EBRD promotes enhanced corporate governance of companies listed on Borsa İstanbul

By Olga Rosca
@olgarosca

EBRD promotes enhanced corporate governance of companies listed on Borsa İstanbul

Bank joins forces with Turkish Capital Markets Board

The European Bank for Reconstruction and Development (EBRD) and Turkey’s Capital Markets Board have joined forces to foster corporate governance of companies whose shares are admitted to trading on the regulated market.

The initiative aims to strengthen the capacity of the Capital Markets Board, the regulatory and supervisory agency of Turkey’s financial markets, to monitor the fulfillment of mandatory corporate governance standards by companies listed on Borsa İstanbul and their reporting on the implementation of voluntary principles.

The rules recently made mandatory address, among other topics, board composition; board committees; board approval; structures to facilitate an independent board; and procedures for recruiting new directors.

The implementation of other best practices remains on a “comply or explain” basis. This means that listed companies have to make their disclosures in accordance with the guidelines on these practices. Where a governance practice differs from the guidelines, a company must explain the deviation.

With the help of consultants Nestor Advisors Ltd. and Ünsal Gündüz, both hired by the EBRD, the regulator will review the corporate governance structure and practices of listed companies. Nestor Advisors is a specialist corporate governance consultancy based in London while Ünsal Gündüz is corporate law firm with headquarters in Istanbul.

The consultants will develop and implement a methodology to assess the corporate governance practices of listed companies, monitor their reporting practices, review the quality of compliance statements and produce the disclosed information in reader-friendly reports. They will also prepare a set of guidelines to help listed companies implement the best principles of corporate governance and assist the Capital Markets Board in monitoring their compliance.

Enhancing corporate governance at listed companies is part of the EBRD’s broader effort to help develop Turkish capital markets through investment, advice and support for reforms.

The Bank started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep.

To date, the Bank has invested over €6.8 billion in Turkey through more than 170 projects in infrastructure, energy, agribusiness, industry and finance. It has also mobilised about €16 billion for these ventures from other sources of financing.