RASHARD DAVIDS and MAHMOOD SANGLAY
As children we recall how adult men, be it in Gadatt jamaahs, Quranic recital groups or in community-oriented organisations, conducted formal business. We were frequently fascinated by the manner in which decisions were taken, randomly, in general discussions and simply by a show of hands.
As we grew up we learned that accountability, ethical leadership, and good governance are not just corporate ideals—they are intrinsic to the ethical teachings of Islam. South Africa’s King IV Report on Corporate Governance outlines principles that resonate deeply with Islamic teachings on stewardship (amanah), consultation (shura), and justice (adl).
Yet, many Islamic Non-Profit Organisations (NPOs) and Public Benefit Organisations (PBOs), including some Institutions of Islamic learning operate with minimal or no formal structures, transparency, or accountability mechanisms. These include organisations and institutions with which we had some close association.
Why good governance matters
If you’ve ever donated money to an Islamic charity, bought goods from an Islamic school fundraiser, or sat through a heated community meeting, you’ve been part of governance—even if you didn’t know it.
‘Governance’ is just a fancy word for how organisations are managed and how decisions are made. It includes who has the power, who holds people accountable, how money is handled, and how information is shared. And for Muslims, this isn’t just a business issue—it’s a deeply religious one.
Islam teaches that leadership is a trust from Allah. It’s not about power or personal gain. The Quran commands:
‘Indeed, Allah commands you to render trusts to whom they are due and when you judge between people to judge with justice.’ (Quran 4:58)
So when Islamic organisations handle donations, run schools, or manage community affairs, they’re carrying a sacred trust. And if they mismanage that trust, the consequences can be spiritual and practical: wasted funds, community conflict, and loss of credibility.
King IV is South Africa’s guide to good governance
After years of scandals and corporate failures, South Africa introduced a set of guidelines called the King IV Report on Corporate Governance. While it started out for big companies, King IV now applies to all organisations—big or small, profit or non-profit—including religious organisations.
King IV isn’t a law that sends people to jail if they don’t comply. Instead, it’s a guide. It tells organisations to be ethical and transparent and to think about long-term impact, not just short-term gains. The report advises us to involve all stakeholders—people who are affected by what we do. And it advises to report clearly on how we operate.
These ideas might sound very modern, but they’re entirely in line with Islamic teachings.
King IV is consistent with Islamic values
King IV says leadership should be ethical and effective. Leaders must be honest, fair, and committed to acting in the organisation’s best interest.
This echoes Islam’s concept of amanah (trust). Prophet Muhammad ﷺ said:
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‘Each of you is a shepherd, and each of you is responsible for his flock.’ (Bukhari)
So whether you’re running a big business or a mosque committee, you’re accountable to both the community and to Allah.
King IV insists on involving stakeholders in decisions. It’s not enough for a few people at the top to decide everything.
Islam strongly supports this. The Quran says:
‘…and those who respond to their Lord, establish prayer, and whose affairs are determined by consultation among themselves…’ (Quran 42:38)
Unfortunately, in many Muslim organisations, decisions are still made by a handful of people. Sometimes other members of an executive in an organisation, or in a community, feel excluded, leading to conflicts and distrust.
King IV encourages structured meetings, records of decisions, and involving people from different backgrounds. That’s exactly what shura calls for: open, honest consultation where everyone has a voice.
Justice (adl) and fairness
Justice is a core Islamic value.
‘Indeed, Allah commands justice and the doing of good…’ (Quran 16:90)
King IV similarly demands fairness in how organisations treat people, handle resources, and make decisions. For example: Are funds distributed fairly? Are employees treated equally? Are community needs genuinely considered?
When Islamic organisations fail in these areas, they not only go against King IV but also betray the principles of justice laid out in Islam.
Accountability (hisbah)
Accountability means people in power should answer for what they do. King IV recommends regular evaluations of boards and leadership, clear reporting, and independent audits.
Islam teaches hisbah, which means watching over affairs to ensure what’s right is done. The Prophet ﷺ said:
‘Whoever among you sees an evil, let him change it with his hand; if he cannot, then with his tongue; and if he cannot, then with his heart—and that is the weakest of faith.’ (Muslim)
Sadly, some Islamic organisations avoid audits, don’t publish financial reports, or keep donors in the dark. This secrecy violates both King IV and Islamic ethics.
Transparency builds trust. If people don’t know where their donations go, they’ll stop giving. Worse, it can damage the reputation of Islam itself.
Maslahah: acting in the public interest
King IV talks a lot about sustainability and the ‘triple context’—considering economic, social, and environmental impacts.
Islam calls this maslahah—acting in the public interest. Prophet Muhammad ﷺ taught:
‘There should be neither harm nor reciprocating harm.’ (Ibn Majah)
This means Islamic organisations should: avoid harmful investments, even if they’re profitable. They should care for the environment and think about future generations.
King IV urges organisations to look beyond financial results and measure their social and environmental impact. For Muslims, this is part of worship and serving humanity.
Clear reporting: Bayaan and avoiding gharar
King IV insists on integrated reporting, where organisations explain how they create value over time. This includes financial results, social impacts, and environmental effects.
Islam demands clarity in dealings. The Quran says:
‘O you who believe! When you contract a debt for a fixed period, write it down…’ (Quran 2:282)
Ambiguity (gharar) is prohibited. Contracts, transactions, and reports should be clear. King IV’s push for integrated, honest reporting fits perfectly with Islamic values.
The trust deficit in Muslim organisations
Many Muslim organisations in South Africa still work on trust and tradition. They rely on good intentions rather than documented systems. This can create serious problems, including missing funds, internal board disputes and donor fatigue due to lack of trust.
Sometimes, leaders fear that adopting formal governance will feel too corporate or western. But King IV’s principles are universal—and entirely Islamic.
Good governance isn’t about fancy language. It’s about fulfilling the trust Allah has placed on us. King IV gives a modern structure for what Islam already teaches.
South African Muslims have a unique opportunity. By applying King IV principles, Islamic organisations can become more transparent and professional, more inclusive and fair and more sustainable and impactful
This can restore community trust, attract better talent, and strengthen the credibility of Islamic institutions. Most importantly, it can show that Islamic values are not just historical ideals—they’re practical solutions for modern challenges.
The Quran reminds us:
‘And establish weight in justice and do not make deficient the balance.’ (Quran 55:9)
It’s time for Islamic organisations in South Africa—and beyond—to strike that balance. King IV is a useful corporate tool. And for Muslims it’s a practical way to live out amanah, shura, and adl in our institutions and communities.
By embracing King IV, we can ensure that our organisations truly reflect the ethics, integrity, and vision that Islam demands.
Haji Rashard Davids is an experienced professional with a strong background in civic matters and community activism. He holds a BA (Unisa) and an MBA (Hull, UK). He served as a consultant to various organisations, including the Finance/HR portfolio at the Islamic Peace College of South Africa (IPSA).
Mahmood Sanglay is the CEO of Muslim Views and a representative of the Association of Independent Publishers (AIP) on the Adjudication Panel of the Press Council of South Africa.
