A Comparison between the Islamic and Western Corporate Governance Model with Special Emphasis on Pakistan

Abstract

The convergence of western business methods with Islamic law in Pakistan's corporate governance is the topic of this article, which investigates the role that Islamic law plays in the country. Given the current state of the world's financial markets, it is more important than ever to have in place an efficient corporate governance structure. This event made it feasible for there to be an alternative to the financial system that is currently in place in Pakistan. As a result of the worldwide financial crisis, Islamic financing has emerged as a respectable alternative. As a consequence of this, the conventional monetary system will be contrasted with the Islamic monetary system during the course of this essay. In addition to this, it assesses the likelihood of corporate governance mechanisms converging in Pakistan, an aspect that is essential for the efficient administration of any financial system. In Pakistan, the Islamic Financial System (IFS) might be used as a replacement for the country's current financial system and as a mechanism for corporate governance, both of which might share characteristics with western models of corporate governance. On the other hand, using Islamic ideas as a litmus test might not be as problematic as it first appears to be.