Organising halal responsibility in a company

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How best to organise and integrate halal in a company and its operations? In many cases, the matter of halal is left to the internal halal committee to organise, which is not only incorrect but also provides a major corporate reputation risk for businesses operating in or exporting to advanced Muslim markets!

In this academic paper written together with Dr Derry Habir we argue that the halal responsibility is a foremost shared responsibility and concerns different levels of the organisation, namely: top management, risk management, marketing, operations, as well as the internal halal committee.

A company cannot be involved in the halal industry without a proper organisation of halal. This is essential to protecting corporate halal reputation, sales, and licence to operate in its key Muslim (majority) markets.As halal is moving away from a product approach towards a halal supply chain and value chain approach, establishing and maintaining a halal management system is far more complex today than ever before. It is critical for companies to realise that the requirements of the halal certification body are just the bare minimum, focusing on current compliance, but not on developing halal excellence, strengthening the corporate halal reputation, sales, and licence to operate rating in advanced Muslim markets. For a more sustainable halal management system, halal needs to be implemented top down with high involvement of top management, risk management, marketing, and operations.

A halal excellence programme is recommended for senior management to better understand the key fundamentals of halal business management and how halal impacts their business strategy, operations, supply chain, and value chain. Also, technical training is required for key departments’ procurement, manufacturing, logistics, marketing, and risk management.As governments in Muslim (majority) countries are developing new (read: more stringent) halal standards and regulations, halal business management education of the halal industry at business schools will be essential for the new generation of business leaders to be ahead in halal excellence in operations and supply chain management.

Halal performance needs to be systematically measured by companies in order to manage and control a halal management system. For this, a halal risk report could be essential intelligence to feed top management with halal key performance indicators and performance data.With the increasing costs related to halal certification and compliance, companies need to understand the hard impact on their sales and profit. At the same time, policymakers need to measure the perception and response (potentially negative) of the industry to the added costs of halal certification and compliance.

A formal mechanism of cooperation may be needed between industry and government in order to boost halal certification of industries in both Muslim (majority) and non-Muslim countries

The full article is published in the academic journal Islam and Civilisational Renewal published in December 2022, and can be found here.

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