Board of Directors meetings are the cornerstone of corporate governance in Turkey. Ensuring these meetings are conducted efficiently and legally is paramount for any business operating within the Turkish legal framework.
As Akkas & Associates Law Firm, a leading Istanbul-based firm providing comprehensive legal services since 1992, we understand the intricate nuances of the Turkish Commercial Code (TCC) and its implications for corporate entities. This guide outlines the essential aspects of board meetings in Turkey for 2025, offering professional and informative insights.
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Navigating corporate governance in Turkey, especially regarding board of directors meetings, requires a strategic understanding of local laws, processes, and international best practices. Our English-speaking lawyers will cover everything you need to know about conducting, managing, and documenting board meetings in Turkey, ensuring your business stays compliant and thriving.
Board Meetings in Turkey: An Overview
The board of directors (BOD) plays a critical role in the corporate structure of Turkish companies. Its meetings are integral to company governance, helping ensure transparency, decision-making efficiency, and legal compliance.
Under the Turkish Commercial Code (TCC), which has seen strategic updates in the past decade, BOD meetings in Turkey are conducted with specific legal formalities that every director, secretary, and company counsel should understand. Familiarity with these procedures is essential for limited liability companies (LLCs) and joint stock companies (JSCs) alike.
Legal Basis: Turkish Commercial Code Article 390 and Recent Updates
Convening Meetings
- According to Article 390 of the TCC, board meetings must gather at least the majority of the board members. Decisions are valid only if a majority of present members approve them.
- The company’s articles of association may specify a higher quorum.
- The chairperson (or their deputy) is generally authorized to convene meetings.
Proxy Voting & Attendance
- Directors cannot vote by proxy. All members must participate and vote individually.
- Electronic participation is permitted if the articles of association allow it.
Decision-Making
- In the case of a tie at a board meeting, the item is postponed to the next session. If still tied, the proposal is deemed rejected.
- Resolutions without a meeting are valid if a written proposal is circulated and signed by at least a majority of the total number of members, provided that none of the directors requests a meeting.
The Significance of Board Meetings in Turkish Companies
In Turkey, the Board of Directors plays a central role in the management and representation of joint-stock companies (Anonim Şirket, A.Ş.) and, where applicable, limited liability companies (Limited Şirket, Ltd. Şti.). These meetings are where crucial decisions are made, strategies are formulated, and the company’s direction is set. Adherence to legal requirements is not merely a formality; it directly impacts the validity of decisions and the liability of board members.
Legal Framework: The Turkish Commercial Code (TCC)
The primary legislation governing board of directors meetings in Turkey is the Turkish Commercial Code No. 6102. The TCC, particularly Article 390 and subsequent articles, stipulates the rules for convening, conducting, and documenting these meetings. Recent amendments in 2024 have further refined some aspects, particularly concerning the election of chairman and vice-chairman and the convening of meetings upon request.
Convening a Board Meeting: Procedures and Quorums
Typically, the Chairman of the Board or, in their absence, the Vice-Chairman, is responsible for convening board meetings. However, any board member can request a meeting in writing. If a majority of board members make such a request, the Chairman is obliged to convene the meeting within 30 days. Should the Chairman fail to do so, the requesting members can directly convene the meeting.
The TCC mandates specific quorums for board meetings. Generally, meetings must be convened with the majority of the total number of board members. Resolutions are then adopted by the majority of the members present at the meeting. It is crucial to note that board members cannot vote by proxy for other members. If a tie vote occurs, the matter is referred to the next meeting. If the tie persists, the proposal is deemed rejected.
Decision-Making and Resolution Validity
Board resolutions are valid only if they are in writing and signed by the participating members. While approvals are not required on the same sheet of paper, all approvals must be attached to the Board of Directors’ Resolution Book or compiled into a single resolution bearing the signatures.
The TCC outlines certain non-delegable duties and authorities of the board of directors. These powers cannot be transferred or delegated to individual board members or third parties. Examples include the top-level management of the company, determination of the company’s operational policies, and approval of internal regulations.
Key Considerations for 2025
As of 2025, companies should be particularly mindful of recent amendments to the TCC. For instance, the obligation to elect the chairman and vice-chairman annually has been relaxed, allowing for elections for the entire term of the board of directors. Furthermore, the authority to appoint and dismiss branch managers and authorized signatories, previously a non-delegable duty, has been removed from this scope, allowing for greater operational flexibility.
For companies that were established before January 1, 2024, with capital amounts below the new minimum thresholds (TRY 250,000 for joint-stock companies and TRY 50,000 for limited liability companies), it is imperative to increase their capital to these amounts by December 31, 2026. Failure to do so may result in the company being deemed dissolved.
During the general assembly meetings held for such capital increases, no meeting quorum is required, and resolutions can be passed by a simple majority of votes cast.
Electronic Meetings and Remote Participation
The Turkish Commercial Code, under Article 1527, permits electronic general assembly meetings. This provision also extends to board of directors meetings, allowing for remote participation. Companies utilizing electronic means for board meetings must ensure that the electronic system complies with the relevant regulations and that all members can participate effectively and vote.
This flexibility is particularly beneficial for companies with international board members, streamlining logistical challenges. For more information on navigating company establishment in Turkey, refer to our article on Turkish Company Formation Law.
Corporate Governance Best Practices
Beyond legal compliance, adopting strong corporate governance practices enhances transparency, accountability, and ultimately, the company’s success. This includes clear internal directives, regular communication among board members, and robust record-keeping. Independent board members, particularly in listed companies, play a crucial role in ensuring objective decision-making and safeguarding the interests of all stakeholders.
Board of Directors Meetings: FAQs
Q1: What is the minimum number of board members required for a Turkish joint-stock company? A1: A Turkish joint-stock company must have at least one director. There is no maximum number stipulated by the TCC, but practical considerations and articles of association may influence this.
Q2: Can board meetings in Turkey be held virtually? A2: Yes, the Turkish Commercial Code allows for electronic board meetings, provided the electronic system ensures effective participation and voting rights for all members.
Q3: What happens if there’s a tie vote during a board meeting? A3: If there’s a tie vote, the matter is referred to the next meeting. If the tie persists at the second meeting, the proposal is deemed rejected.
Q4: Do board members need to be Turkish citizens or residents? A4: No, there are generally no nationality or residency requirements for board members in Turkey under the Turkish Commercial Code. Legal entities can also be appointed as directors, but they must appoint a real person representative.
Q5: Are board resolutions required to be notarized? A5: While not all board resolutions require notarization, some specific resolutions, particularly those involving significant corporate changes or real estate transactions, may necessitate notarization and registration with the Trade Registry.
Q6: What are the consequences of not adhering to board meeting regulations? A6: Non-compliance can lead to the invalidity of resolutions, personal liability for board members, administrative fines, and potential disputes among shareholders.
Contact us for Board of Directors Meeting Services in Turkey
Navigating the intricacies of board of directors meetings in Turkey requires a deep understanding of the Turkish Commercial Code and its evolving landscape. From establishing proper convening procedures and ensuring quorum compliance to drafting legally sound resolutions and understanding the implications of recent amendments, professional legal guidance is indispensable.
For expert assistance with your company’s board of directors meetings, corporate governance, and all aspects of commercial law in Turkey, contact Akkas & Associates Law Firm. Our experienced Turkish lawyers in Istanbul are ready to provide tailored legal solutions and ensure your business operations in Turkey are seamless and compliant.
