Corporate governance and transparency in Turkey: Determinants of disclosure practices of the listed companies ahead of the shareholder meetings

This study is an attempt to analyze the levels and determinants of disclosure practices of Turkish listed companies ahead of the shareholder meetings. After touching upon the definitions of corporate governance, transparency, disclosure and assessing the positive and negative consequences of disclosure practices comprehensively, the legal framework for corporate governance and transparency in Turkey are briefly explained. In the empirical part of the study, by means of SPSS statistics program, Kruskall Wallis and Pearson Correlation analysis methods, taking 54 companies, which are listed in Istanbul Stock Exchange ISE30 and Corporate Governance Indexes, disclosure levels of the information related to voting items and the determinants effecting disclosure practices have been investigated. The independent variables are as follows: Being listed in the Corporate Governance Index, Corporate governance overall rating score, transparency and disclosure rating score, free float rates, foreign ownership, and state ownership. The results indicate that the disclosure practices of the Turkish companies ahead of the shareholder meetings are overwhelmingly based on whether the information is mandatory to disclose. To a large extent the companies do not provide information, unless the information should be legally disclosed. Turkish companies are particularly reluctant to disclose information regarding the names and biographies of the board of directors and internal auditor nominees as well as their remuneration levels ahead of the shareholder meetings. Moreover, it has been found out in the study that the overall disclosure practices ahead of the shareholder meetings are positively correlated with the foreign ownership rate of the companies, whereas the relationship with the remaining factors such as listing in the corporate governance index, overall corporate governance rating scores, transparency and disclosure rating scores, free float rates as well as state ownership are statistically insignificant. The study concludes that Turkish companies should make progress in the disclosure practices in order to attract international investors especially in those abovementioned areas and the lawmaker should develop necessary mechanisms to improve those areas accordingly.