Corporate Governance Codes in Türkiye

Introduction  

Climate change and nature loss pose material, systemic and financial risks to corporations and their shareholders. Managing and mitigating these risks, while working towards the net zero transition, also presents opportunities for businesses to increase resilience, drive value and competitive advantage. The Corporate Climate Governance Navigator shares best practice, standards and guidelines in corporate climate governance for board directors across the world, including mandated requirements at jurisdictional level.

This brief provides an overview of the principles and provisions in the Türkiye Communique on Corporate Governance that support climate and nature-related action in the board room.

The actions proposed draw on international frameworks including the OECD’s Principles on Corporate Governance and Climate Change and Corporate Governance Report, the IFC’s Climate Governance Approach, and the Principles for Effective Climate Governance developed by the World Economic Forum, which form the foundation of the Climate Governance Initiative’s (CGI) work. This country brief can be reviewed alongside the Directors’ Duties Navigator: Climate Risk and Sustainability Disclosure where directors will find further guidance on the Türkiye legal and regulatory landscape.  

About the Türkiye Principles and Provisions on Corporate Governance  

The Türkiye Commercial Code, TCC (2012) provides standards regarding establishment and governance of commercial companies, and principles that comply with international corporate governance and auditing standards, such as international trade, finance, industry, and transparency of companies in terms of accounting and financial reporting. In addition, other laws communiques and principles governing corporate rules and practices are:  

• Law No. 6335, amending the TCC;
• the Capital Markets Law dated 6 December 2012 (Law No. 6362), which entered into force on 30 December 2012, replacing the former Capital Markets Law dated 30 July 1981 (Law No. 2499);
• the Capital Markets Board Communiqués;
• the Corporate Governance Communiqué dated 3 January 2014, serial II, No. 17.1 (the Communiqué); and
• the Corporate Governance Principles (CGP) listed in Annex 1 of the Communiqué.

The Principles of Corporate Governance are set forth in the Annex of the II -17.1 Communique was published in the official Gazette, 3 January 2014 (numbered 28871). The purpose of the Communiqué is to determine the principles of corporate governance and principles and procedures on related party transactions, which shall be applied by corporations.

Principles and Provisions in the Türkiye Communique on Corporate Governance that Support Climate and Nature Action

The table below highlights provisions in the Türkiye Communique, Annex I. that support climate and nature, and suggest board-level action and related questions for the boardroom. The provisions are grouped in seven sections align with the parameters of IFC’s Climate Governance Approach (2023) and the Principles for Effective Climate Governance published by the World Economic Forum (2019). 

The above table highlights provisions in the Türkiye Communique that direct boards to take practical steps to advance climate and nature-related engagement and action. The steps and questions can be used as a starting point to gradually strengthen the board’s engagement in these areas. The tone set at the top of the organisation is of great importance to the culture of the whole organisation, and boards are uniquely positioned to drive positive action on climate change and nature loss through the lens of corporate purpose and strategy.  

For easy reference please find here Türkiye Communique on Corporate Governance (2014).

Board Director and climate governance expert Şevki Acuner shared his perspective on how Boards in Türkiye are responding to the principles and provisions of the Communique. Discover his insights here:

Best practice examples of international frameworks for corporate governance on climate and nature

• The OECD Principles on Corporate Governance (2023) support policy makers to evaluate and improve the legal, regulatory, and institutional framework for corporate governance. They also provide guidance for stock exchanges, investors, corporations, and others that have a role in the process of developing good corporate governance. The Climate Change and Corporate Governance Report provides an overview of main trends and issues related to the implications of climate change for corporate action. 
• International Finance Corporation has developed the IFC’s Climate Governance Approach: The IFC Climate Governance tip sheet: Equipping Corporate Boards to Mitigate Climate Risks and Seize Climate Opportunities presents the business case for climate governance and offers guidance to assist  Board directors in identifying and overseeing climate-related risks and opportunities. The tip sheet provides advice on incorporating climate into strategy deliberations and identifying, monitoring, and responding to climate-related issues. The IFC Climate Governance Progression Matrix helps test and assess your boards’ maturity when it comes to Climate Governance and support board directors in identifying and overseeing climate-related risks and opportunities. It provides practical and progressive climate-related actions for each of the six parameters of the IFC Corporate Governance Approach: Commitment, Board Structure and Function, Control Environment, Disclosure and Transparency, Minority Shareholder Treatment and Governance of Stakeholder Engagement. 
• The Principles for Effective Climate Governance published by the World Economic Forum (2023) help you, as a board director, to holistically address climate opportunities and risks, and align global climate goals with the organisation’s purpose, values and long-term prosperity. It provides an overview of global climate policy, science and economics, an overview of trends related to regulation and disclosure, and points at implications for corporate boards. It provides 8 guiding principles for effective climate governance on corporate boards.
• The Directors’ Duties Navigator: Climate Risk and Sustainability Disclosure issued by the Climate Governance Initiative (2024) supports directors to make informed decisions and understand their legal duties regarding how to manage that risk and understand the broader climate-related regulatory landscape in which they operate. The Navigator provides information on over 30 jurisdictions on the following topics: Government and regulatory approaches to climate change, Sustainability and climate-related disclosure requirements, Liability risks for companies and directors and practical tips for directors.