ISE REVIEW

Principles of Corporate Governance in the Capital Markets

Meral Varış & Ali Küçükçolak & Oral Erdoğan & Levent Özer

Abstract

This paper aims to study in detail the principles and the practices of corporate governance at the Istanbul Stock Exchange (ISE) and in the Turkish capital markets, in reference to the OECD corporate governance principles. The fundamental concepts that relate to the principles of corporate governance are examined on the basis of the OECD corporate governance principles and standards. In the section of this study which relate to the Turkish capital markets, the provisions stipulated in the Turkish Commercial Code and the Capital Market Laws are compared in order to reveal the regulations that pertain to the principles of corporate governance and thus the differences from the OECD principles are determined. The last section covers a questionnaire based on the practices of corporate governance principles by the respondents, namely the ISE member firms and companies listed on the ISE, and a statistical evaluation of the findings. Based on the findings, the relationship between corporate governance and profitability and financial structure of companies that implement the principles of corporate governance is examined on the basis of the manufacturing and financial sector companies as well as for the overall market including all companies. The relationship between corporate governance and the financial performance of the ISE member firms is also analyzed. The level of participation at the general assembly meetings, dividend distribution policies and share owning structure of board members are also evaluated within the scope of the questionnaire.  

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