Shariah Governance Standards in Malaysia: A Systematic Policy Content Analysis of SGPD 2019, GP28 and AAOIFI

Islamic finance in Malaysia continues to expand rapidly, supported by a structured Shariah governance framework designed to ensure that all institutional activities comply with Shariah principles. Through Bank Negara Malaysia (BNM), two Shariah governance standards have been issued for IFIs; the Shariah Governance Framework (SGF) in 2010 and superseded by the Shariah Governance Policy Document (SGPD) in 2019. In the cooperative sector, the Malaysia Cooperative Societies Commission (SKM) issued the Shariah Governance Guidelines known as GP28. This study conducts a systematic policy content analysis of SGPD 2019 and GP28, with reference to the international benchmark AAOIFI GS-1, to assess their alignment, similarities, and regulatory gaps. The findings show that SGPD 2019 is more comprehensive and technically detailed than GP28, particularly in governance structure, Shariah Committee responsibilities, and screening requirements, yet both standards lack clear definitions and stated objectives of Shariah governance, elements explicitly outlined in AAOIFI GS-1. The study highlights areas where Malaysian standards lead or lag global practices and offers recommendations to enhance the clarity, consistency, and robustness of Shariah governance across IFIs and cooperatives.