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Integration of Social Responsibility in Financial Communities Ninth Harvard University Forum on Islamic Finance  March 27-28, 2010 ,  Harvard Law School, Austin Hall  Sayd Farook (Dar Istithmaar &  Oxford Centre for Islamic Studies)  Rafi-uddin Shikoh (Dinar Standard)
Framing the discussion ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Responsibility? Least socially responsible amongst nine major global industries.* FINANCIAL INSTITUTIONS… Role & Impact Performance * 2009 BSR (Business for Social Responsibility)/ GlobeScan State of Sustainable Business Poll Gap
Foundational Precepts: Contemporary Business “ There is only one valid definition of business purpose:  to create a customer… It is the customer who determines what a business is...The customer is the foundation of a business and keeps it in existence. He alone gives employment.“ “ there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” “ The great object of the political economy of every country is to increase the riches and power of that country.” Serving customers Maximizing shareholder value Enlightened self-interest
Foundational Precepts: Contemporary Business Foundational drivers & social responsibility? Serving customers Maximizing shareholder value Enlightened self-interest
Foundational Precepts of Islam ,[object Object],[object Object],‘ Taqwa-centricity’  Accountability ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Foundational Precepts of Islam ,[object Object],Educate an Individual in ‘Taqwa ,[object Object],[object Object],[object Object],[object Object]
Foundational Precepts of Islam Educate an Individual in ‘Taqwa ,[object Object],(God consciousness) Human beings as vicegerents on Earth Primary Responsibilities:  Objective of Islamic Laws ‘ Taqwa-centricity’  Accountability ,[object Object],[object Object]
Social Responsibility Mandate for IFIs ,[object Object],[object Object],[object Object],[object Object],Individual Responsibility IFI Responsibility ,[object Object],[object Object],[object Object],[object Object],[object Object],.. ‘ Taqwa-centricity’  Accountability Educate Establish Justice
Conflicting Ideologues within Islamic Finance ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
A framework for IFI Social Responsibility  ,[object Object],Disclosure & Governance as a Means of Accountability Mandatory ,[object Object],[object Object],[object Object],[object Object],[object Object],Operations (employees, vendors, etc) Financial mobilization  Religious  (Form & Substance in all operations) Recommended ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Social Responsibilities
Current Global Practices ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Current IFI Practices ,[object Object],[object Object]
Concluding Thoughts  ,[object Object],[object Object],[object Object],[object Object]

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Integration Of Social Responsibility In Financial Communities

  • 1. Integration of Social Responsibility in Financial Communities Ninth Harvard University Forum on Islamic Finance March 27-28, 2010 , Harvard Law School, Austin Hall Sayd Farook (Dar Istithmaar & Oxford Centre for Islamic Studies) Rafi-uddin Shikoh (Dinar Standard)
  • 2.
  • 3. Foundational Precepts: Contemporary Business “ There is only one valid definition of business purpose: to create a customer… It is the customer who determines what a business is...The customer is the foundation of a business and keeps it in existence. He alone gives employment.“ “ there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” “ The great object of the political economy of every country is to increase the riches and power of that country.” Serving customers Maximizing shareholder value Enlightened self-interest
  • 4. Foundational Precepts: Contemporary Business Foundational drivers & social responsibility? Serving customers Maximizing shareholder value Enlightened self-interest
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Editor's Notes

  1. 2 min Engine for socio-economic growth: job creation, small business growth, investments in healthcare, food services, housing, education, etc. Role in addressing unprecedented level of global challenges: climate change, food shortage, water shortage, and global energy needs Wall-Street led global financial crisis: millions of job losses, foreclosures, and bankruptcies driving families and individuals into deep social crises. Our Discussion: Given chronic global social challenges and the impact financial communities can have, addressing effective social responsibility integration becomes critical. We focus on Islamic Financial Institutions--but also look at other global CSR practices.
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