Value-Based Governance (VBG) for ZISWAF Institutions: Designing a Shariah–ESG Audit Framework to Achieve Outcome Accountability and Sustainable Maqashid Syariah

Abstract

Zakat, infaq, sadaqah, and waqf (ZISWAF) institutions have a strategic contribution in reducing poverty and social inequality. However, governance practices that are still limited to input-output accountability result in weak transparency and low measurement of socio-economic outcomes, which should be the core of Maqashid Syariah. This article aims to develop a Value-Based Governance (VBG) framework for ZISWAF institutions through the design of Shariah-ESG Audits, which integrate Shariah principles with global sustainability standards. The research uses a library research approach based on a systematic literature review. The results of the study reveal three main findings. First, Shariah audits still predominantly emphasize fiqh compliance, without assessing the effectiveness of ZISWAF program outcomes. Second, the financial reports of Islamic philanthropic institutions are mostly input-output, not outcome-based, so they are unable to show the extent to which mustahik are truly empowered. Third, the integration of ESG with maqāṣid is still limited, even though there is substantive alignment between the two: Environmental with hifz al-bi'ah, Social with hifz al-nafs and hifz al-nasl, and Governance with hifz al-māl. This article contributes by offering a VBG-based Shariah–ESG Audit framework consisting of five components: maqāṣid-based value principles, integrated Shariah–ESG–maqashid indicators, digital reporting mechanisms, independent audits, and a continuous improvement cycle (governance loop). Theoretically, this framework expands the discourse on Islamic philanthropy governance to align with global standards without losing its Shariah identity. Practically, this model can help regulators set national standards, encourage ZISWAF institutions to improve transparency, and strengthen public trust. Thus, the application of VBG-based audits that integrate sharia and ESG not only increases outcome accountability but also ensures the sustainable achievement of sharia maqashid objectives in the context of modern socio-economic development.