Corporate governance in Turkey: a pilot study
OECD, Oct 30, 2006 - Business & Economics - 130 pages
It is widely expected that there will be rapid growth in Turkey in the coming decade. This will fuel companies' demand for external finance to expand their businesses or establish new ones. To attract such finance on competitive terms, domestic equity markets need to expand and foreign investment needs to increase. This will happen only if corporate governance standards are high, meaning both a well-established and cost-effective legal and regulatory framework and company practices that favour transparency and the protection of minority shareholders.
This report evaluates the extent to which the OECD Principles of Corporate Governance have been implemented in Turkey, looking at both the legal and regulatory framework as well as company practices. It makes use of a newly developed assessment methodology and, accordingly, is an experimental, pilot study. The report finds that significant reforms to the corporate governance framework have already been introduced, with regulatory authorities playing a leading role in setting and enforcing corporate governance standards as well as fostering market integrity. The report supports additional legislative reforms that are already in progress. Looking ahead, the report argues that it is time to move into the next important phase in policy reform. This will involve systematically monitoring implementation of the new standards, evaluating their impact, focusing enforcement efforts on key corporate governance risk areas and fine-tuning regulatory processes to improve efficiency and balance regulatory costs against expected benefits. It will also be important to facilitate the development of a deeper, domestic equity culture and strengthen market disciplinary mechanisms. The report emphasises that private sector organisations can play a vital role by convincing companies that better corporate governance practices can improve performance and facilitate access to lower-cost external capital, engaging in constructive dialogue with the authorities and raising public expectations about corporate governance practices.
What people are saying - Write a review
List of Abbreviations and Terms
Summary of Assessment and Policy Options
3 other sections not shown