Financial crises and recent corporate failures call for the urgent need of good corporate governance systems. Good governance should be implemented to maximise the wealth of shareholders while acknowledging the rights of other stakeholders such as employees, creditors and local communities. Such a framework offers a guide to companies for an effective and efficient board, which has the highest authority and position in any corporation. Such a board is responsible to provide the strategic direction to the top management and monitor the compliance of their strategy by the management. As a prominent corporate governance theory, agency theory has hinted to the existence of agency conflict and the need of goal congruence between the board and owners of the corporation. Based on agency theory, many developed and developing countries have introduced corporate governance guidelines with the expectation that best corporate governance practices are implemented. Many studies have been conducted to examine the impact of corporate governance on profitability, efficiency, risk, accounting information disclosure and corporate social responsibility. Almost all such research have concentrated on profit oriented organisations. However, there is limited literature on the governance practices in non-profit organisations, especially in waqf (Islamic endowment) institutions. Perhaps this is due, in part, to the absence of governance guidelines for waqf institutions. Thus, the objective of this paper is to explore the theoretical concepts on which "Best practices of governance for waqf institutions" can be built. The proposed theoretical concepts are amanah (trustee of the God), Islamic accountability (accountability to God and human being), hisbah (avoiding evils and encouraging good deeds) and Taqwa (God consciousness). This paper has added value in literature on governance since it explores the fundamental concepts for governance practices in waqf institutions. This paper can be used as a stepping-stone for further development of recommended governance practices for waqf institutions.
