Written by: Jasmin Jusufović

We believe that in the previous series of articles on Islamic economics and finance, our readers have already become familiar with many key terms and concepts of Islamic economics and finance. In this article, we will base ourselves on one concept that actually connects all participants in the economy and in society. The concept of trust (al-amanah) and responsibility (al-mas’uliyyah).

Let us recall at the beginning the fact that in Islam man is as much an individual as he is a social being. On that side, the life of man as an individual is inseparable from the life of man as a social being, and therefore Islam and the norms of Islam are actually a set of comprehensive guidelines for the entire human life. The starting point of Islam is that trust (or in other words trustworthiness) and responsibility is a natural moral characteristic of man.

According to Islamic law, Allah swt. is the Creator and Owner of all. Having created man on Earth, for man’s life and sustenance, Allah swt. entrusted man with the Earth and entrusted him with the responsibility of his steward on Earth, to dispose of it, manage it, produce it and prosper. So here we see that man’s relationship with God is viewed through trust (Allah’s) and responsibility (man’s). Islamic law reduces this relationship to interpersonal private and business relationships.

A separate branch of Islamic business law, which focuses on contract law, defines a valid contract as a relationship composed of several elements, the key elements of which are the offer and the acceptance of the offer. For the purposes of this record, we will not explain all contract law, but it is important for us to focus on these two elements of an acceptable contract. Namely, in order for the contract to be fair and valid, in Islamic law it is sufficient that the offer and the acceptance of the offer be made orally. In simpler terms, the contract becomes binding when an offer is made verbally and the offer is accepted, even if it is not formalized in writing (which is definitely recommended).

We notice that here it is said that trust is a key value in the correctness of business contracts between people.

Trust and responsibility are values that are mutual, that complement each other and protect each other. In every established contract, even in this simplest, verbal one, Allah, the Most High, calls us to be responsible for the fulfillment of our obligations: “Enforce contracts! Indeed, one is responsible for (fulfilling) the contract” (Isra, verse 34, translated by Čaušević) / “and stick to the contract because one must be responsible for contracts” (translated by Duraković); “fulfill your obligations, because an account will be asked for your obligations” (translation by Ljubibratić).

The word trust, confidentiality, in its Arabic origin shares a root with iman, faith.

So far we have been reminded of the values of confidentiality and responsibility as fundamental and innate human values, however, how to embody these abstract concepts in the business of legal entities, business organizations?

We are of the opinion that the mutual connection between these two concepts is also key here. Trust is earned through responsibility. It is in the interest of every business entity in general to show its own responsibility in the business it deals with. Having understood the degree of trust in Allah, the Most High, then it is in the special interest of subjects who do business according to Islamic norms to inform their business partners in some way what degree of responsibility they have in the work they do.

The most important item in achieving that goal is expertise and professionalism. Every business organization in the Islamic economy should be directed towards the fact that behind its offer are professional people who know business and Islamic norms. This is a special need in the financial sector, where most of people’s assets (or in other words, people’s trusts) move. Hence the obligation of every financial institution to have within its structure professional committees (Sharia, auditing, and similar control functions), independent of the interests of the owners and the strategic goals of the business. So, for example, the existence of a Sharia board in a financial institution is not a matter of formalism, so that the institution could bear an Islamic name, but as an indicator of the responsibility that organization has in forming its business offer.