Directors’ Duties in Turkey

>> Powers and Duties in Turkey

You must act within the powers imposed by legislation, the company’s articles and by-laws. The articles govern how the company is to be  run, including the powers and responsibilities  of managers.

Duties – skill and care

When exercising managers’ powers, you are required to exhibit such a degree of skill as may reasonably be expected from a person with your knowledge and experience, as well as exercise independent judgment.

You must also exercise a degree of diligence and care in your actions as a company manager. The test applied to determine ‘an acceptable level of care’ is what a reasonable person would do in looking after their own affairs.

Duties – general

In general, the responsibility for the company lies with the managers. When carrying-out the administration of the business, they have to apply the diligence of a prudent businessman, ie they have to supervise all actions of all employees and the other managers (cross-control).

The Board of Managers is entitled to conduct and may not delegate the following duties:

  • execute ultimate direction and management, to give necessary instructions
  • determine the company management organisation in accordance with laws and the articles of association
  • develop accounting, financial auditing and financial planning when necessary for the management of the company
  • supervise whether the persons to whom one or more divisions of company management have been entrusted are acting in accordance with laws, articles of association, internal regulations and instructions
  • establish a committee for early risk detection and management, except for small sized limited liability companies
  • prepare the company’s financial statements (finansal tablolar), annual activity report (y?ll?k faaliyet raporu), and where necessary the group of companies’ financial statements and

annual activity report

  • organize the General Assembly meetings and to execute General Assembly resolutions
  • notify the court should the company’s liabilities exceed its assets

The managers also have to observe the instructions given by the shareholders via shareholders’ resolution.

Duties – other

There are many other areas of law that impose duties on the manager and senior officers. A sample of what are likely to be the most relevant are set out below:

  • You must ensure the company does not carry out business in a manner likely to create a substantial risk of serious loss to the company’s creditors (The Bankruptcy and Enforcement Law).
  • You should not provide materially misleading information regarding the company in public declarations, reports or offers submitted to the general assembly.
  • You and your relatives may not borrow from the company and the company may not issue surety, guarantee and warranty to these persons or undertake their responsibilities or take over their liabilities.

Anti-bribery and anti-money laundering obligations are not specific duties of managers under the Turkish Criminal Code. Any persons regardless, of his or her position, shall comply with anti-bribery and anti-money laundering obligations, otherwise they risk being subject to criminal liability under the Turkish Criminal Code.

This is similar to anti-trust obligations, such  duties are not specific to the managers under the Turkish Criminal Code, however, managers, regardless their positions are liable for breaches of anti-trust obligations under the Law on the Protection of Competition.

Data privacy

Managers, as representatives of the employer, can only use the employees’ personal data in relation to the employee’s qualifications or if it is required to perform a service.

Additionally there is an obligation not to disclose information belonging to their employees, if it is in the interest of the relevant employees for the information to remain confidential. Moreover, employers should use their employees’ personal data in line with honesty rules and other applicable laws.

Environmental law

You must ensure compliance with both Health and Safety and Environmental Legislation. Examples of duties imposed under this could be:

  • You must prepare the evacuation and emergency plan or determine workers who must do so.
  • In case your company has 50 or more employees and if permanent works lasting more than 6 months are conducted at your workplace, you must convene the Health and Safety Board, which will take a part in works related to the health and safety.
  • You must notify the Social Security Institution within three days following the day of a work accident.
  • If your company is required to, you must report all the required information on the protection of the environment to the relevant Agency upon request.
  • Upon request of the relevant authority, you must report any contamination of the environment to the relevant authority for the protection of environment.

Latest version updated 10th April 2018

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