Dr. Maqbouleh Hammoudeh Amman – Jordan June 12-13, 2011

1. Dr. Maqbouleh HammoudehAmman – JordanJune 12-13, 2011 Governance , Corporate Social Responsibility,and Sustainable Development:An Islamic Perspective Presented by The CGR Forum is an ongoing engagement from Schema, your Sustainability Partner

2. Definitions: Sustainable Development: “The most beloved actions by God are the sustainable ones, no matter how small it was,” Prophet Mohammad (PUH) ” أحب الأعمال الى الله أدومها ، وإن قلت ” الرسول صلى الله عليه وسلم Sustainable Development: “It is about ensuring a better quality of life for everyone , now and for generations to come.” Dept. of Environment , UK . 1999

3. Definitions: Corporate Social Responsibility (CSR): “ Every one of you is a leader and is responsible for his subordinates” Prophet Mohammad. (PUH). ” كلكم راع وكلكم مسؤول عن رعيته ” الرسول صلى الله عليه وسلم

4. Definitions: Quality : ITQAN , to do the best, in everything we do. “ Allah Loves to see one’s job done at the level of Itqan.” Prophet Mohammad (PUH) ”إن الله يحب إذا عمل أحدكم عملا أن يتقنه ” الرسول صلى الله عليه وسلم Corporate Social Responsibility ( CSR ): “ CSR means open and transparent business practices that are based on ethical values and respect for employees , communities, and environment. It is designed to deliver sustainable value to society at large, as well as the shareholders.” IBLF, 2005

5. Cont.. (WBCSD 1998) identified CSR as follows:“ Continuing commitment by business to behave ethically and thus contributing to economic development while improving the quality of life , of the workforce,and their families as well as of the local community and Society at large.” That means: CSR CS Quality of Life

6. Governance Governance means regulations and monitoring to guarantee good corporations management to look after the stakeholders interests . It limits the incorrect attitudes and behaviours of the executive managers , and gives the board members an effective role. This definition is aligned with the original Islamic perspective, not modern expression . Preserving and protecting capitals is one of the five pillars in Islam. All the Islamic Regulation organized the Relationships between Corporations’ management and all shareholders.

7. Governance Globalization Outputs: • changes for Share Holder • Open Global Financial Markets • Executive managers control over the company to serve their • High Competition between companies • Bankruptcy of big companies • Corruption

8. Governance • Organization of Economic Co-operation and Development ( OECD) put an integrated structure for Governance system in 1999. • It is accepted by most of governments and Business sectors , and investments , or financial markets. This Governance system covers: a. Shareholders b. Board members and managers c. People with interest ( Clients, Suppliers, banks , depts.) d. Company’s Community

9. Governance How each party will have his rights and give his commitments ? From an Islamic Perspective : We go to the Value System Justice Justice is the basic Value. It is an ultimate Value for any society , organization , and Life in General

10. Governance / Justice All our relationships and corporate systems should be governed by Justice. With Justice in Human Resources Systems implementation , we will have the employees’ satisfaction.

11. Governance / Justice WithJustice Value ,we can implement the law in public servants asking them :” From where did they make such fortunes or asking them about their illegal earnings were achieved by forbidding illegal earning in Islam.

12. Governance Justice / cont… ((O ye who believe! stand out firmly for justice, as witnesses to Allah )) Women / 135 ” يا أيها الذين آمنوا كونوا قوامين بالقسط ، شهداء لله ” 135 / النساء ((Whenever ye speak, speak justly )) Alanam/Cattle 152 وإذا قلتم فاعدلوا ” 152 / الأنعام 3. ((O ye who believe! fulfill (all) obligations)) Table 1 ” يا أيها الذين آمنوا أوفوا بالعقود ” 1 / المائدة

13. 2. Responsibility : For each party : From an Islamic perspective it is honesty and trust. Responsibility , is not only in front of party , but it is in front of God . ALTAQWA: It Means It is a Life and Work Address in the corporations. Each employee should behave with himself, his supervisors, his subordinates, his instruments, tools and the owners realizing faith of God to be as standard of behavior. So we should behave with self control not police control, and self responsibility

14. 3. Accountability : For each responsible for his commitments. It is a Reward system for each positive and negative actions . Will a just Judicial system in each country.

15. 4 Transparency Honesty, trust, and accuracy of information about the company for all parties , that can’t directly supervise their interest in the company. These are 4 important Islamic Values that should used in any Governance system

16. Corporate Dimensions Towards Sustainability: Governance , Corporate Social Responsibility and Corporate Sustainability Quality Governance VALUES Corporate Social Responsibility Corporate Sustainability

17. CSR from an Islamic Perspective First: Social Dimension: 1-The importance of work in the society is such as worship.) “Never any body has eaten a food better than that which earned by his hand.” Prophet Mohammad (PUH) Islam does not see it sufficient to work: for worldly gain, it adds to it the touch of the worship and devotion to God. Also the management should give the employees all their rights to meet their objectives.

