15 Nisan 2011 Cuma

Family firms in Turkey need better corporate governance

Istanbul is set to host the 4th International Corporate Governance Summit, bringing together Turkish executives and international experts. Tayfun Bayazıt, head of Turkey’s Corporate Governance Association, told the Hürriyet Daily News & Economic Review that family-owned companies will be in danger if they do not take steps toward more transparency and better standards of governance
Tayfun Bayazıt of Turkey's Corporate Governance Association says the future of competition depends on transparent corporate governance.

Tayfun Bayazıt of Turkey's Corporate Governance Association says the future of competition depends on transparent corporate governance.
Speaking ahead of a key event on corporate governance, Tayfun Bayazıt, chairman of the Turkey’s Corporate Governance Association, or TKYD, said the future of competition and transparency depend on the issue.
The 4th International Corporate Governance Summit is set to begin in Istanbul on Thursday, where executives from various companies will discuss the changing dynamics in corporate governance following the global crisis. The need for governance principles in family-run businesses is a key theme at the event.

“Family-owned companies should apply corporate governance principles in order to increase competitiveness, achieve higher standards and transparency,” Bayazıt told the Hürriyet Daily News & Economic Review on Tuesday.

“Most of the companies in Turkey are owned and run by families,” Bayazıt said. “Research shows that only 10 percent of these firms will be able to survive until the third generation. Companies that consider expansion and becoming global players have to apply corporate governance rules.”

Principles of corporate governance should not be seen as a “burden on the shoulders of family-run Turkish firms,” according to Bayazıt. “These principles pave the way for a company to function at world standards, rather than remain small or medium enterprises.”

The effects of the global crisis on governance standards will be discussed under the theme of “Where the Equilibrium Forms.” For the first time, the summit will also distribute corporate governance awards, which will be presented according to the corporate governance index of the Istanbul Stock Exchange, or ISE.

Code of Commerce

A draft Code of Commerce plays a crucial role in defining corporate governance principles and achieving sustainable transparency, Bayazıt said. “Thanks to the government and the opposition, the code will be voted on before the general elections due in June.”

There is a strengthening trend of initial public offerings in Turkey, Bayazit said, adding that transparency is highly important for capital markets. “Executives of family-owned and run businesses will gather in a series of meetings across Anatolian cities in this year,” he continued. “Many younger family members are willing to take the initiative and prove that they can take the firm ahead of their rivals by applying corporate governance principles.”

Mervyn King, chairman of the Global Reporting Initiative, and Barbara Hauser, an expert lawyer specializing in family companies, are among those scheduled to speak at the event. King is also the head of the United Nations Global Corporate Governance Committee.

The aim of the summit is to shape the future of corporate governance practices in Turkey while also informing the public of the changes, Bayazıt said, adding that his association now has nearly 450 individual members and 11 corporate members.

“We managed to bring together both the shareholders and board members of prestigious companies for this summit,” he said.

Since 2003, TKYD has been undertaking numerous activities in Turkey with the aim of introducing best corporate governance practices and ensuring their adaptation.

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