TKYD Corporate Governance Assessment Report: No Female Members in 26% of Companies
According to the Corporate Governance Rating Report prepared by the Turkish Corporate Governance Association (TKYD) after examining a total of 97 companies, in 2023, 16.4% of the boards of directors in BIST 100 consisted of female members, while 26% of companies had no female members at all. Additionally, 51% of companies had a female member ratio of less than 25%, and in 23% of companies, this ratio was above 25%. On the other hand, the section with the lowest compliance rate was the "Board of Directors," while the section with the highest compliance rate was "Public Disclosure and Transparency."
The TKYD Member Meeting was hosted by the Industrial Development Bank of Turkey (IS: TSKB) at TSKB Paradise Garden on December 23, attended by all corporate and individual members. The executive summary data from the “Corporate Governance Rating Report 2023” was discussed by Prof. Dr. Aylin Ataay Saybaşılı, Director of the Corporate Governance, Audit, and Compliance Studies Application and Research Center (KUYDEM) at Galatasaray University (IS: GSRAY), and Dr. Burak Koçer, Member of the TKYD Board of Directors and Secretary General of Zorlu Holding. During the data analysis phase of the report, KUYDEM and its Director, Prof. Dr. Aylin Ataay Saybaşılı, received significant support from the Central Securities Depository for the analysis of corporate governance data reported to the Public Disclosure Platform (KAP), while the study was led by Dr. Burak Koçer.
The Corporate Governance Rating Report is based on the analysis of the compliance reports provided by BIST 100 companies regarding non-mandatory principles (Compliance Report Format). In the disclosed report for 2023, data shared by companies concerning their corporate governance practices, similar to the years 2021 and 2022, were examined.
Boards of directors consist of 16.4% female members. According to the report, 16.4% of the boards of directors in BIST 100 are composed of female members. It was found that 26% of BIST 100 companies had no female members, 51% had a female member ratio of less than 25%, and 23% had a ratio above 25%. Among the women on the boards of directors, 50% serve as independent members and 41.5% hold non-executive member roles.
The section with the highest compliance rate is Public Disclosure and Transparency. As in previous years, the report for 2023 continued to show a similar level of general compliance with corporate governance principles, with limited increases over the years. The report indicates that the Board of Directors section remained the lowest in compliance level as in past years, while the section with the highest compliance rate was the Public Disclosure and Transparency section. The increase in compliance levels observed in the Stakeholders section continued into 2023.
According to the report, no companies comply with principle 1.5.2, which concerns granting minority rights in cases where their share capital is less than one-twentieth of the total, and expanding the scope of minority rights through regulations in the articles of association. Other principles with relatively low compliance levels include ensuring that general assembly meetings are open to the public without the right to speak for stakeholders and the media, and providing information about all donations and grants in a separate agenda item during general assembly meetings.
Principles with 98% or above compliance levels. High compliance levels of 98% or more were generally observed for principles in this section, including “Content of the corporate website,” “Updating and disclosing information regarding real persons who hold more than 5% of shares at least once every six months,” and “Content of the annual activity report.” Principles such as “Information on the corporate website is prepared in foreign languages with content fully identical to the Turkish version” and “The annual activity report includes all elements specified in principle 2.2.2” also exhibited relatively low compliance levels but showed improvements compared to previous years.
High compliance levels in the Stakeholders Section. With the contribution of the Capital Markets Board's Sustainability Principles Compliance Framework (10.02.2020) and regulations from the Ministry of Labor and Social Security, the increase in compliance rates observed in previous years with principles in the Relationships with Stakeholders section continued. In 2023, the majority of principles in this section achieved high compliance rates. However, despite some increases in compliance levels for certain principles compared to previous years, it was noted that there are still areas for improvement regarding these principles.
In 2023, the following results were recorded for certain principles: “Employee participation in management” was 50%, “Obtaining the opinions of stakeholders in significant decisions affecting them” was 75%, and “Informing employees and their representatives about decisions that may affect them and obtaining the opinions of relevant unions” was recorded at 6%.
The board of directors failed to comply with these two principles. Within the board of directors section, the two principles that companies primarily failed to comply with were “Disclosing individual salaries” and “Each board member serving on only one committee.” On the other hand, “Limiting outside positions of board members” was at 14%, and “Board performance evaluation” was at 35%, which included areas where companies showed low compliance.
272 independent member positions filled by 240 members. In BIST 100, 35 companies are interconnected by 50 common board members. While 780 board positions were filled by 711 members, 272 independent member positions were filled by 240 members.
Among common board members, 30% are independent, 12% are female, and 80% are connected with group companies. 26% hold positions on three or more boards simultaneously. The median board size was determined to be 8 members, down from 9 members in 2022. In 2023, 780 members served in BIST 100 companies, while 35 companies remained interconnected by 50 common board members. The 780 board positions were filled by 711 members, and 272 independent member positions were filled by 240 members. Furthermore, the proportion of independent members on boards has consistently remained at the mandatory level (34.5%) according to regulations over the years, continuing into 2023. The number of companies where the board chairman and the executive chairman (CEO) are the same is 13, compared to 4 companies in 2019, 12 companies in 2021, and 21 companies in 2022.
About TKYD: The Turkish Corporate Governance Association (TKYD), established as a voluntary non-governmental organization in 2003, operates with the mission of promoting the recognition, development, and implementation of corporate governance principles in Turkey with the best practices. TKYD aims to guide all areas affected by corporate governance principles built upon fairness, transparency, accountability, and responsibility, by establishing a communication network among the private sector, public institutions, media, regulators, civil society, and the academic world to enhance corporate governance practices. TKYD is a signatory of the UN Global Compact and a member of the ICGN.