What do the former Minister of Economy of France, Christine Lagarde; the former prime minister of United Kingdom, Gordon Brown; and the former under Secretary for International Affairs, US Treasury, John Taylor; have in common? They were all high-profile public sector personalities, promoting Islamic finance in their respective jurisdictions, and since they left office the movement's momentum has meandered or stopped ‘cold'.
The key-person risk in the public sector, and among Sharia scholars, may be more acute in Muslim countries that are Islamic finance hubs. For example, in Malaysia the central bank governor Dr Zeti Akhtar Aziz has been referred to as the "first lady of Islamic finance" or "a governor's governor" for Islamic finance. She has been the "voice, face and will" for Islamic finance not only in Malaysia, but across the globe.
High-profile proponent
In Malaysia, the chairman of the Securities Commission, Zarinah Anwar, announced her retirement at the end of March. She has also been a high-profile proponent of Islamic finance. However, there is much confidence in her successor, Ranjit Ajit Singh, who is an internal appointment. The transition from Anwar to Singh may just be a template for succession of Islamic finance personalities in the public sector.
The same key-person risk applies to the top Shariah scholars, especially those sitting on the many boards that advise the $1 trillion (Dh3.67 trillion) industry.
These scholars, Nizam Yaquby (Bahrain), Mohamed Elgari (Saudi Arabia), Abdul Sattar Abu Ghuddah (Syria), Mohammad Taqi Usmani (Pakistan), Mohammad Daud Bakar (Malaysia), Hussain Hamid Hassan (Egypt/Dubai), Yusuf Talal Delorenzo (US/Dubai), and others, are the ‘gatekeepers' of the industry.
But, some of the scholars have resigned from their many boards to undertake research, while others are getting older. There is still no sign of the new generation of scholars to take the mantle from these pioneers.
In contrast, when key figures in Islamic finance in the private sector move on, they do not seem to leave a ‘vacuum' of knowledge and influence in the industry. For example, when the names associated with the ‘founding' of Islamic finance — at HSBC Amanah, Citi-Islamic, Dow Jones Indexes, AAOIFI (Accounting and Auditing Organisation of Islamic Financial Institutions), among others — moved on, these entities managed not only to survive, but thrived. There is a deep ‘bench strength' of human resources in private sector and industry bodies.
Embryonic industry
As with any embryonic industry that has matured over time, the transition from personality to institutionalisation is also needed in Islamic finance. For example in the technology industry, despite the unfortunate early death of Steve Jobs, Apple has continued to move forward.
The Islamic finance industry must put in place well-planned and transparent succession programmes to reduce the risk that is a result of reliance on key people. This will strengthen the industry.
The writer is global head, Islamic Finance and OIC Countries, Thomson Reuters. Opinion expressed here is the writer's own and does not reflect that of his own organisation or that of Gulf News.
