Practical analysis for investment professionals
05 April 2012

Islamic Finance: Bringing Ethics to the Center of Finance

At the CFA Institute Middle East Investment Conference in Doha, Qatar on 26 March 2012, Tarek El Diwany, a senior partner at Zest Advisory LLP,  argued that religion — be it Islam, Christianity, or Judaism — is not alone in making value judgments about the purpose of life and what is right and wrong. He asserted that finance does the same and that  underlying value judgments are responsible for setting the direction of finance.

El Diwany believes that it is a value judgment that the sole job of those managing a company is to maximize shareholders’ wealth, and that money is the sole measure of value. He stated that because of this underlying value judgment, important intangible considerations — such as happiness — are conspicuous by their absence in the financial statements and decisions of corporations.

Read more on the MEIC blog →

About the Author(s)
Usman Hayat, CFA

Usman Hayat writes about sustainable, responsible, and impact investing and Islamic finance. He is the lead author of "Environmental, Social, and Governance Issues in Investing: A Guide for Investment Professionals," and the literature review, "Islamic Finance: Ethics, Concepts, Practice." He is interested in online learning and has directed three e-courses for CFA Institute: "ESG-100," "Islamic Finance Quiz," and "Residual Income Equity Valuation." The other topics he writes about are macroeconomics and behavioral finance. Previously, he was a content director at CFA Institute. He is a former executive director at the Securities and Exchange Commission of Pakistan (SECP). He has experience working in securities regulation and as an independent consultant. His qualifications include the CFA charter, the FRM designation, an MBA, and an MA in Development Economics. His personal interests are reading and hiking.

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