Towards a code of conduct for shariah governance in Turkey

The main objective of this study is to improve the Islamic banking industry in Turkey by designing a proposed code of conduct to control the behavior of Shariah Boards practicing Shariah governance. As Islamic banking is a fast-growing sector in Turkey, the researcher believes that the regulations related to shariah governance are insufficient to keep pace with the growth of the sector. The study focused on shariah governance and analyzed shariah governance frameworks around the world and Turkey in particular to track good and non-good behaviors that were monitored by the study. This study seeks to contribute to building ethical standards within the proposed code of conduct. It is noticeable that shariah governance frameworks vary from one country to another, so it was necessary to identify good behaviors in practice and point out those behaviors that are not described as good. The researcher collected secondary data from participating banks in Turkey, The Association of Participation Banks in Turkey and other academic studies. The study was based on the analyses of international and local standards related to Shariah governance. Moreover, the researcher evaluated the practical practice of shariah governance in Turkey, monitored good behavior and carried out the process of evaluating compliance with shariah governance in Turkey, using the scoring method that was proposed in this study. The final endeavor of this study was to develop a proposed code of conduct by considering the evaluation of participating banks and the extent of compliance with shariah provisions to improve the Islamic banking sector as well as to contribute to the development of ethical standards for Islamic finance about Shariah governance. This study also made proposals to improve the participation banking industry in Turkey, the most important of which was activating the good behaviors stipulated in the regulations and strengthening them with additional good behaviors to maintain their effectiveness and adequacy.