From knowledge to wisdom: the case of corporate governance in Islamic banking

Abstract

Purpose

The purpose of this paper is to define and explore the concepts and relationships between intellectual capital, knowledge, wisdom and corporate responsibility in the context of the corporate governance of Islamic financial institutions.

Design/methodology/approach

This paper presents an adaptation of the Nicholson and Kiel intellectual capital model of the board of directors including the role of the Shari'a Supervisory Board (SSB). It is driven by the following research questions: how does the SSB add value to the corporate governance model of IFIs through their intellectual capital? Is there any value in replicating the IFIs structure in western conventional banks and, if yes, how could it be done without the religious and cultural impacts?

Findings

It was only recently that one entered the knowledge economic era and organizations are slowly realizing the need and the benefits not only of managing knowledge better, but also of managing it in a wiser way. The concepts and values carried by Islamic banking and by social responsible investments have a lot in common and they both tend to bring wisdom to the organization's operations and goals.

Originality/value

This paper explores how the core concepts of Islamic banking governance could be adapted to conventional banking. It shows the need for organizations to continue their knowledge management journey by integrating organizational wisdom with their decisions and actions. Corporate social responsibility is perceived as being a first step to reach organizational wisdom. This paper touches on various critical issues and it is hoped that it will be a source of inspiration for numerous research questions and debates on these topics.

Citation

Nathan, S. and Ribière, V. (2007), "From knowledge to wisdom: the case of corporate governance in Islamic banking", VINE, Vol. 37 No. 4, pp. 471-483. https://doi.org/10.1108/03055720710838533