Corporate Governance: Turkish Transparency And Disclosure Survey 2007
Standard & Poor's Governance Services and the Corporate Governance Forum of Turkey (CGFT) at Sabanci University in Istanbul monitored and assessed corporate response to regulation and market circumstances by conducting the survey over three successive years with the objective of providing a comparative insight into the disclosure practices of Turkish companies.
According to the results of the survey transparency and disclosure practices at leading Turkish companies have improved only marginally since 2006.
Report underlines some important issues for International Investors:
- Companies' articles of association, which were not usually disclosed in the past, are now increasingly becoming available on companies' Web sites as recommended by the Capital Markets Board of Turkey. This is particularly important as the shareholders' rights are primarily governed by the articles of association.
- Some companies have multiple classes of shares, with shareholders' agreements between the
holders of different classes. We observed no disclosure of such agreements.
- Given the typical family ownership structure of Turkish companies, the assignment of the right to nominate board members is particularly important for noncontrolling shareholders. Board nomination is a shareholder right according to Turkish company law. Any voting agreements between major shareholders must therefore be clearly disclosed and/or articulated in the articles of association. Only one company disclosed board nomination processes.
- It is fairly common for representatives (often executives) of holding companies to sit on the boards of subsidiary companies with an explicit mandate to deliver/impose the policies of the holding company. We observed no disclosure of such policies or practices, which raises concerns about the role and effectiveness of subsidiary boards within holding structures.
Lis of Top Performers
Report is available at www.ratingdirects.com and can be requested from cgft@sabanciuniv.edu
According to the results of the survey transparency and disclosure practices at leading Turkish companies have improved only marginally since 2006.
Report underlines some important issues for International Investors:
- Companies' articles of association, which were not usually disclosed in the past, are now increasingly becoming available on companies' Web sites as recommended by the Capital Markets Board of Turkey. This is particularly important as the shareholders' rights are primarily governed by the articles of association.
- Some companies have multiple classes of shares, with shareholders' agreements between the
holders of different classes. We observed no disclosure of such agreements.
- Given the typical family ownership structure of Turkish companies, the assignment of the right to nominate board members is particularly important for noncontrolling shareholders. Board nomination is a shareholder right according to Turkish company law. Any voting agreements between major shareholders must therefore be clearly disclosed and/or articulated in the articles of association. Only one company disclosed board nomination processes.
- It is fairly common for representatives (often executives) of holding companies to sit on the boards of subsidiary companies with an explicit mandate to deliver/impose the policies of the holding company. We observed no disclosure of such policies or practices, which raises concerns about the role and effectiveness of subsidiary boards within holding structures.
Lis of Top Performers
Report is available at www.ratingdirects.com and can be requested from cgft@sabanciuniv.edu
