Corporate Governance
"What corporate governance requirements apply to Turkish companies?"
Quick Answer
Corporate governance in Turkey is primarily shaped by the Turkish Commercial Code No. 6102 (board and shareholder structure, duties of directors, general meeting procedures, reporting), while publicly held companies are also subject to Capital Markets Board (CMB/SPK) corporate governance rules, which may require independent board members and board committees.
Key Aspects Under Turkish Law
Under the Turkish Commercial Code (TCC) No. 6102, corporate governance for Joint Stock Companies (A.Ş.) and Limited Liability Companies (Ltd.) relies on distinct organs: the General Assembly of Shareholders (decision-making) and the Board of Directors/Managers (representation and management). The TCC imposes strict duties of care and loyalty on directors, requiring them to act prudently and in the company’s best interest. It also establishes minority shareholder rights, information access rights, and specific rules for conflict of interest.
While independent audit is mandatory only for companies meeting certain statutory thresholds (asset size, revenue, employee count), all companies must maintain proper commercial books and financial records in accordance with Turkish Accounting Standards where applicable.
Key Points to Remember
- Turkish Commercial Code No. 6102 provides the primary legal framework
- Certain corporate actions (e.g., amendments to articles, appointment of directors, capital changes) may require Trade Registry registration/announcement to be effective against third parties, depending on the transaction.
- Corporate governance focuses on decision-making bodies (general meeting, board of directors/managers), directors’ duties (duty of care and loyalty), representation authority, meeting procedures, record-keeping, and (where applicable) independent audit and capital markets governance rules.
- Proper documentation and corporate formalities are essential
Practical Considerations for Businesses
For private companies, practical governance often revolves around the Articles of Association, signature circulars (defining representation powers), and internal directives. Maintaining a clear separation between shareholder oversight and executive management is critical for liability protection.
Publicly held companies are subject to additional regulations by the Capital Markets Board (CMB/SPK). These may include mandatory compliance with the Corporate Governance Principles (e.g., appointing independent directors, forming audit and risk committees) and stricter public disclosure requirements. Violating these principles can lead to administrative fines and reputational risk.
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