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Abdur Rashid Mirza

University of Lahore

School of Accountancy & Finance Subject Name: Corporate Governance Transparency and Risk

Management Lecture no.05

Corporate Social Responsibility

in Islamic Perspective

Definition of Corporate Social Responsibility

Corporate Social Responsibility is the

continuing commitment by business to

behave Ethically and contribute to

economic development while improving

the quality of life of the workforce and

their families as well as local

community and society at large.

Definition of Social Responsibility

In Islam, however, SR in generally not

CSR has voluntary characteristics like

sadaqat (Charity), Awqaf that are

encouraged not compulsory and others

that are compulsory like the

implementation of Zakat and the

prohibition of Riba (interest) that are

enforce and need to be done.

Definition of Coporate Social Responsibility

The Philosophy of Islamic business as

protected by the Shariah requires Islamic Banks

to operate in morally, ethically and socially

responsible manner i.e. confirming to the

Islamic standards of business and economic

activities. Thus the concepts of CSR is a natural

commitment of Islamic institution particularly

Islamic banks whose objective are directed

towards making brotherhood, social

equality and equitable distribution a reality

a Muslim society.

The principle Mankind is the representative of Allah

Individual will be the accountable of Allah

Principle of enjoying good and forbidding evil

Prophet Said “Every Muslim must pay Sadaqat (Charity)”.

Faith based ethos of Isalmic Finance

Not only wealth creation and economic development but

also to promotion of social justice.

Participation fight against Illiteracy and poverty in society.

Participation in the protection of the environment.

Major Foundational Principals for Islamic Principles for Islamic SR into following three

Screening clients

Responsible earning with client

Employee Welfare

Qard Hasna

Social Development

Chairtable Activities

Zakah

Customer Service

AAOIFI Standard no.07 Corporate Social Responsibility

Accounting and Audit Organization for Islamic Finance Institutions

If applied correctly and fully, is more comprehensive than CSR, as it protects all the parties of the contracts and

financial transactions and prevents the causes of injustice, exploitation, domination.

Conclusion Islamic Social Responsibility (ISR)

Thank you