a)
Composition of board
(i) Number and qualifications of members
A joint stock company may have a board of directors which consists of one or more persons assigned by the articles of association or elected by the general assembly. As a result, having a single member board in a joint stock company is possible with the new TCC.
There is no obligation in the new TCC for the members of board of directors to reside in Turkey and to be a Turkish citizen.
(ii) The legal entity as a board member
In the case where a legal entity is elected as a member of the board of directors, only one real person who is determined by the legal entity in the name of such legal entity must be registered and announced along with the legal entity. In addition, the information regarding the registration and announcement must be posted immediately on the company's website. The registered person may only participate in and vote on behalf of the legal entity at the meetings.
(iii)
Representation of certain
groups on the board of directors
In cases where it is stated in the articles of association, certain share groups, shareholders composing a certain group according to their qualities and properties, and minorities may be granted the right to be represented on the board of directors. The shares entitled to be represented on the board of directors in this way are considered as privileged shares.
(iv)
Insurance (Directors and
Officers Liability Insurance - D&O)
There is no requirement in the new TCC with respect to the D&O. In the new TCC there is only a reference to D&O in cases where the joint stock company is a publicly held company. Accordingly, if the joint stock company is a publicly held company and if the damage is incurred as a result of the failings of board members, is insured with a price exceeding twenty five percent of the share capital of the joint stock company, this matter must be announced in the bulletin of the Capital Market Board and the bulletin of the stock exchange. Such matters may be considered in the assessment regarding the compliance with the corporate governance principles.
(v)
Term of office
Board members are elected to hold office for a maximum of three years. Unless otherwise specified in the articles of association, the same person may be re-elected.
b)
Vacancy on the board
If for any reason a vacancy on the board occurs, the board of directors elects a person who should meet the legal requirements as a board member. This election is on a temporary basis. The board submits the elected board member for approval at the first general assembly. The member who is elected in this way performs their duty until the general assembly meeting and in cases where the membership is approved, the elected board member completes the office term of the predecessor.
The board membership automatically terminates in the case where the board member goes bankrupt or loses the legal conditions or the qualifications required to be a member as stipulated in the articles of association.
c)
Dismissal from office
The board members who have been assigned through the articles of association may, at all times, be dismissed from office by the resolution of the general assembly. The legal entity who is a board member may, at any time, replace the person registered in his/her name.
