Shari’ah Governance in Türkiye: Evolution, Challenges, and Conceptual Framework

Abstract

In the aftermath of independence, Islamic nations embarked on an exploration of economic models, leading to the formulation of the New Islamic Economics by the late 1960s. The 1973 oil crisis catalyzed the emergence of affluent Arab nations, paving the way for the establishment of Islamic finance from 1974 onwards. By the 1990s, the rapid expansion of the Islamic finance industry demanded standardization efforts, resulting in the creation of bodies such as the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB). A defining feature of Islamic Financial Institutions (IFIs) is their adherence to Shari’ah governance, ensuring compliance with Islamic principles in conjunction with conventional corporate governance practices. This study examines the historical development and current framework of Shari’ah governance in Türkiye while addressing the challenges and difficulties encountered in its implementation. The findings highlight the need for further refinement in governance practices to align with both Shari’ah principles and the evolving global financial landscape.