Development of corporate governance, corporate governance approach of banking sector and effects of corporate governance on the financial structure of banking sector's companies: A research on ISE 100 index and ISE corporate governance index (XKURY)

Corporate governance has been a focal point of research in the World and Turkey in recent years. The present research takes a look at the framework of the development of corporate governance and presents its impact on the economy and companies. By comparison of the corporate governance models, it is aimed to get clear answer about structural differences between systems and countries. It is accepted that the process of corporate governance is a dynamic and the corporate governance structure in each country develops in response to country-specific factors and conditions. However, the good corporate governance is based on transparency, accountability and openness in reporting and disclosure of information, both operational and financial. These are internationally accepted to be vital to the practice of all models. Additionally, development of corporate governance has increased after OECD Corporate Governance Principles which was published in 1999 for the first and then drawn up in 2004. On the other side Capital Market Board of Turkey (CMB) published the Corporate Governance Principles in 2003 and this is the first important movement in order to improve corporate governance applications, raise awareness and integrate the Turkish capital market to the global market that has been revised in 2005. The other important implementation for encouraging companies to implement corporate governance principles is the Istanbul Stock Exchange (ISE) Corporate Governance Index (XKURY), which supplies a standard and comparable measurement system. Corporate Governance in banking sector is the main research theme of this thesis; corporate governance practices in banks which shares are traded in ISE 100 and ISE XKURY are analyzed and discussed the effects of ISE XKURY Index on the financial performance of companies. It is also aimed to evaluate the impact of good corporate governance implementations and developments on financial performance in banking sectors between 2007 and 2011.