Corporate governance is a concept that gained importance in the world in the early 1980s. In the 1980s, the statist economy was abandoned and the place of private sector organizations in the economy began to be strengthened. With the strengthening of the place of private sector organizations in the economy, corruption in joint stock companies and subsequent bankruptcies have forced all western countries, particularly the USA, to address corporate governance principles. The corporate scandals and the related economic crises have revealed the need to find new ways to prevent failures in corporate management. With the recent economic crisis, it has been observed that enterprises that work systematically both in terms of management and finance can survive. As a result of the fact that the quality of management of enterprises has come to the forefront as a new criterion in addition to their financial status and the importance of management quality has gradually increased, the content of the concept of good management has started to be questioned.
Corporate governance is the combination of laws, regulations and related voluntary private sector practices that enable a company to attract financial and human resources, to operate efficiently, and thereby to stabilize and generate long-term economic benefits for its shareholders, without prejudice to the interests of stakeholders and the public. Not only company shareholders but also other stakeholders are affected by the company's activities; in order to protect the rights of other stakeholders, certain basic conditions must be fulfilled. Auditing of company activities, equal and fair treatment to shareholders, protection of the rights and obligations of shareholders and other stakeholder groups, public disclosure and determining the methods of doing business by clearly setting out the duties and authorities of the boards of directors are among the basic conditions for establishing an effective governance approach. With the corporate governance approach, not only the interests of the company's shareholders are taken into consideration, but also the interests of other stakeholders.
Article 1529 of Turkish Commercial Code numbered 6102 ("TCC") requires the implementation of corporate governance principles in publicly held companies. TCC stipulates that the principles of the board of directors' disclosures on corporate governance and the rules and results of the rating of companies in this respect shall be determined by the Capital Markets Board ("Board"). With the reference made in the TCC, Article 17 of the Capital Markets Law numbered 6362 ("CML") stipulates that in publicly-held corporations, the procedures and the principles regarding corporate governance principles, the content and publication of corporate governance compliance reports, the rating of compliance of corporations with corporate governance principles and the independent memberships of board of directors shall be determined by the Board. The Board shall use this authority in a manner that would not result in unfair competition among publicly-held corporations and by considering the principle of applying equal rules to equivalent corporations.
Considering their qualifications, the Board is authorized to require publicly held corporations the shares of which are traded on the exchange to comply with corporate governance principles partially or completely, to establish the principles and procedures regarding these, to take decisions providing the fulfillment of the compliance obligation in a given time period and to take actions ex officio in this regard in cases where the compliance requirement is not fulfilled, even where a time period is not given to request cautionary injunction for the determination of activities inconsistent with the compliance obligations or their cancellation being exempt from all kinds of guarantee, to file a lawsuit, to request for a court decision that will result in the way that lead to the fulfillment of the compliance obligation, to establish the procedures and principles regarding the execution of those operations.
In addition to Article 1529 of the TCC, the last sentence of paragraph 1 of Article 360 of the TCC states that "Regulations regarding independent board members are reserved". Thus, independent board membership, which reflects corporate governance, is legally justified.
Pursuant to paragraph 2 of Article 1529 of the TCC, it is regulated that other public institutions and organizations may also make limited detailed regulations on corporate governance principles that may only be applicable to their own fields, provided that the Board's consent is obtained. Non-publicly traded companies are not obliged to apply independent governance principles and appoint independent members.
The Board issued the Communiqué on Corporate Governance numbered 17.1 ("Communiqué") on corporate governance. The purpose of the Communiqué is to regulate the corporate governance principles to be adopted by stock exchange companies. The Communiqué defines stock exchange companies as public joint stock companies whose shares are traded on the Istanbul Stock Exchange. The Communiqué regulates the corporate governance principles that stock exchange companies are obliged to implement in detail in Section II. Article 5 of the Communiqué lists the principles that must be implemented by stock exchange companies.
The corporate governance principles annexed to the Communiqué introduce regulations on shareholders, public disclosure and transparency, stakeholders and the board of directors. With respect to shareholders, there are regulations that facilitate the exercise of shareholders' rights, including shareholders' rights to obtain and review information, rights to attend the general assembly, voting rights, minority rights, dividend rights and transfer of shares. This part also addresses the issues of keeping proper records of shareholders, free transfer and sale of shares, and the principle of equal treatment to shareholders. With the regulations regarding shareholders in the Communiqué, it has been determined as a requirement of good corporate governance to respond to the problems of shareholders in an accurate and timely manner and to resolve the problems of shareholders.
Regarding public disclosure and transparency, principles and tools of public disclosure are determined. It is regulated that the company's website should be actively used for public disclosure and the information on the website should be regularly updated. It is stated that the activity report to be prepared by the board of directors should be in detail to ensure that the public has access to complete and accurate information about the activities of the company and the issues that should be included in the activity report. Thus, it is aimed to provide shareholders and stakeholders with timely, accurate, complete, comprehensible, analyzable, easily accessible information at low cost in a manner to protect the rights and benefits of the company.
Stakeholders are defined in the annex of the Communiqué as persons, institutions or interest groups such as employees, creditors, customers, suppliers, trade unions, various non-governmental organizations that have an interest in achieving the company's objectives or activities. It is regulated that companies should protect the rights of stakeholders regulated by legislation and mutual agreements in their transactions and activities, and in this context, it is regulated that companies should establish a company policy and human resources policy regarding stakeholders and support the participation of stakeholders in company management. It is understood that one of the basic understandings of corporate governance with the principles regarding stakeholders is that the interests of stakeholders other than shareholders should be given importance in the management of the company and it should be ensured that the relations with the company are developed in a good manner.
The corporate governance principles annexed to the Communiqué are mostly related to the board of directors. The Communiqué contains detailed regulations on the function of the board of directors, its operating principles, structure, meeting procedures and committees established within the board of directors. It is regulated that the board of directors should include both executive and non-executive members. Non-executive board members are persons who are not involved in the daily workflow and ordinary activities of the company. The only administrative duty in the company should be to serve as a member of the board of directors. Paragraph 4.3.3 of the Communiqué stipulates that "Among the non-executive members of the board of directors, there shall be independent members who are capable of performing their duties without being influenced under any circumstances". Independent board membership is important within the framework of corporate governance principles. Thus, with an independent board member, it is aimed to carry out the activities of the board of directors in a fair, transparent, responsible and accountable manner within the scope of corporate governance principles. In this framework, not only the shareholders of the company are protected, but also the shareholders' own interests are prevented from overriding the interests of the company and other stakeholders are protected in accordance with transparency.
Corporate governance principles eliminate the transparency problems of companies, prevent companies from becoming unreliable in the eyes of local and foreign investors, increase the competitiveness of companies in foreign markets, facilitate access to capital and partnership structures with foreign investors, and make significant contributions to improve the investment environment in the country. With the Communiqué established by the Board, the implementation of corporate governance principles by companies is increased and companies are ensured to maintain their economic existence properly.
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