Disclosure and governance of Islamic banks: A case study of Malaysia

This paper investigates the current state of corporate governance in Malaysia while at the same time it outlines operative aspects of Islamic banking. The low level of enforcement of corporate governance in Malaysia coupled with the high level of trust implicit in certain aspects of Islamic banking appears to be a perfect recipe for disaster. Bankers who are beginning to realise this fact are slowly backing away from this type of Islamic banking. The paper highlights the need for greater disclosure such that patrons of Islamic banking will realise the extent of their risk exposure.