Shariah Board Setup and Management
Establish a credible Shariah Supervisory Board for your Islamic financial institution. Scholar identification. Vetting. Contract negotiation. Secretariat support.
Establish a Credible Shariah Supervisory Board
A Shariah Supervisory Board or SSB is essential for any Islamic financial institution. The SSB provides fatwas on whether new products are permissible. The SSB approves the institution governance framework. The SSB monitors ongoing compliance. The SSB gives confidence to customers and regulators. Without a credible SSB, your customers will not trust that your products are truly Islamic. Regulators may not license your institution.
But finding qualified Shariah scholars is not easy. There are only a few hundred scholars worldwide with the combination of Islamic law training and financial expertise. Most are already serving on multiple boards. Some are in high demand and can pick and choose their clients. How do you find them? How do you vet them? How do you negotiate their contracts? How do you manage them once they are on your board?
Our Shariah Board Setup service answers these questions. We help you identify qualified scholars based on your jurisdiction, your products, and your preferred school of thought. We vet their qualifications. We check their reputation. We facilitate interviews between scholars and your management. We help negotiate contracts. We provide a board charter and meeting protocols. We can also provide ongoing secretariat support for board meetings.
Do not leave your Shariah board to chance. Let us help you build a board that is both credible and cost effective.
What's Included
Scholar Identification
Based on your profile we identify potential Shariah scholars. We consider your jurisdiction. Scholars who are recognized in Malaysia may not be recognized in the UAE. We consider your products. A scholar who specializes in Takaful may not be suitable for a bank. We consider your preferred school of thought. Hanafi, Shafii, Maliki, or Hanbali. We consider your budget. Senior scholars charge more than junior scholars. We provide a shortlist of three to five qualified candidates. Each candidate profile includes their qualifications, their experience, their current board seats, and their estimated fee.
Terms of Reference
We provide a board charter that defines the roles and responsibilities of your Shariah board. The charter covers board composition, appointment and removal procedures, meeting frequency, quorum requirements, decision making processes, reporting lines, and conflict of interest rules. The charter also defines the relationship between the board and management. The board approves products and policies. Management implements them. The charter makes this clear. The charter is reviewed and approved by your board of directors and your Shariah board.
Scholar Vetting
We vet each candidate before presenting them to you. We verify their academic credentials. Do they really have a degree from Al Azhar? We verify their professional experience. Have they actually served on other Shariah boards? We check their reputation. Do other banks speak well of them? Do any public controversies surround them? We check their conflicts of interest. Are they already serving on competitor boards? Are they also advising product vendors that you use? We provide a vetting report for each candidate. You see everything we found. There are no surprises after you appoint them.
Contract Facilitation
Once you select a candidate, we help negotiate the contract. The contract covers the scholar fees, the scope of work, the meeting schedule, the termination conditions, and the liability provisions. We have standard contract templates that we have used with dozens of scholars. We know what market rates are. We will help you negotiate a fair fee. We do not mark up the scholar fee. The scholar gets paid directly by you. We are not in the middle. We simply facilitate the negotiation.
Meeting Protocols
We provide meeting protocols for your Shariah board. The protocols cover how meetings are scheduled, how documents are distributed before the meeting, how minutes are recorded, how decisions are documented, and how fatwas are issued. We also provide templates for meeting agendas, meeting minutes, fatwa requests, and fatwas. The protocols ensure that your board operates professionally and that your documentation is audit ready. Regulators will review your board minutes. Make sure they are complete and clear.
Secretariat Support
We can serve as your Shariah board secretariat. The secretariat handles all administrative tasks. Scheduling meetings. Distributing documents. Recording minutes. Tracking action items. Preparing fatwa drafts for board review. Maintaining the fatwa library. Coordinating with management. The secretariat allows your board to focus on Shariah decisions rather than paperwork. Our secretariat service is available on a monthly retainer basis. We can also train your internal staff to serve as secretariat. You choose what works for you.
How It Works
Needs Analysis
We meet with your management and your board of directors. We understand your institution. What jurisdiction are you in? What products do you offer? What is your preferred school of thought? What is your budget for Shariah scholars? How many scholars do you need? We provide a candidate profile and a fixed price quote.
Candidate Shortlist
Based on the needs analysis, we identify qualified candidates. We contact each candidate to confirm availability and interest. We vet each candidate. We prepare candidate profiles. We provide a shortlist of three to five candidates within three to four weeks.
Interviews
We arrange interviews between your management and the shortlisted candidates. Interviews can be conducted in person if the candidate is in Hong Kong or via video call if they are abroad. We attend the interviews to facilitate. We help you ask the right questions. We provide feedback after each interview. You select the candidate or candidates you want to appoint.
