Corporate Governance
Corporate Governance Take-Home Exam
Compare Turkish Corporate Governance system with the systems in USA, Japan and EU.
1. Who is in charge?
2. Board structure, independence of members of the board, board committees
3. Board and executive remunerations
4. Shareholders rights and ownership rights
5. Related party transactions
6. Ownership structures
The OECD sets general principles about corporate governance; nevertheless, in different companies corporate governance is not handled in the precisely same. Mainly, there are two dominant approaches among advanced industrial countries which are Anglo-American Approach and Stakeholder Approach.
Board Structure:
Anglo-American type of corporate governance, which is also called “shareholder system”, is primarily used in the United States and, with modifications, in the United Kingdom and Ireland. In this approach maximizing shareholder value and look after and shareholder interests, seeking profitability and efficiency is the most important issues. The other is the stakeholder system which also has been called as the “communitarian” governance system. This mode mainly prevails in Germany, France and most emerging economies. This approach is more interested in looking after all stakeholder and public interests. They are less concerned than Anglo-American Approach about short term profit; they look for long term growth and stability.
One of our main issues is where Turkey stands between them. Presence of the single tier-board structure or two-tier board structure is one of the main differences between two approaches. In single-tier board system which belongs to the Anglo-American approach, executive and nonexecutive directors sit together. In the US corporate governance system, executives report to the non-executives regarding the day to day business of the company. Chairman works closely with CEO and there are board committees for audit, remuneration and nomination. In addition, there is not a size requirement for the
Compare Turkish Corporate Governance system with the systems in USA, Japan and EU.
1. Who is in charge?
2. Board structure, independence of members of the board, board committees
3. Board and executive remunerations
4. Shareholders rights and ownership rights
5. Related party transactions
6. Ownership structures
The OECD sets general principles about corporate governance; nevertheless, in different companies corporate governance is not handled in the precisely same. Mainly, there are two dominant approaches among advanced industrial countries which are Anglo-American Approach and Stakeholder Approach.
Board Structure:
Anglo-American type of corporate governance, which is also called “shareholder system”, is primarily used in the United States and, with modifications, in the United Kingdom and Ireland. In this approach maximizing shareholder value and look after and shareholder interests, seeking profitability and efficiency is the most important issues. The other is the stakeholder system which also has been called as the “communitarian” governance system. This mode mainly prevails in Germany, France and most emerging economies. This approach is more interested in looking after all stakeholder and public interests. They are less concerned than Anglo-American Approach about short term profit; they look for long term growth and stability.
One of our main issues is where Turkey stands between them. Presence of the single tier-board structure or two-tier board structure is one of the main differences between two approaches. In single-tier board system which belongs to the Anglo-American approach, executive and nonexecutive directors sit together. In the US corporate governance system, executives report to the non-executives regarding the day to day business of the company. Chairman works closely with CEO and there are board committees for audit, remuneration and nomination. In addition, there is not a size requirement for the
References: Lecture Notes & Slides In the Corporate Governance Factbook, February 2014 Corporate Governance In Turkey In The Light Of The Major Systems, Ali Köşklü Corporate Governance Principles (Capital Markets Board Of Turkey / CMB), June 2003