Mushtak Parker Saudi Gazette LONDON – Tun Musa Hitam, former deputy prime minister of Malaysia and Chairman of the Jury Panel of the Royal Award for Islamic Finance, has called for a more concerted effort and collaboration between governments, agencies, regulators, standard setting bodies and other financial institutions in knowledge sharing to help enhance the global credibility and competitiveness of Islamic finance. In an exclusive interview with Saudi Gazette, Tun Musa Hitam talked at length about the Royal Award for Islamic Finance, which will be handed later this month to its latest recipient. The Malaysian King, Tuanku Abdul Halim, the Sultan of Kedah State, will present the award at a Gala Dinner in Kuala Lumpur during the Global Islamic Finance Forum (GIFF 2012), which is organized by Bank Negara Malaysia (BNM), the central bank, and the Securities Commission Malaysia (SC), the securities regulator. The biennial award was inaugurated in 2010 and the first winner of the Royal Award was Saudi entrepreneur and a pioneer of the contemporary Islamic finance industry, Sheikh Saleh Kamel, the head of the Dallah Albaraka Group. The idea and concept for a prestigious Islamic Finance Award arose from Malaysia's efforts to develop Islamic finance internationally. The difference between The Royal Award and the motley of commercially-driven awards supposedly “serving” the Islamic finance industry is that the former is a non-commercial award spearheaded by BNM and the SC in support of the Malaysia International Islamic Financial Centre (MIFC) initiative.
Awards have been controversial in the Islamic finance industry, partly because of poor transparency in the nomination and selection process and partly because of the allegations that individuals and institutions were paying in the form of advertising and buying tables at the Award Gala Dinner with the knowledge that they would be award recipients. Indeed the correlation between conference and award sponsors and recipients is uncanny. The Jury panel for the 2012 Royal Award is chaired by Tun Musa Hitam, former Deputy Prime Minister of Malaysia and Chairman of the World Islamic Economic Forum, and includes prominent Saudi Shariah scholar and economist Dr Muhammed Elgari and other prominent figures that have served the Islamic finance industry per se. Tun Musa Hitam, gave a valuable insight into the rationale and deliberations of the Royal Award and its nomination and selection processes and deliberations. “There has been, as you are aware,” he said, “many negative comments on commercial awards. In many instances it could be perceived as not having given true recognition to services rendered to the industry. Being a ‘non-commercial' award is perhaps one of the most important criteria in ensuring that The Royal Award receives due acceptance and respect from the Islamic financial community. Aside from the Royal Seal of Approval, the award recipient is selected by an independent seven-member jury, comprising eminent individuals, Shariah scholars, academicians and Islamic finance practitioners from Asia, Europe, the Middle East and the United States. With this framework, The Royal Award is well regarded as a global benchmark in identifying exceptional individuals who have shaped and facilitated the growth of the global Islamic financial marketplace. The Award thus will not be influenced by sponsorships or purchase of advertising spaces.” The criteria for the Award, according to Tun Musa, are based on recognizing excellence in Islamic finance, in relation to significant contribution, innovation and breakthrough, acceptability, acknowledgement, adoption and inspiration as well as influence (local, regional and global). There is one recognized Islamic finance market player on the Steering Committee but none on the Jury panel. A point which Tun Musa Hitam is too aware of. “I take note of your comments and will recommend further strengthening of the composition of the Jury panel for the forthcoming term of appointment. The term of service of this Jury Panel, as you are aware, ends with this Award. We serve for only two Award terms,” he explained. True the composition of the Jury panel is diverse. Most of the members are involved in contemporary Islamic finance, either in the field of capacity building, human capital development, Shariah advisory, lawmakers, as well as product experts. All of them have been involved in the development of Islamic finance since the early 1980s. The reputation and quality of any award depends on its nomination and selection criteria and methodology. In addition, the contemporary Islamic finance industry is now only in its 4th decade, which is very nascent. As such, the industry is not exactly blessed with a surfeit of possible candidates. This year The Royal Award received 32 nominations, comprising influential contributors and drivers of the Islamic finance industry with diverse backgrounds, coming from various regions around the world namely the Middle East, Europe, Africa, North America and the Asia Pacific region, comprising both Muslims and non-Muslims. “This,” emphasized Tun Musa Hitam, “reflects the global reach and acceptance of Islamic finance today. Our selection process is very robust and rigorous. There is an independent international seven-member jury. It is a challenge to review all the respected nominees, be