Dual Responsibilities , Shariah and Corporate Social Responsibility in islam

1. Dual Responsibilities, Shariah and Corporate Social Responsibility in islam Sartini Wardiwiyono PhD Student, Financial Ethics and Governance Research Group University of Huddersfield, UK Full Time Lecturer (on study leave), Department of Accounting Ahmad Dahlan University, Yogyakarta Indonesia

2. Presentation Outline • Introduction • Islam as a Way of Life • Tawhid and the Dual Responsibilities • Shariah: its Commandmentsand its Objectives • CSR from Islamic Perspective • Conclusion

3. Islam is not only a religion. • Man in Islam has dual responsibilities. • Islam has its own system of ethics, values and principles as complete guideline (shariah). • Shariah must be implemented in every aspect of Muslim life in order to achieve the well being of mankind Introduction • Islam is not only a religion. • Man in Islam has dual responsibilities. • Islam has its own system of ethics, values and principles as complete guideline (shariah). • Shariah must be implemented in every aspect of Muslim life in order to achieve the well being of mankind.

4. Islam as A way of life

5. Tawhid and dual responsibilities (1) • The concept of Oneness of God • The only Creator • The only one to be worshipped • Unity of God’s Names and Attributes • The concept of tawhid signifies that human being has two types of relationship in their entire life: • Trancedental relationship (relationship with God) • Horizontal relationship (relationship with other felow human being as well as other creatures)

6. Tawhid and dual responsibilities (2) • Individually and collectively, human being has two roles, which are as: • Servant of God • To obey God’s command and to avoid God’s prohibition. • Vicegerent (representative of God/leader of the earth/ khalifah) • To safeguard the right of his fellow human being • To take part in maintaining the harmony and the peace in the community • To take part in protecting the environment • Human being is accountable to God for all their actions in playing their roles.

7. Shariah: its Commandments and its objectives (1) • Shariah provide guidelines on how mankinds must fulfill their responsibilities through Islamic legal and moral rulings. • It is derived from the four Islamic sources: • Primary: Al Qur’an and Hadits • Secondary: Ijma’ (Islamic scholars concencus) and Qiyas (solving emerging issues by finding their analogy in the first three sources ).

8. Shariah: its Commandments and its objectives (2) • Shariah provides five commandments (ahkam) in order or importance and prioritization. • They are used as guidance for human being in taking actions and activities. • The five commandments: • Obligatory (wajib) • Recommended (mandoob) • Permisible (mubah) • Dislike (makrooh) • Prohibited (haram)

9. Shariah: its Commandments and its objectives (3) • The ultimate objective of shariah is to promote the well being of mankind (falah). • The objectives of shariah could be further divided into three different categories in a descending order of importance: • Essential objectives (R, L, I, O, W) • Complementary objectives • Embellishment objectives

10. Shariah: its Commandments and its objectives (4) • Essential objectives • Protecting the five basic human foundations (needs) consist of religion, life, intellect, offspring and wealth. • The failure in achieving these objectives may lead to the disruption of life normal order or disruption of human being in living with safety and dignity. • Obligatory.

11. Shariah: its Commandments and its objectives (5) • Complementary objectives • Accomplishment would supplement the achievement of the essential goals. • The negligence would lead to hardship that do not pose a threat to the well being of mankind. • Recommended.

12. Shariah: its Commandments and its objectives (6) • Embellishment objectives • Accomplishment would lead to refinement and perfection in life. • The negligence might not interrupt the well being of mankind but it might lead to the lack of comfort in life. • Desired.

13. CSR from islamic perspective (1) • CSR is a moral and religious initiative based on the belief that a companyshould be “good” regardless of its financial consequences, be it positive or negative (Dusuki, 2008). • Major principles of CSR in Islam (Farook, 2007; Mohammad, 2007; Kamali, 2009): • Vicegerency (QS. Al Baqoroh: 30) • Divine accountability (QS. An Nisa: 86) • Enjoining good and forbidding evil (QS. At Tawba: 71; Ali Imron: 110). • Trusteeship,brotherhood,justice. • Prioritized to the closest parties followed by least close and community (QS. Al Baqarah: 177).

14. CSR from islamic perspective (2) Less Prioritized Desired Optional permissible Recommended Perform recommended Avoid dislike RequiredPerform obligatory Avoid prohibited Most Prioritized How the responsibilities should be addressed?

15. CSR from islamic perspective (3)

16. Conclusion • CSR in Islam is a moral and religious initiative based on the belief that a companyshould be “good” regardless of its financial consequences, be it positive or negative. • It is not only about giving charity. • The concept of tawhid provide philosophical foundation forcarrying the responsibilities, whereas shariah provide the practical guidelines. • The concept of CSR is an innate features of the very basic foundations in Islam, however, currently it has not been synthesized and formalized yet.