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Abstract

The moral ethos of any business organisation has always had an impact on the governance of its conduct. In the wake of the financial crisis, there have been increased calls for improving the moral standards of business organisations, especially in the financial sector.

In academic literature, the link between morality and religion has been widely discussed. Therefore, in the context of business governance, the influence of religious values has been the subject of a considerable amount of research. Most research in this respect has primarily focused on the positive impact of religious values on governance. However, a little attention has been paid to the negative effect that the manifestation of these values has equally brought.

The paper explores the relation between morality, religious values and corporate governance. Although the paper aims to provide an informed perspective on how religious values impact on corporate governance in general, it pays special attention to the negative impact that religious values have on the governance structure of Islamic financial institutions, as an example of ethically oriented organisations.

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