Awqaf Governance: Thinking Inside the Box

Hisham Dafterdar, CPA, PhD
Chairman, Awkaf Australia Lt

Good governance is a major issue facing awqaf organisations. Despite the sector’s awesome size, awqaf remains one of the most misunderstood areas of the Islamic financial system. Because of awqaf’s private and usually esoteric nature, and lack of transparency how awqaf are governed and regulated, awqaf appear to work in isolation from other sectors. The most-oft cited reason for this seclusion is the pantomimic management style of the nazirs. Nazirs are required to comply with both the letter and spirit of the waqf deed. The importance of the waqif’s conditions is indicated by the frequently quoted rule: The conditions of the waqif have the same legal force as the edicts of the legislator. This rule leaves very little leeway for the nazir to originate or innovate. What is deemed to be appropriate strategy for the nazir, will be conditioned by a concern not to violate the conditions of the waqif, the wishes of the donors and the rights of the beneficiaries. If the waqf document is silent on a particular matter, or should a case arise which justifies an action at variance to the conditions of the waqf, or if the nazir is not sure about the most appropriate action to take, then the matter should be referred to a proper authority for an opinion or a decision.

Much has been said and written in recent years about corporate governance and the need for the corporate nazir, and a lot of rules are laid down to regulate awqaf along the lines of the corporate world. Many awqaf nazirs resist regulating the sector. They consider the no-emotions-allowed corporate governance standards are a bane for awqaf as they mechanise the nazara function, desensitise attitude and remove the moral loading from the nazir’s conduct. In awqaf, moral autonomy is less about compliance and control and more about consciousness and reflection. To be an awqaf nazir is more of a calling than a job. Awqaf organisations are mostly populated by ethical and well-intentioned people. Staff in awqaf is comprised of professionals and passionate volunteers who have chosen to work in awqaf for less tangible rewards. They are engaged and empowered by their faith, and are more likely to make conscientious proactive effort in serving awqaf. However, being passionate is not enough. The task requires a multi-disciplinary approach, combining and understanding of Shariah, awqaf, finance and sociology.

Awqaf organisations exist within and are part of society, and as such, reflect the ethics and social mores of society. Awqaf like all organisations, be they public or private, can fall into cultural habits, and awqaf nazirs grow up with processes around them that they see as normal and should be followed. The prevailing cynicism about the human value of the individual nazir is the direct influence of the emotionless market culture that opened a chasm between nazirs and beneficiaries. For too many years, we taught ourselves that awqaf is a corrupt and careless sector with loose accountability over loose assets. We appear to find it easier to talk about unscrupulous awqaf nazirs whose unethical and careless behaviour led to the loss of many awqaf, than to talk about those who are good and kept awqaf alive and thriving. For over 1400 years, awqaf has not only survived, but thrived. In spite of the recent strides in awqaf, the common perception of awqaf as amateur organisations run by enthusiastic volunteers still lingers on.

It is impossible to keep awqaf and emotions apart. Awqaf is an industry where the heart and mind have to fire simultaneously. Awqaf by its religious conviction is an ethical sector, regulated mainly by Shariah. Unlike corporate governance rules which generally dictate what should be done without necessarily engaging in conscious deliberation, Shariah provides a principles-based approach to ethics. It enables us to weigh what should be done through reasoning. Unlike man-made policies and procedures which are situation-specific, Shariah enables us to make decisions and resolve ethical dilemmas in any situation we face. If apathy is a corporate taboo, apathy in awqaf is practically sinful. I am just a nazir doing a job is neither ethical nor a moral defence. To dehumanise awqaf management means that awqaf can no longer be the engine of welfare it is meant to be.

The concept of governance in awqaf has two interrelated meanings. One is practical and the other is moral. Governance in its practical sense means improving the way awqaf is organised and managed and committing to proper standards and benchmarks of performance. On the other hand, governance in the moral sense relates to the concept of the waqf as an institution for human development in accordance with the objectives of Shariah (maqasid Al Shariah) in all of its spiritual, intellectual and physical attributes. The emphasis on ethics is that awqaf is part of religion. Thus a nazir as an individual has duty and responsibility to all stakeholders, to the state, to society and to God. This is where actions speak louder than the words.