Turkey: Communiqué On Corporate Governance II

In accordance with the provisions of the Turkish Commercial Code No. 6102 ("TCC") and the Capital Markets Law No. 6362, the Communiqué on Corporate Governance II No:17.1 ("Communiqué") which abolished the Communiqué on the Determination and Implementation of Corporate Governance Rules (Series IV, No. 56) and the Communiqué on Principles to be Complied with by Joint Stock Companies subject to the Capital Markets Code (Series IV, No. 41), was published in the Official Gazette dated 03.01.2014 and numbered 28871. Other provisions of the Communiqué have been examined in our Newsletter article entitled "Communiqué on Corporate Governance I" and therefore, the subject of this Newsletter article is exclusively the examination of the principles prescribed in the Communiqué.


The Communiqué provides the corporate governance principles within its Annex-1 following the regulations of security issues by companies and transactions of related parties. It shall not be considered obligatory to follow all the principles as some of them are merely meant for guidance. The compulsory principles are enumerated in the Communiqué and these are mostly related to the protection of shareholders rights and the functioning of company decision maker mechanisms, especially the Board of Directors, in a transparent, independent and accountable manner. Where there is a violation of the compulsory principles, the Capital Markets Board ("the Board") has the authority to take measures to enforce compliance with the principles and to seek cancellation of the relevant transaction.

Protection of Shareholder Rights

The protection of shareholders rights shall be realized mainly through providing clear and efficient information, and the encouragement of participation in general assembly meetings.

The organs of the company and the investor relations department shall act effectively in order to insure the protection of shareholders rights and the facilitation of their usage. The corporate website of a company shall contain updated information on facts that would potentially affect the shareholders' rights.

The procedures relevant to General Assembly ("GA") meetings and resolutions, which are important for the usage of shareholders rights, are provided in Art. 1.3 in the Communiqué Annex. Some provisions of the GA meetings must be compulsorily followed. Pursuant to Art. 7 of the Communiqué, regarding enforcement, the Board may seek cancellation of the transaction, which is in violation of the obligation of compliance. To sum up the principles relevant to the GA, the convocation announcement must be detailed and comprehensible, and issues which may affect the usage of rights or create changes in the administration or activities must be highlighted. The Communiqué places focus on the pertinent issues in this respect. The meeting shall be conducted in an independent manner in order to transmit the items of the agenda to the shareholders and shall effectively encourage their participation. Further, pursuant to Art. 1.3.9, transactions that would affect the company's financial situation, due to their volume, necessarily require the majority of votes of non-executive members in order to be executed. In case said resolution is not adopted unanimously by members of the Board of Directors ("BoD"), it shall be approved by the GA and disclosed via the Public Disclosure Platform ("KAP").

Public Disclosure and Transparency

In addition to the information that shall mandatorily be disclosed pursuant to the legislation, a company's corporate website shall contain information important to stakeholders; such as information on privileged shares, current shareholding and management structure, the latest version of the articles of association, policy of profit distribution and financial statements.

Preferrably the the corporate activity report should contain information on subjects relevant for the independent decision making mechanisms of the company, such as reciprocal shareholdings, important lawsuits brought against the company and the activities of BoD members outside the scope of the company.

Protection of Stakeholders

In the Communiqué, the stakeholders are defined as institutions and special interest groups having a relationship with the company, such as employees, creditors, clients, suppliers, unions and several non-governmental organizations.

In case of violation of rights of the stakeholders, the principle of efficient and rapid compensation and the principle of taking measures in order to facilitate notification of the violating transactions to the BoD committees shall be followed.

Furthermore, models shall be developed in order to encourage the participation of stakeholders in the company's administration without prejudice to the company's activities and conduct.

Board of Directors

The activities of the BoD shall be conducted in a transparent, accountable, fair and responsible manner. The Board of Directors shall consist of at least five members. The majority shall be non-executive members. At least one-third, and in any case two members, of the Board of Directors shall be non-executive members.

The criteria for non-executive members are provided in detail in Art. 4.3.7, and require that the relevant person shall not have any material or personal connections to the company, and shall have the necessary professional abilities to perform said duty.

In the articles of association, the authorities of the president of the BoD and chief executive officer/general director shall be distinguished and be specified in the articles of association. Where it is decided that the same person shall perform these duties, it shall be disclosed in the KAP with relevant justifications.

Issues such as appointment of non-executive members and for the loss of status of independent members have been regulated with compulsory procedures to followed. It is also compulsory that companies aim to achieve 25 % female membership within their BoDs and actively develop a policy to this end.

Board of Directors Committees to be Established

The "Audit Committee", "Early Detection of Risk Committee", "Corporate Governance Committee", "Nomination Committee" and the "Compensation Committee" must be established for the effective functioning of the BoD. The working principles and members of the committees shall be declared in the KAP. Each committee shall have at least two members. The majority of the committee members must be non-executive directors, and if a committee has only two members then they must both be non-executive directors.

The compensation of members of the BoD and managers must be in writing and approved by the General Assembly. The corporate compensation policy must be included on the company website. The independent BoD members shall not be compensated with profit share, share options or performance based compensation plans; their compensation must be realized in a manner that will maintain their independence.


The Communiqué consists of guidance principles rather than obligatory rules. Nevertheless, issues that bear importance for the maintenance of transparency and accountability are regulated with obligatory provisions, and transactions that may be risky are subject to public disclosure rather than prohibition.

However, companies must pay attention to these rules, as non-compliance may result in the cancellation of the relevant transaction, and therefore the nullification of the resolutions of decision making bodies for procedural non-compliance; for example, regarding the assembly of the relevant body.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Erdem & Erdem Law
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Erdem & Erdem Law
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions