Corporate Governance and General Assembly Meetings under the Turkish Commercial Code

Corporate governance plays a critical role in ensuring transparency, accountability, and efficiency in joint stock companies (JSCs). In Turkey, the Turkish Commercial Code (TCC) provides a comprehensive legal framework for corporate governance, including the rules and regulations governing General Assembly (GA) meetings. This article explores the core principles of corporate governance under the TCC, the role of the GA, and the recent amendments impacting these procedures.

• The Board of Directors (BoD) is the primary executive body in a JSC, responsible for managing the company's affairs. Directors are elected by the shareholders during the General Assembly.
• Duties and Liabilities: Board members have fiduciary duties to act in the best interests of the company and its shareholders, and they may face legal consequences for breaches of these duties.
• Recent Amendment: As of 2024, the annual election requirement for the Chairman and Vice Chairman of the BoD has been removed. Now, these positions are elected for the same term as the Board of Directors itself

• The TCC mandates disclosure of financial statements, audit reports, and any material changes in the company’s operations. Shareholders have the right to access critical financial information before the General Assembly meetings.

• Companies are required to implement internal control mechanisms and risk management systems, ensuring that risks are identified and managed effectively.

• Ordinary GA Meetings: Held annually to discuss financial statements, profit distribution, and board elections.
• Extraordinary GA Meetings: Called when there are urgent matters that require immediate attention, such as mergers or capital increases.

• Notice and Agenda: The BoD must notify shareholders about the meeting, at least 15 days in advance, providing the meeting agenda, financial reports, and other relevant documents.
• Quorum Requirements: The meeting must have a quorum, typically representing a certain percentage of the company's share capital. If the quorum is not met, the meeting is adjourned, and a second meeting with lower quorum requirements is scheduled.
• Voting Rights: Shareholders have the right to vote on matters listed in the agenda, either in person or through a proxy.

• Digital GA Meetings: In line with technological advancements, the TCC now allows companies to hold GA meetings online, enabling shareholders to attend and vote remotely​.
• Shareholder Inspection Rights: Shareholders have the right to request detailed financial reports and audit results, ensuring transparency in decision-making.

• Minority shareholders, holding at least 10% of the share capital, can request an extraordinary GA meeting or add items to the agenda. This ensures that minority shareholders have a voice in the decision-making process.

Shareholders who believe that the decisions made during the GA violate their rights or the company’s articles of association can file a lawsuit within three months to challenge the decisions.

Corporate governance and General Assembly meetings under the Turkish Commercial Code provide a robust framework to protect shareholder rights and ensure transparency. The recent amendments, including the ability to hold digital GA meetings and updates to the roles of the board, reflect the evolving corporate landscape in Turkey.