Corporate Governance in Turkey

Abstract

The Turkish Capital Market Board introduced its Corporate Governance Principles in 2003. The Principles are based on the concepts of equality, transparency, accountability and responsibility. While they are generally modelled on the Corporate Governance Principles of the OECD, they also take into consideration the special needs of Turkish company structures and Turkish company law and practice. The Principles apply on a comply-or-explain basis and contain detailed guidelines on the rights of shareholders, public disclosure and transparency, stakeholders and the board of directors. Listed companies are under an obligation to issue an annual corporate governance compliance report showing the extent of their compliance with the Principles and explaining the reasons for any deviation. The board of directors and the company can be held liable by investors for deceiving them with wrong or misleading information contained in the report. As for the actual implementation of the Principles, surveys indicate that there is room for improvement and that more time is needed for full application.