RCI TH Recommendations: Focus On Performance Indicators Beyond Timeline Compliance - Expert

KUALA LUMPUR, Aug 13 (Bernama) -- The implementation of the Royal Commission of Inquiry (RCI) recommendations on Lembaga Tabung Haji (RCI TH) should not only adhere to the stipulated timelines and action plans, but also be accompanied by clear performance indicators to ensure their effectiveness can be measured.

Department of Economics lecturer at the Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia (IIUM), Dr Muhammad Irwan Ariffin, said progress reports on the implementation of the recommendations should be issued consistently to reduce uncertainty and restore depositors’ confidence and expectations.

He said this was important as economic decisions and public actions were influenced not only by the actual financial situation, but also closely tied to expectations and perceptions.

He added that any weaknesses in information dissemination or delays in implementing the recommendations without proper explanation could create a negative environment and cause public concern.

“When unclear information emerges, it can trigger hasty actions among depositors, including unwarranted withdrawals of savings that should not occur,” he said when contacted through the Bernama Radio’s REAKSI programme today.

On governance and administrative reforms, Muhammad Irwan said the existing framework should be reviewed periodically to create room for internal improvements within the organisation.

He stressed that the criteria for appointing members of the institution’s board of directors must be based on expertise and integrity, as recommended by the RCI, in addition to having a clear separation of duties between the management body and special committees.

“The committees established must also be proven to be free from conflicts of interest and political pressure, while complying with strict accounting standards,” he said.

From the perspective of Islamic economic principles, Muhammad Irwan said the proposed reforms translated the values of trust, justice and compliance with hifz al-mal (protection of wealth), while improvements in governance constituted ‘sadd al-dhari’ah or preventing harm before it occurs.

He added that good governance would enable TH to determine the actual amount of profit earned, as well as the amount of reserves and hibah that could be safely distributed.

“Investment assessments should not be limited to whether a product or contract is halal or haram, but should be more inclusive by taking into account how governance decisions are made to safeguard depositors’ trust,” he said.

To win the confidence of the younger generation, Muhammad Irwan recommended providing more transparent and open financial reports, alongside efforts to strengthen financial literacy so that haj registration can be made at a younger age.

“The younger generation is also increasingly financially literate and concerned about how their funds are managed, making transparency regarding financial statements, risks and governance increasingly important,” he said.

On long-term investment strategies, Muhammad Irwan recommended a balanced portfolio diversification approach between stable and liquid assets and growth assets with high return potential.

-- BERNAMA