based on Islamic principles |
| title_full | Development and validation of a performance measurement system based on Islamic principles |
| title_fullStr | Development and validation of a performance measurement system based on Islamic principles |
| title_full_unstemmed | Development and validation of a performance measurement system based on Islamic principles |
| title_short | Development and validation of a performance measurement system based on Islamic principles |
| title_sort | development and validation of a performance measurement system based on islamic principles |
| topic | Performance measurement system Religion Islam Sharia-compliant firms Ethical finance |
| url | http://www.sciencedirect.com/science/article/pii/S2405844023033029 |
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