Corporate Governance in Turkey: The Case of Borsa Istanbul 50 Companies

Abstract

Due to the recent global scandals of large corporations in the most developed markets of the world, the competition of emerging markets to attract global FDI and the decreasing returns of the global stock markets, corporate governance is the “hot” topic both in the world and in Turkey. The corporate governance framework in Turkey is characterized by concentrated ownership, often in the form of family-controlled, financial-industrial company groups. Following OECD principles, the Capital Markets Board of Turkey (CMB) published “Corporate Governance Principles of Turkey” in 2003. The principles are applied on a “comply or explain” basis for companies whose shares are listed on Borsa Istanbul (ISE).This chapter focuses on the corporate governance practices of Borsa Istanbul (ISE) 50 companies. Firstly, a general picture of the corporate governance framework in Turkey is provided and secondly, Turkish Corporate Governance Principles are explained. The research section tries to present a clearer picture of Borsa Istanbul 50 firms' corporate governance practices through descriptive statistics. Although many areas are improving in the Turkish corporate governance practice, there remain some challenges ahead according to research results. Board independence for example, is one of the very important areas to be improved for Borsa Istanbul 50 companies.