Governance of Turkey's state-owned enterprises: Evaluation and recommendations

State owned enterprises (SOE), one of the tools of the government in the economy, have many roles such as leading the private sector, acting as a regulator in the market, directing the economy and regulating the distribution of income through social service activities. In terms of these important roles in the economy, it is vital for SOEs to carry out their activities based on profitability and efficiency. One of the factors providing efficiency is establishment of a good governance structure. The aim of this study is to analyze the governance structure of Turkey's SOEs, to determine the current problems and to provide solutions through review of country practices and literature search, and to attain feasible results via obtaining the opinions of the SOEs' personnel to ensure participation. The main problem areas in terms of governance in Turkey's SOEs were determined via analyzing the country reviews and international reports. The dual ministry model of the ownership structure and the deficiencies in its accountability, competence and quality of the board of directors, the limitation of commercial activities of SOEs, the lack of transparent and accountable structure and ineffective performance evaluation system have been defined as problem areas. Within the scope of this work in order to improve the governance structure of the SOEs, it is suggested that the ownership structure should be more accountable. To provide an independent and professional board of directors, a two-tier board structure can be a solution. Moreover, the nomination of candidates should be carried out by independent bodies from the government. In addition, it is stated that in order to manage SOEs on a commercial basis the need for a framework legislation that will not prevent liberalization and competition in the sector has been put forward. . The importance of determining the goods and services offered by SOEs according to market conditions is emphasized. In order to strengthen the transparent and accountable structure, effective management of the internal control units is considered a useful audit tool for the SOEs under the direct responsibility of the board of directors. Finally, it is recommended that the performance of the SOEs board of directors should be evaluated according to results of strategic plans. In addition, to construct an effective performance evaluation system, strategic plans should be featured as a part of the Court of Accounts' audit. These suggestions were presented to the SOEs' personnel through a questionnaire and their opinions were included in the study.