In Winter 2002 , we presented an article on TÜSIAD’s1 efforts in introducing a Corporate Governance Code of Best Practice that aims to provide guidelines for professionals and corporations in connection with the effective application of corporate governance principles by Turkish companies. Within the scope of these efforts, a number of select businessmen and lawyers have recently founded the Corporate Governance Association2 in order to pioneer the establishment, adoption and development of the principles of corporate governance in Turkey.
The Corporate Governance Association plans to organize meetings and seminars aimed at educating Turkish companies on corporate governance and to cooperate with authorities such as the Capital Market Board and the Istanbul Stock Exchange. The purpose of these meetings is to ensure that as many Turkish companies as possible, including both publicly and closely held companies, practice the internationally accepted principles of corporate governance. Another goal of the Corporate Governance Association is to guide Turkish companies and professionals wishing to adopt corporate governance principles and provide assistance when needed.
The Corporate Governance Association is determined to effectuate a change in the traditional governance practices currently employed by Turkish companies. In this respect, the Corporate Governance Association is carrying out studies and research with the purpose of assisting in the establishment of a more suitable legal environment for the implementation of the four corporate governance principles of fairness, transparency, accountability, and responsibility.
In line with the studies of the relevant administrative commission, the Turkish Commercial Code (the "TCC"), is likely to be amended and updated within the next few years to cope with the changing needs of the market players. As a significant support to the Corporate Governance Association’s efforts, it is anticipated that some of the amendments to be made to the TCC will ease the establishment of the basic corporate governance principles. It is expected that internal committees, ethic codes, minimum education levels for board members and similar corporate governance related concepts will be introduced with the updated TCC. Parallel with these studies, the Capital Market Board’s Program for the Year 2003 includes plans for the introduction of a Best Practice Code. Accordingly, the Capital Market Board issued a Communiqué on the Rules Regarding Cumulative Voting in the General Assembly Meeting of Shareholders of Joint Stock Corporations Subject to Capital Market Law in order to ensure board representation for larger minority shareholders in publicly held companies which will adopt cumulative voting in their articles of association.
As an eventual outcome of all of these efforts, implementation of corporate governance principles in Turkey will improve in line with the individual needs of each company, taking into consideration their unique structural, cultural and strategic values and procedures.
1. The Turkish Businessmen and Industrialists Association.
2. Kurumsal Yönetim Derneği.
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