in Legal Success
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Corporate governance is a general definition expressing that companies operating in any business line or field carry out their activities in accordance with the relevant legislation.
Corporate Governance in Turkey, Istanbul
Corporate governance means complying with the rules stipulated in the secondary legislation, especially the Turkish Commercial Code (TCC), in the decision-making processes regarding the activities of the enterprises. Corporate governance in Turkey has become mandatory for companies to follow an effective Corporate Governance Policy and adopt a guide to fulfill their legal responsibilities. So, what is corporate governance? What are the corporate governance principles? How does MGC Legal help with corporate governance in Turkey?
What is Corporate Governance?
Corporate governance, which started to become widespread in the 2000s, has entered the agenda of the commercial ecosystem over the years. In a broad sense, the Corporate Governance System, frequently encountered in legal, administrative, and academic studies, refers to a system in which institutions, organizations, or commercial enterprises are managed, and their activities are supervised.
It appears to indicate, in a narrow sense, the management of companies within the framework of the rights of the shareholders. Companies’ Board of Directors (BoD) is responsible for corporate governance. In this context, corporate governance in Turkey is the whole system that regulates the relations between shareholders and senior managers of the company.
What Are The Corporate Governance Principles?
The management of corporate companies has a systemic structure. The parts of the system are the roles that make up the whole system. In this system, the duties of everyone or each unit are defined. In this context, the concept of corporate governance comes into play.
Creating an organizational structure in line with the mission and vision of the company, making internal arrangements per the targets, distributing the authorities and responsibilities with a professional management approach, and establishing a management structure under legal processes or standards are the factors that serve corporate governance principles. In this context, corporate governance principles are as follows;
● Fairness: This means treating the shareholders equally. Factors such as protecting shareholders’ rights and contract compliance are related to the principle of fairness.
● Transparency: This refers to sharing information about the company’s activities with the public. It is related to factors such as compliance with international accounting principles.
● Accountability: This refers to disclosing the results of company activities and practices. It is related to factors such as establishing independent control systems for evaluating corporate governance performance.
● Responsibility: This refers to the determination of the responsibilities of the company management towards all stakeholders. It is related to the factors to carry out the law and legislation activities and appoint independent members of the BoD.
These principles are linked to many processes, from company performance to achieving goals. Fulfilling these principles indicates the value placed on the company, employees, and shareholders.
What Are The Services Provided in Corporate Governance?
MGC Legal supports its corporate clients in preparing applicable compliance rules and policies between shareholders and board members. It provides professional corporate management consultancy services by communicating with the team working in companies in this field.
MGC Legal’s Corporate Governance Services in Turkey, Istanbul
● Internal Circular: The internal circular is prepared for the company’s general assembly and BoD. In this context, the internal circular prepared based on the rights and trust of the shareholders and managers fully complies with the company’s duties and obligations.
● Grievance Mechanisms: The company’s policy documents and code of conduct are prepared. In this framework, the focus is on reducing the risks to managers. Necessary grievance and adjustment mechanisms are established to prevent the emergence of further liability and address any negative behavior in the company.
● Shareholder Agreements: A shareholders’ agreement is prepared to regulate relations related to the company’s management, especially to avoid financial problems while voting. Mechanisms are put forward to strike a balance between the rights of majority and minority shareholders.
● Supplementary Agreements: In addition to the companies’ provisions in the Articles of Association (AoA), to be valid and binding between the shareholders. Drag, tag, call option, put option, and right of first refusal contracts are issued.
● Notifications: Notifications are made to the relevant authorities on issues such as the appointment of the board of directors members, capital increase, single partnership structure, or change in the company type. Support is also provided in transactions such as the registration of the minutes and resolutions prepared by the company bodies with the relevant trade registry, obtaining the necessary permits, and making the necessary notifications to the public authorities such as the Capital Markets Board (CMB) and the General Directorate of Foreign Capital.
● Services for Foreigners: Services such as establishing a company in Turkey, company secretarial services, keeping books in accordance with the law, and keeping company books are provided for foreign clients. Also, support is provided in matters such as convening the ordinary general assembly once every financial year, notifications to the relevant authorities, and making proper and regular statements.