Contract Negotiation
Once you select a candidate, we help negotiate the contract. We provide a standard contract template. We advise on market fee rates. We facilitate communication between your legal team and the candidate. We help resolve any disagreements. We aim to have a signed contract within two to three weeks.
Board Launch
After contracts are signed, we help you launch the board. We provide the board charter and meeting protocols. We help you schedule the first board meeting. We help you prepare the agenda and materials. We attend the first meeting to facilitate. We help you document the meeting minutes and any fatwas issued.
Ongoing Support
After the board is launched, we offer ongoing secretariat support. We can also provide annual board effectiveness reviews. We can help you recruit additional scholars if your board needs to expand. We are your long term partner for Shariah governance.
Frequently Asked Questions
AAOIFI recommends at least three scholars on a Shariah board. This ensures diversity of opinion and reduces the risk of one scholar making an error. Three scholars can cross check each other. However for smaller institutions, a board of three scholars may be expensive. Some regulators accept two scholars or one scholar plus advisors. The Hong Kong Monetary Authority expects at least three scholars for licensed banks. For non bank financial institutions, two scholars may be acceptable. For a startup or a very small institution, you could start with one scholar and add more as you grow. You need to balance credibility and cost. We can advise you based on your specific situation and your regulator expectations.
A qualified Shariah scholar should have formal training in Islamic law from a recognized institution. Al Azhar University in Egypt. Islamic University of Medina in Saudi Arabia. International Islamic University Malaysia. University of Sharjah in UAE. The scholar should have studied usul al fiqh which is the methodology of deriving rulings. The scholar should have studied fiqh al muamalat which is Islamic commercial law specifically. The scholar should have experience in Islamic finance. Some scholars have academic backgrounds and have published research. Others have practical backgrounds and have served on Shariah boards for banks. The best scholars have both. They understand the theory and they understand how banks actually operate. A scholar who only knows Islamic law but does not understand modern finance will give rulings that are impractical. A scholar who only knows finance but does not understand Islamic law will miss nuanced Shariah issues. We look for both.
Shariah scholar fees vary widely based on the scholar seniority, jurisdiction, and scope of work. Junior scholars with less experience may charge USD 5,000 to USD 10,000 per year. Mid level scholars with five to ten years of experience may charge USD 15,000 to USD 25,000 per year. Senior scholars with international reputations may charge USD 30,000 to USD 60,000 per year or more. The fee typically covers four board meetings per year, fatwa requests, and ongoing email consultation. Some scholars charge hourly rates for additional work. Some charge per fatwa. Our role is to help you negotiate a fair fee. We do not mark up scholar fees. The scholar is paid directly by you. We only charge for our advisory services. We will tell you what market rates are in your jurisdiction. You decide what you want to pay.
Yes scholars can be from different countries. In fact having scholars from different countries can be beneficial. A scholar from Malaysia may bring expertise in Sukuk. A scholar from the UAE may bring expertise in Takaful. A scholar from Saudi Arabia may bring expertise in the Hanbali school. However having scholars from different countries also creates challenges. Time zone differences can make scheduling meetings difficult. Language differences may require translation. Different Shariah standards may lead to disagreements. The scholars may not know each other or trust each other. We can help you manage these challenges. We schedule meetings at times that work for all time zones. We provide translation if needed. We facilitate consensus building among scholars. If the challenges seem too great, we recommend appointing scholars from the same country or region.
Yes we provide secretariat support as an optional service. The secretariat handles all administrative tasks for your Shariah board. We schedule board meetings. We distribute meeting materials. We record meeting minutes. We track action items. We maintain the fatwa library. We coordinate between the board and management. We ensure that your board operates professionally and that your documentation is audit ready. Our secretariat service is available on a monthly retainer basis. The retainer depends on the amount of work. For a typical board with three scholars meeting quarterly, the retainer is HKD 3,000 to HKD 5,000 per month. For a more active board meeting monthly, the retainer is higher. We can also train your internal staff to serve as secretariat. This is cheaper in the long run but requires your staff to learn Shariah governance processes. We offer both options.
Our fee for Shariah board setup depends on the scope of work. For a basic setup where we identify candidates and provide the board charter, our fee is typically HKD 15,000 to HKD 30,000. For a full setup including candidate identification, vetting, interview facilitation, contract negotiation, board charter, meeting protocols, and first meeting facilitation, our fee is typically HKD 40,000 to HKD 60,000. If you need us to also recruit multiple scholars for different jurisdictions, the fee is higher. We provide a fixed price quote before you engage us. You know exactly what you will pay. The scholar fees are separate and are paid directly to the scholars. We do not mark up scholar fees.