TÜRKIYE Law and Practice Contributed by: Selim Keki, Çisem Altundemir and Erkin Tuzcular, Balcıoğlu Selçuk Eymirlioğlu Ardıyok Keki Attorney Partnership
Independent Board Members Furthermore, an independent board member in a listed company must meet certain criteria to ensure impartiality and ability to act in the best interests of the company and its stakeholders. Most prominent amongst these independence criteria are: • no employment or significant ownership ties to the company, its controlling shareholders or related entities within the past five years; • no significant commercial relationships with the company or related entities within the past five years; • possessing the necessary education, knowl - edge and experience to fulfil their duties effectively; • not working full-time in public institutions, except for university faculty positions; • being a resident of Türkiye; • demonstrating strong ethics, possessing a professional reputation, and having the ability to maintain impartiality in conflicts of interest; • having sufficient time to dedicate to the company’s business and fulfil their responsi - bilities; • serving on the company’s board for no more than six years within the past decade; • serving as an independent board member on no more than three companies controlled by the same shareholders and no more than five public companies in total; and • not being registered as a board member rep - resenting a legal entity. 4.6 Legal Duties of Directors/Officers A board member has the following obligations stipulated by law, for both JSCs and LLCs: • the duty to act diligently; • the duty of loyalty;
acting in specific, regulated sectors, such as payment institutions and banks, must fulfil spe - cific criteria set out under the related legislation (such as specific higher education achievement or not possessing a criminal record). 4.5 Rules/Requirements Concerning Independence of Directors Standard Board Members The board members of a JSC are prohibited from: • participating in deliberations concerning matters in which a conflict of interest exists between themselves or their relatives and the company; • entering into transactions with the com - pany in their own name or on a third party’s account without obtaining the permission of the general assembly; • becoming indebted to the company in cash (unless they are shareholders); or • competing with the company, unless the gen - eral assembly gives its consent otherwise. Board members of an LLC are prohibited from engaging in activities which compete with the company, unless provided otherwise in the arti - cles, or if all shareholders consent in writing. For listed companies, in the event that control - ling shareholders, board members, executives and their close relatives engage in a significant transaction that may cause a conflict of interest with the company, such transactions must be recorded in the general assembly minutes. The same requirement applies if the board members conclude business transactions or enter into partnerships falling into the company’s field of activity.
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