they academicians, specialists or market practitioners. Thanks to my Jury panel members however, we have developed a methodology that enables us to recognise the special skills and strength of the candidates and determine the best among the nominations that we have received. There are many such prominent names that have been brought before us and all hold outstanding service and track records. The short-listing process has been very stringent and thorough; third party confirmation of records, fit and proper tests and many other quantitative analyses are among examples of the processes that are implemented.” Tun Musa agreed that the selection process is indeed difficult. The criteria cover both qualitative and quantitative aspects that assess the candidates' exceptional contribution and reach in global Islamic Finance. These include financial innovation and pioneering work, exceptional leadership, adoption and acknowledgement of their contributions within the industry and inspiration and influence towards future progress and development. “I am glad to say that a majority of the submissions are within the parameters that we have set. They are prominent individuals within the fields that they represent. They, the ones that not only fall within the objectives and criteria but are influential as well, obviously are the ones whom we have shortlisted,” he added. But what measures are in place to ensure that nominations are not rigged or pre-planned by some of those seeking nominations and that the appropriate corporate governance measures as to the process is in place. Tun Musa explained that nominations come from third-parties as well as from the institutions where the nominees are attached to, and a person can also nominate himself for the candidacy. “However,” Tun Musa added, “he must justify with verifiable facts on the claims that he has submitted pertaining to his speciality and outstanding contributions.” We conduct independent checks on them and seek third party opinions on what has been claimed in the submission. The corporate governance process that we have structured allow the whole process to be well justified, enable claims to be substantiated and the jury members during the discussions openly challenge the opinions during the meeting. As Chairman I admit that sometimes it has been a difficult job to moderate the discussions. “I am proud to note that what has been discussed and decided is respected by each and every member. And in fact during the process, when we identify weaknesses to the process, appropriate measures and rectifications are immediately undertaken. After the Award ceremony, the Jury members are in fact intending to hold a special meeting to discuss on how to further improve, in order to advice the future Award committees, on areas to be implemented in moving forward.” Tun Musa is wary and sanguine about likening The Royal Award to becoming the Nobel Laureate of Islamic Finance. The ‘Nobel Laureate', he stressed, has taken a long process to gain global recognition. Other non-commercial awards such as The King Faisal International Award given by the King Faisal Foundation in Saudi Arabia and the Islamic Development Bank Prize for Islamic Banking and Economics have only of late gained prominence and recognition. It shows that it will take time. As such, The Royal Award for Islamic Finance likewise, he added, like all reputable awards or brands, will take time and investment in terms of building awareness, upholding its integrity as well as building a ‘track record' of exceptional recipients. Tun Musa revealed that Jury Panel deliberations are very robust. Members openly challenged the opinions given and very often request for further verifications on the submissions. In some cases, members volunteer information not available in public domains; and these are verified. Decisions are made on a unanimous basis. This pre-empts any room for rigging or any pre-planned agendas. The Jury Panel is totally independent. Not even the Award Steering Committee are privy to the nomination list or the issues discussed at the meetings. As to the future development of The Royal Award, Tun Musa is keen to stress that it is not about Malaysia, but a means to raise the awareness and significance of Islamic finance to the international marketplace. “It is not about claiming pride and honour for us in Malaysia but it is our CSR to the global industry. We strongly believe in sharing our experience and achievements within the industry. In order for Islamic finance to be truly accepted into the mainstream financial marketplace and not just a niche market, there must be more global understanding, acceptance and adoption of Islamic financial products and services. Therein lies the global impact of The Royal Award – we seek to honour outstanding contribution towards the development of Islamic finance, regardless of their nationality, gender or religion and be they industry practitioners, academicians or policy-makers,” he explained. Indeed Malaysia acknowledges the achievements by others elsewhere in the development of global Islamic finance. He is confident that Malaysia will continue to drive efforts to promote itself as an International Islamic Financial Centre, and which would set as an example for the development of Islamic financial services within a comprehensive and facilitative framework.