18. Human Resources Development: Selection: based on strength and honesty. (Quran Ref.) Recruitment: permanent employment, contractual appointment Pyramidal structuring and gradation scale: I. theory confirms that variation in employment does not necessarily mean social variation and does not touch the spirit of social equality. Promotion: based on faith and knowledge. (Quran Ref.) Wages and salaries: based on justice Incentives: focused on satisfaction, not fulfillment, and grouping motivations, in addition to individual motivations

19. Al Zakat .. Al Zakatas a specified payable right in money or wealth that meats certain conditions . It is a major pillar in Islam, It is a wide bridge on which both the rich and the poor stand in harmony and full respect of each other.

20. Charities: In addition to AL Zakat, Islam has made provisions for a number of desirable charities as a means of social responsibility. The legislation of these charities gives an opportunity to the rich to help the poor , the indigent, the petitioners, the refugees, the homeless and the wayfarers without restricting assistance to the particular time or amount.

21. Al Wakf : The most that Islam made it followers want to do, is the continuous virtue ( meaning that which continuous after one’s death, which is clear in the frozen assets for good virtues, wakf). It shows the care hood in the Islamic society and shows the nobleness of the giver, and the true noble feelings in the Islamic Nation. Al Wakf and Sustainability: "If the son of Adam dies, his work was lost except three: ongoing charity, beneficial knowledge or a righteous son who calls him “Prophet Mohammad PUH ” إذا مات ابن آدم ، انقطع عمله الا من ثلاث : صدقة جارية ، أو علم ينتفع به ، أو ولد صالح يدعو له ” الرسول صلى الله عليه وسلم . )والصدقة الجارية محمولة على الوقف عند العلماء (

22. Second : Economic Dimension: Islam encourages the Investment of one fortune in order to increase it in a legal manner, and forbids them to freeze or delay its investment.

23. Third : Environmental Dimension SR means Conserve Environment “ Clearing the Roads of Hazards is Charity” Prophet Mohammad ( PUH) Naturedly: “ Leave birds sitting in their eggs” Prophet Mohammad ( PUH) Natural Resources such as water resource, it is the most vital element, “ We made from water every living” thing”sura Alanbeia,30. And Conservation is a fixed concept in Islam “ Eat and Drink but waste not by excess for Allah loveths not wasters.” Al-Araf ,31

24. How to build Your Corporate SustainabilityAbe, Joseph. and others 1998, Business Ecology 1- Create A Value Based Organisation: Build Your Social DNA ( Vision, Mission, Values and Core Value). 2-Adapt and Thrive: Applying Business Approach Systematically: (Create a Learning Organisation, Strategically Positioned with Vision, Foresight, Self Knowledge and System Thinking). 3- Use a New Language for Success: (A sustainable organisational success is defined by how efficiently it uses life sustaining flows, time ,and space of optimize value for stakeholders. It is value creation and its success, is measured by the extent to which quality of life genuinely improved.)

25. Cont… 4- Develop Vital Flows and Relationships: (It helps the O.D. from “Cash Flow” to “Life Flow” and from “Accountability to Shareholders” to “Accountability to stakeholders”. 5- Merge Art and Science: (It incorporate the ability to see patterns ,(Artist point of view) systemic relationship, different perspectives, and express creative imagination. (Science)It draws conclusions , creates models for organistion based on natural system)

26. Cont… 6- Learn From Natural System: (Emulate natural systems design , organization's core genetic code such as core purpose and values, life cycle thinking, resource exchange relationships, and models for organizational design that encourage innovation, resiliency, and adaptability). 7- Put Community Back in Business: (Community lies at the heart of healthy life –sustaining organization, it is the essence of our spiritual well-being. We have to build community in our organization by identifying and committing to core values, and the profits will follow).

27. Corporate Sustainability Based on Islam (Comparison)

31. Conclusion Governance and CSR Lead to Sustainability Social DNA Means Org. ID ( Values and Core Value) TAQWA, JUSTICE , RESPONSIBILITY , CO-OPERATION CSR is a mandatory work for all people in all Dimensions : Social, Economic, and Environment. To have quality of life, focus on prophet Mohammad (PUH) saying : ”Allah loves to see one’s job done at the level of Itqan”

32. Thank You شكرا لكم والسلام عليكم