The corporate governance may be defined as: “A company’s process of form administrative organs, install managerial and financial systems and operate them in order to increase the market and trademark value and to create a value and increase the amount of return on the investment and to shorten the return period, by taking the inside and outside dynamics into the consideration.” In other words, the corporate governance may also be described as: “From the perspective of the company owners and directors, a company should possess independent rules, standards and procedures free from the individuals; should install systems compatible with the changing conditions of the environment and form an organisational structure conformable to the developments; should have unique greeting styles and business methods and procedures turn it in to a culture. Therefore it is a process to adopt a distinctive identification, far different than the other companies.
Undertaking the critical function to protect the rights of the company owners the corporate governance getting more and more important in today’s world, where the market values are gaining more validity than the balance sheet values of the companies; where it became a necessity to refer to the corporations and even countries within the trademark concept rather than the products; where the intellectual market seems to be more popular compared with the cash capital.
The increasing importance of corporate governance is due to the following factors e.g. liberalised economies gaining an international dimension, the rapidity of developments in the telecommunications, the integration of the capital markets, management of knowledge, frequently changing ownerships of the properties and condensed purchasing on international basis.
The corporate governance may be examined within the subjects e.g. shareholding, interest-Holding, transparency/disclosure to the public, auditor, board of directors and directors.
Shareholding represents the shareholders. Shareholders are individuals, who hold the proprietary rights, give credit and invest. The interest-holder can be defined as a person, a corporation or a benefiting group, who has an interest in the achievements and the activities of the company. The interest-holders of a company include the shareholders together with the workers, creditors, customers, suppliers, syndicates, civil community establishments, the state and even the potential savers who may think to invest in the company.
The principle of “transparency/disclosure to the public” aims to assist the shareholders and the interest-holders to present timely, accurate, complete, clear, analysable, inexpensive, easy reachable information in a way to protect their rights and benefits.
Independent audit organisation is selected by the company’s board of directors. It is mandatory that the independent audit organisations and the audit personnel recruited by these organisations to be totally independent.
The board of directors uses its powers and responsibilities and represents the company pursuant to the legislation, company’s charter, domestic regulations and policies, in accordance with the authorisation by the board of shareholders in the general meeting. The directors provide the company’s business to be applied in accordance with its mission, vision, targets, strategies and policies. The independent directors in a board of directors may make difficult decisions at ease or may apply to the company a hierarchic audit. In the contrary the dependent directors of a company are dependent to the company’s specific affairs in order to protect their benefits.
Phd. Ebru KARPUZOĞLU