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Board governance

2021 Turkey Spencer Stuart Board Index

2021 Snapshot

 64 %

of companies convene 14 times or less

 21 %

of chairs sit on at least one other listed board

 16 %

of CEOs have an outside directorship

Board meetings

All of the BIST 30 companies report the number of decisions made and the required minimum number of meetings. In general, companies reported director participation at an aggregate rather than an individual level.

Our analysis looks at meetings held during the 2020 calendar year, during which BIST 30 companies held an average of 27.3 meetings. This is by far the highest in Europe.

Although 64% (18) of boards convene 14 times or fewer, the range in the number of meetings is extremely wide. Şişecam recorded the highest number of meetings, at 154, followed by Emlak Konut GYO with 151.

When these two outliers are excluded, the average number of board meetings in 2020 fell from 27.3 to 17.4.

Halk Bank, THY, and Vakıflar Bankası also reported conducting 50 or more meetings in 2020.

The companies that met the least frequently were BIM (twice) and Arçelik (once); Tüpraş convened zero meetings.

Board meetings held in 2020
Meetings %
<10 39%
10-19 29%
20-29 7%
30-39 4%
40-49 4%
>50 18%
Meeting frequency in BIST 30
Most frequent Least frequent
Şişecam (154) TAV (6)
Emlak Konut GYO  (151) Akbank (5)
Vakiflar Bankasi (76) Pegasus Hava Tasimaciligi (4)
THY (53) Petkim (4)
Halk Bankasi (50) BIM (2)
Sasa Polyester (49) Arçelik (1)
Aselsan (31) Tüpraş (0)
Our perspective

The high frequency of meetings on BIST 30 boards is again evident this year. One explanation could be the high proportion of executive members on those boards. We would expect that boards dominated by executive members would meet more often than purely supervisory boards. However, the data show that there is no significant correlation between the number of meetings and the share of executive board members present in companies.

This suggests that many BIST 30 boards act as “super executive” committees. They often venture into matters of management rather than supervising the executives, which is a board’s primary functional responsibility.

A further reason for boards’ deeper involvement in management may well be the volatile environment that Turkey faces, given the pandemic and economic instability. However, boards should still be aware that they are primarily a steering body and activities that fall outside this scope could prevent boards from fulfilling their core responsibilities.

External commitments

BIST 30 non-executive board directors sit on an average of 1.6 listed company boards (1.8 in 2020). 25.6% of NEDs (61) sit on the board of at least one other listed company.

79% (22) of BIST 30 chairs do not sit on any other listed board. The chairs of Koç Holding and group companies Yapı Kredi, Arçelik, Tüpraş sit on the boards of an additional five to six listed companies of the same group.

68% (19) of CEOs sit on their own company’s board; of these four (21%) have a combined chair/CEO role. Only three CEOs (16%) sit on the board of another listed company.

30% (15) of female directors and 25% (24) of independent directors sit on at least one other listed company board.

Our perspective

Holding board memberships of multiple companies is notably demanding. The expectations laid down by board chairs may vary greatly, giving board members very different responsibilities from company to company.

The issue of overboarding certainly became a focus of concern during the pandemic, as chairs and investors considered more closely whether a large portfolio of board memberships could diminish capacity for dealing with a raft of simultaneous challenges.

BIST 30 directors are appointed to multiple boards, mostly due to family affiliations, especially in chair positions. Although we cannot capture it by our data, overboarding outside the BIST 30 is also still apparent because of the proliferation of board members with political affiliations who serve on multiple company boards.

Corporate governance: rating and compliance

Fifteen BIST 30 companies were evaluated in 2020 and disclosed their corporate governance rating. The average rating of this year’s BIST constituents is 9.5 — unchanged from last year.

In 2020, nine BIST 30 companies scored higher than 9.5. Garanti Bankası received the highest corporate governance compliance rating score, with 9.73 out of 10. TAV, which had received the highest score for the three previous years, followed with a rating of 9.67. Oyak Çimento (9.26) and Aselsan (9.29) have the lowest ratings.

Boards with the highest corporate governance rating
CG Rating
Garanti Bank 9.73
TAV 9.67
Pegasus 9.63
Yapı Kredi Bankası 9.62
Arçelik 9.6