The Organization for Economic Cooperation and Development (OECD) issued its first report on corporate governance in Turkey, praising progress made and itemizing a long list of necessary improvements.
"Although the overall corporate governance outlook is positive, the assessment reveals some key areas for improvement by companies and the authorities," the OECD concluded in a 150-page report issued last month.
The report notes that corporate ownership in Turkey tends to be concentrated in family-controlled, financial-industrial company groups. Free floats are often low, pyramidal structures are common, and there is a high degree of cross-ownership within some company groups. Controlling shareholders often play a leading role in the daily management and strategic direction of publicly held companies.
These challenges notwithstanding, the country's securities regulator, the Capital Markets Board (CMB), receives high marks from the OECD for "playing a leading role in setting corporate governance standards for publicly held companies, enforcing the applicable standards, and fostering market integrity." In recent years, Turkey has adopted a corporate governance code (CMB Principles) and implemented a wide range of fundamental regulatory reforms.
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