Purpose The purpose of this study is to examine the role of corporate governance in combating corruption through the implementation of Section 17A of the Malaysian Anti-Corruption Commission Act 2009 (MACC Act) within Islamic financial institutions in Malaysia, particularly Islamic banks. This study explores how strict corporate liability requirements influence Islamic corporate governance practices operating under a dual governance framework that integrates conventional regulatory expectations with Shariah compliance principles. Design/methodology/approach This research adopts a qualitative approach based on semi-structured interviews conducted with senior compliance officers and Shariah governance experts within Malaysian Islamic financial institutions. This study involved participants from multiple Islamic banking institutions selected through purposive sampling based on their expertise in governance, compliance and Shariah oversight. The analysis evaluates institutional responses to Section 17A, mapping governance practices against the T.R.U.S.T principles (Top-level commitment, Risk assessment, Undertake control measures, Systematic review and Training and communication). Interview data were analysed using thematic analysis involving coding, categorisation and interpretation of recurring governance and compliance themes. This study assesses operational adaptations, governance integration mechanisms and compliance challenges arising from regulatory requirements. Secondary sources, including regulatory guidelines, institutional reports and governance frameworks, were triangulated with interview findings to strengthen analytical validity and consistency. Findings The findings of this study reveal that Section 17A has driven significant institutional reforms, including the establishment of specialised integrity and governance units, adoption of international standards such as ISO 37001 and strengthening of internal anti-corruption frameworks. However, operational challenges emerged because of extensive due diligence requirements, documentation burdens and third-party risk management processes, which contributed to procedural delays. Cultural resistance linked to trust-based operational traditions further highlighted the need for continuous training and internal communication. Effective harmonisation between regulatory compliance and Shariah governance was facilitated through joint supervisory mechanisms involving compliance and Shariah committees. Respondents also identified the need for sector-specific regulatory guidance, enhanced inter-agency coordination and specialised skills development, particularly in forensic auditing and digital compliance tools. Originality/value This study contributes to the literature by analysing the integration of anti-corruption corporate liability provisions within the unique dual governance structure of Islamic financial institutions. This study provides practical insights into aligning regulatory compliance with Shariah ethical values and offers policy recommendations to strengthen governance frameworks, thereby supporting sustainable and ethically grounded governance practices in Malaysia’s Islamic banking sector.
Samad et al. (Wed,) studied this question.