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The purpose of this paper looks into how the Islamic legal maxims (ILM) could provide a basis for Sharīʿah audit practices in assisting the institution’s managerial practice to achieve Maqasid al Shari’ah (MS).

The findings of the study recorded in this paper are based on a single case study selected from a preliminary study. The qualitative approach was used, where two phases of a semi-structured interview were conducted on the targeted participants in their natural settings.

It was found that with the implementation of Sharīʿah audit practices, ILM supports the achievement of MS by Islamic banks. With this, the income generated by these banking institutions is halal, and all business transactions and operations will not violate the Sharīʿah principles. Furthermore, the ILM includes principles such as “certainty is not overruled by doubt,” “matters determined according to intentions,” “the norm in transactions is that of permissibility,” “harm must be eliminated” and “judgment is to be based on knowledge and understanding.”

The findings of this study have provided valuable information that would lead Muslim auditors to exhibit a strong character while abiding by Islamic principles.

MS is strongly recommended in Islamic banking institutions because of the significant relationship between MS and the objectives of business transactions where wealth must be protected in the prevention of incoming hardships occurring in society. Moreover, this paper focuses on the application of ILM in the Sharīʿah audit practices as a part of the Sharīʿah governance in Islamic banks.

The global recession caused by the COVID-19 pandemic has led to the closure of thousands of village-owned enterprises (VOEs), which are community-managed enterprises that operate in the hostile rural areas in emerging economies. Thus, considering that a Schumpeterian view of economic downturn sees recessions as times where old products/services decline while new products/services emerge, this paper aims to explore the specific innovation-based diversification strategies that matter for the survival of emerging economy VOEs in recession periods to develop new theoretical insights.

The study is based on multiple-case studies of 13 leading VOEs operating in the rural areas of Java Island in Indonesia, an emerging economy. The data was analysed using within-case and cross-case analyses.

Overall, a number of major novel findings have emerged from the analysis, based on which the authors developed several new propositions. First, from the perspectives of both new product and new service diversification, “unrelated diversification” is the primary resilience strategy that seems to be associated with the survival of VOEs in the COVID-19 recession, over and above “related diversification”. Second, from an industrial sector diversification perspective, the most dominant resilient strategy for surviving the recession is “unrelated diversification into tertiary sectors (service sector)”, over and above diversification into the primary sector (agriculture, fisheries and mining) and secondary sector (manufacturing and construction).

The authors contribute to the literature on entrepreneurship in emerging economies by identifying the resilience diversification strategies that matter for the survival of VOEs in recession.

The paper aims to examine the impact of Shari'ah governance quality on environmental, social and governance (ESG) performance in Islamic banks.

The study's sample consists of 66 Islamic banks from 14 countries over 2015–2019. The research uses the Heckman model, which is a two-stage estimation method to obtain unbiased estimates, as ESG scores are only observable for 17 Islamic banks in Eikon Refinitiv database at the time of the analysis.

The analysis shows that Shari'ah governance has a beneficial role to achieve ESG performance. The analysis also shows that enhanced profiles of Shari'ah supervisory boards' (SSB) attributes are more efficient than the operational procedures to promote ESG performance. In addition, the analysis shows that enhanced SSBs' attributes strengthen the bank's corporate governance framework, while sound-designed procedures increase the bank's social activities by emphasizing their roles to ensure Shari'ah compliance. Finally, the analysis sheds light on the failure of Shari'ah governance to promote environmental performance.

The existing databases providing companies' ESG-related information still do not offer sufficient data to conduct an international study with a larger sample of Islamic banks (IBs) having ESG scores for a more extended period.

The research provides policy insights to Islamic banks' stakeholders to promote social and governance performance in the Islamic finance industry through improving Shari'ah governance practices. However, raising environmental awareness is imminent among all actors implicated in the Shari'ah governance processes to help overcome the anthropogenic risks.

The research complements the governance-banks' ESG performance literature by examining the role of Shari'ah governance. The research also extends the literature on Islamic banks' sustainability by pointing to the Shari'ah governance failure to enhance environmental performance and thus achieve Maqasid al-Shariah regarding the environment.