TÜRKIYE Law and Practice Contributed by: Selim Keki, Çisem Altundemir and Erkin Tuzcular, Balcıoğlu Selçuk Eymirlioğlu Ardıyok Keki Attorney Partnership
The board may delegate all of its delegable authority or a part of it to one or more directors or a third person with an internal directive if the articles of association of the company contain a provision allowing this. Management authority belongs to all the members of the board, taken in their entirety, unless specific arrangements and delegations are made. 4.3 Board Composition Requirements/ Recommendations The boards of JSCs and LLCs can have one or more members. For an LLC, at least one share - holder must be a manager (and thereby a mem - ber of the board). There is no such requirement for the board of a JSC. Listed companies must have at least five board members. At least half of the board must consist of non-executive board members. One third of the board of directors of a listed company must consist of independent board members. Inde - pendent board members are also deemed non- executive board members. However, depending on the corporate governance group of the com - pany or whether an exemption is granted by the CMB for the specific company, having only two independent board members regardless of the head count of the board of directors may suffice. The board members may be foreign or Turkish nationals, and legal entities or real persons. The number of members on a board may be even or odd. Board members do not need to be employ - ees of the company, but they can be. For companies operating in specially regulated sectors, such as banking, the minimum number of, and other requirements for, board members can be specifically set out in the related legis - lation. Therefore, each company’s board struc -
ture must be determined in compliance with the related applicable legislation. 4.4 Appointment and Removal of Directors/Officers At incorporation, the initial board members must be appointed by being named in a temporary article of the articles of association. Board members (and managers) are appointed and removed by the general assembly, at the lat - ter’s full discretion. However, if a board member of a JSC resigns, assuming that the remaining members still constitute a quorum for the board to take decisions, such remaining members can appoint an interim member, whose appointment would be approved and made permanent at the next general assembly meeting. Appointment of independent board members in listed companies follows a different procedure. Independent board members must fulfil certain independence criteria. The nomination com - mittee identifies candidates suitable for inde - pendent board members and submits them to the board of directors. If the board of directors approve the names, it then submits the pro - posed names to the CMB for comment. If the CMB does not disapprove of the names, the proposed independent board members may be appointed by the general assembly. If a legal entity is appointed as a board mem - ber (or manager), it must designate one natural person representative to act on its behalf. The representative will be registered with the Trade Registry. Generally, anyone may be appointed as board member. But some negative qualification criteria do exist (such as not being insolvent or incapaci - tated). Also, the board members of companies
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