ABSTRACT
There is little doubt that the role of the board members and advisors in the Shari'ah Supervisory Board or the Shari'ah Committee, called in general 'Shari'ah board', is inevitable in Islamic finance. The 'displacement commercial risk' makes the banks' policy of portfolio selection 'risk-averse'. The so-called murabaha syndrome is due partly to this structure. The members of the Shari'ah Committee shall be persons of acceptable reputation, character and integrity. Bank Negara Malaysia reserves the right to disqualify any member who fails to meet the requirements. The main responsibility of the National Shari'ah Board is to prepare Shari'ah regulatory support to the Islamic banking and finance industries. Thus, the National Shari'ah Board has an important role in creating public trust and awareness of the Shari'ah compliance matters of the Islamic banking industry. If the Shari'ah advisors are not governed by any specific regulation, as pointed by Bakar, the performance would depend on the morale of the board members.
