a)
General
The board of directors and management (to the extent delegated) are authorized to make decisions regarding the business and transactions of the Company apart from those which are subject to the authority of the general assembly in accordance with the articles of association and the new TCC.
b)
Non-delegable and indispensable
duties of the board of directors
The board of directors' non-delegable and
indispensable duties and powers cannot be delegated to a third party or even to
the general assembly. These duties and powers are as follows:
- Top level management of the company and giving instructions in this regard,
- Determination of the management organization,
- Establishment of the necessary system for accounting and internal audit as well as financial planning (the financial planning mechanism is established to the extent required for the management of the company),
- Appointment and dismissal of managers and persons performing the same function and authorized signatories,
- Oversight of management if they comply with law, articles of association, internal regulations and written instructions of the board of directors,
- Keeping share book, resolution book of the board and book of general assembly meeting and discussion, the preparation of the annual report and corporate governance disclosure and submission of them to the general assembly, the organization of general assembly meetings and execution of general assembly resolutions,
- Notifying the court regarding the insolvency of the company.
c)
Going concern uncertainties and
bankruptcy
(i) Liability to call general assembly and notify
- If the last annual balance sheet indicates that half of the sum of the paid-in capital and reserves is lost as a result of accumulated losses, the board of directors must immediately summon the general assembly and submit the remedial measures.
- If the last annual balance sheet indicates that two thirds of the sum of paid-in capital and reserves is lost as a result of accumulated losses, the board of directors must immediately summon the general assembly. If the general assembly does not decide to fully supplement the capital or to be satisfied with one third of the capital, the company may automatically terminate.
- In the case where there are going concern uncertainties as the company's liabilities exceed its assets, the board of directors prepares (a) an interim balance sheet based on going concern principles and (b) an interim balance sheet based on the liquidation method. If the related assets are not sufficient to cover the receivables of creditors of the company, the board of directors must notify the commercial court of the first instance at the location of the company's headquarters of this situation and must claim for bankruptcy of the company provided that before the bankruptcy decision, the creditors whose receivables total to the amount adequate to cover the company's deficit and to eliminate the state of excess of liabilities over assets, must accept in writing to be ranked after all other creditors and that the legitimacy, authenticity and validity of this declaration is verified by experts assigned by the court. Otherwise, the application made to the court for an expert inspection must be considered as notification for bankruptcy. When management comes back with an explanation of the impact of the uncertainty and what the impact would be on the financial statements and the disclosures, then the accountant evaluates the reasonableness of that information.
(ii) Postponement of bankruptcy
The board of directors or any creditor may request the postponement of bankruptcy by presenting a plan to the court that may indicate the objective and actual sources and measures including the new capital contribution in cash.
d)
Risk management
In accordance with the new TCC the board of directors of listed companies is obliged to establish a committee to detect and manage risks that may cause a going concern problem for the company. The board of directors is also obliged to run and develop the risk detection and management system.
In other companies, this committee (if deemed necessary and the board of directors are notified in writing by the independent auditor) must immediately be established and the committee must submit its first report at the end of the month following its constitution.
The committee submits its report to the board of directors bimonthly. In the report the committee evaluates the situation and shows the dangers and the related remedies. The report should also be sent to the independent auditor.
e)
Company's acquisition of its
own shares
The company may acquire its own shares or accept as a pledge up to a maximum of 10% of the company capital. For this acquisition, the general assembly must give an authorization to the Board with respect to this matter. This authorization is exercised within a maximum of 5 years by the Board. The authorization indicates the lower and upper limits which may be paid for shares to be acquired and the total nominal values of the shares to be acquired or accepted as a pledge.
Furthermore, after the prices of the shares to be acquired are deducted, the company's remaining net assets must be at least equal to the sum of basic or issued capital and the reserves which are not allowed to be distributed in accordance with the articles of association and the law.
The aforementioned provisions may also be applied in the acquisition of the parent company's shares by its subsidiary. The Capital Market Board can make regulations on the grounds of transparency and the price pertaining to the companies whose shares are listed in the stock exchange.
The new TCC also regulates the following matters regarding the joint stock company's acquisition of its own shares and acceptance as a pledge:
- Prevention of an imminent and serious loss,
- Gratuitous acquisition,
- Disposal of acquired shares,
- Disposal in case of an acquisition contrary to the law,
- Shares that cannot be disposed of to be redeemed through capital decrease,
- Prohibition of subscription of its own shares,
- Exercise of rights in the general assembly meeting quorum.
