LONDON – “I am glad my term is over. The process to decide the winner of The Royal Award 2012 was very difficult. I would not want to go through that again,” confided a prominent member of the international jury panel of The Royal Award, the biennial accolade that is bestowed by Bank Negara Malaysia, the central bank, and the Securities Commission Malaysia (SC) under the patronage of the Malaysian King, Tuanku Abdul Halim Shah and under Malaysia's International Islamic Financial Center (MIFC) initiative. Whether he was exhausted or exasperated by the sheer process is not clear, but he and another of his international colleagues could not be more to the point that the process needed more reform and structure, to ensure that the lofty aspirations of the promoters are indeed attained and sustained. Jury members serve two terms covering two awards, the inaugural one which was given in 2010 to Saudi businessman and pioneer of Islamic finance Sheikh Saleh Kamel, Head of the Dallah Albaraka Group. The 2012 Royal Award was presented to prominent Islamic banker Iqbal Khan by the King of Malaysia at a Gala Dinner in conjunction with the Global Islamic Finance Forum (GIFF) 2012 which was held in Kuala Lumpur in September. According to the seven-man award jury, The Royal Award “is presented to Iqbal Khan for his dedication, drive and extraordinary leadership in accelerating the global growth and accessibility of Islamic finance.” The Royal Award Jury Chairman Tun Musa Hitam, the Chairman of the World Islamic Economic Forum and former deputy prime minister of Malaysia, emphasized that “the jury went through a very stringent and rigorous selection process on the nominees' merits and achievements, which resulted in several rounds of deliberations, followed by a very robust discussion on the critical and objective assessment of the shortlisted candidates before arriving at a final decision. The award recognizes Iqbal Khan's contribution toward the development of Islamic finance that serves as an inspiration for the next generation.” Khan is currently CEO of Fajr Capital, an Islamic private equity firm supported by Saudi Arabia's Al-Subaiei Group; Khazanah Nasional Berhad, the Malaysian Sovereign Wealth Fund; Abu DShabi Investment Council; and the Government of Brunei. He is also Chairman of the Executive Committee and board member of Jadwa Investment in Saudi Arabia, the former CEO of HSBC Amanah. “I was really surprised,” declared Iqbal Khan, in an interview with Saudi Gazette, “I didn't even know I was shortlisted, let alone getting the award. I'm greatly humbled and honored to have this opportunity. What it means to me is that I have a greater responsibility to make sure that I continue to inspire the future leaders of the Islamic finance industry and continue to make my contribution through the platform with which I'm associated, Fajr Capital. I am greatly honored to receive this distinction, but our work has just begun. The Islamic finance industry has to create role model institutions and economies to create a demonstration effect across the world. Giving capitalism a moral compass is a vision we can all commit ourselves to.” In fact, there were three short-listed nominations out of a record 32 nominations received, including Royal Professor Engku Aziz, founder of Lemabaga Tabung Haji (the Pilgrims Management Fund of Malaysia), the most successful non-bank savings institution in the Islamic finance movement, and a Pioneer of the Malaysian Cooperative Movement Angkasa; and of course Iqbal Khan. The two important and immediate challenges for The Royal Award are implicit. Firstly, it needs to widen the composition, scope and relevance of its jury panel. The outgoing panel comprised Tun Musa Hitam as chairman, and Tun Abdul Hamid Mohamad, former Chief Justice of Malaysia; professor Dr. Volker Nienhaus of Germany; professor Dr. Abbas Mirakhor of Iran; Dr. Mohamed Ali Elgari of Saudi Arabia; A. Riawan Amin of Indonesia; and Dr. Yahia Abdul-Rahman of the US as members. None of the above are market practitioners or represent any other stakeholders. As such, the next jury panel should include at least one market player; perhaps even a corporate or even a consumer organization and NGO. Secondly, it is scandalous that there was no woman included in the jury panel. This especially given at the time when The Royal Award was launched, the two major regulators in Malaysia - the central bank and the securities commission - were both headed by two prominent women. In the case of Bank Negara Malaysia, Governor Dr. Zeti Akhtar Aziz, who was last year appointed for another term; and in the case of the Securities Commission Malaysia, Chairman Zarinah Anwar, who retired in April this year. The Royal Award would do well to take gender inclusion and equality seriously – not for the mere sake of it but for the fact that in certain markets such as Malaysia, women are already playing a prominent role in Islamic finance. In Malaysia, at least three CEOs of Islamic banks are women. There are also several asset management and other institutions headed by women. The dichotomy of Islamic finance is that it may be in danger of reinforcing the stereotype of the plight and treatment of Muslim women, given that the industry in general continues to be dominated by brown (and some white) middle class men in fancy suits. The industry needs to send out the right signals in terms of inclusiveness and in this respect The Royal Award can and should lead the way. The next jury panel of The Royal Award will be important. The initial task is always difficult given the novelty of newness and the certainty of lack of oversight in some respects. But as The Royal Award starts to mature over the next four years, the jury panel too will have to start to demonstrate that this award is not just going through the motions of awarding people who have been around for some time and who somehow deserve to be honored. Receiving 32 nominations is meaningless if many of them are from people with hardly a track record in Islamic finance and those nominating themselves. It is not the number of nominations but the quality of the nominations that matter. The nominations process needs to be rethought. Sometimes having an open nomination process can be fraught with anomalies and difficulties, and can be open to abuse or mischief. An alternative would be to have a panel of experts come up with say five or ten nominations, and the nominators have to defend their nominations robustly even before any independent due diligence is conducted by the jury panel. But ultimately, the acid test for The Royal Award will be when it becomes mature enough so as not to feel compromised or caving in to sensitivity in selecting a Malaysian winner of the Award. The short-listing of Royal Professor Engku Aziz for the 2012 Award is a point in case. Of course there are also those who regret the fact that The Royal Award would not be complete without acknowledging the contribution of pioneers who have passed away over the last three decades. The jury panel for the inaugural award in 2010 gave a posthumous award to the late Dr. Ahmed El Naggar in tandem with the first recipient, Sheikh Saleh Kamel. There are so many deserving pioneers whose contribution to Islamic finance have been invaluable and who are no longer with us. In fact, one banker commented that if more posthumous awards are given, these pioneers would dominate the awards for the next decade or so. The sensible thing to mitigate the issue relating to posthumous awards is to launch a Plaque of Appreciation on which the names and contributions of all the major pioneers of contemporary Islamic finance who have died would be honored once and for all. This award would be launched at The Next Royal Award during GIFF 2014. The above suggestions may go some way, even if only modestly, in making The Royal Award “the Gold Standard” in the Islamic finance space. As the latest recipient, Iqbal Khan stressed: “The Royal Award was conceived with the objective of creating the benchmark in the Islamic finance industry in terms of recognition, motivation and inspiration. It is very unique and independent, and brings together not only the Malaysian establishment, but also the global Islamic finance community. The fact that the independent seven-man Jury comprised only two Malaysians points to the importance of the international aspect of the Award.”
