The concept of corporate govarnance in capital markets and practice in Turkey

Since the 1990s, corporate governance has been one of the mostdebated issues about the firm management. This concept, as a form ofmanagement that is based on principles and rules, is far from arbitrariness. Itprovides those, whose interests might be effected by the decisions themanagers make, with the opportunity to channel the managers always tomake the right decisions by means of inspecting them. Briefly, corporategovernance comprises a series of relations between a company?s board ofdirectors, shareholders and other interest holders.The recent scandals and bankruptcies occuring in most of thedeveloped markets, especially in the USA, have brought to light the need forthe revision of the application strategies of corporate governance in thecapital markets. A managerial approach shaped by certain principles hasbeen regarded as the way to overcome the trust issues concerning thecapital markets. As a result of the global competition, the principles and thecare taken in the process of protecting the rights of the investors, havebecome the most significant indicatives of prestige; hence counrties andcompanies have begun to seek the most appropriate form of corporategovernance for themselves. The main internationally acclaimed regulationsare: The Cadbury Comitee Report in England, The OECD Principles ofCorporate Governance, The Sarbanes Oxley Act in the United States, andThe Australian Corporate Governance Principles. The cultural diversity ofeach counrty has incresed the variety of the regulations concerning the issue.The overall condition of the country, the level of development, and theregulations formed according to the practices of the management haveproven that corporate governance is not restricted to a single model. On theother hand, transparency, accountability, responsibility, and fair managementare deemed indispensable in corporate governance regulations.All over the world, the concept of corporate governance is percievedwithin the frame of two basic models. The first is ?The Anglo-Saxon Model?,also referred to as the shareholder approach, which is applied mainly in theUSA and England; the other is ?The Continental European Model?(stakeholder approach) that is generally practiced in Japan and Europe,particularly by Germany and France. According to the Anglo-Saxon Systemadopting a shareholder-oriented viewpoint and claiming that the managementshould serve the interests and ends of shareholders, the fundamental goal ofthe management is to increase the profit per share; since profitability isconsidered the most prominent expectation of the shareholder. TheContinental European System, on the other hand, is stakeholder-centered.Unlike the opportunist company practices that aim at a short-term satisfactionof the shareholder, this system requires that the contribution of all the otherstakeholders, who, in the long run, would create value for the company, betaken into account.Today, extensive and integrated practises are carried out in the fieldof corporate governance. The World Bank, OECD, and the Global CorporateGovernance Forum (established by the World Bank and the OECD, togetherwith the representatives from the private sector) are considered pioneeringorganizations in this field. Also, in Turkey, a study is undertaken by TÜSİAD,moreover, ?The Principles of Corporate Governance? is published by SPK.In this study, the sufficiency of the current judicial regulations inTurkey is analyzed in relation to the principles of corporate governance, andto what extent the companies whose shares are processed in İMKBapprehend and practice corporate governance is discussed. In this context,the corporate governance questionaire of SPK and the joint studies of TheBoston Consulting Group and TKYD are evaluated.