Management of board of Directors

What is the Board of Directors?

The board of directors is a board of people who manage an institution with a common mind. The powers, duties and responsibilities of the board of directors are determined by legal regulations and by the internal statutes of the institutions themselves.

In this context, let’s examine the board structure in joint stock companies, which is the most commercial for-profit organization structure that we encounter most in our commercial life.

Board of Directors of Joint Stock Companies

Article 359 of the Turkish Commercial Code no. 6102, which is legally the head of the governing body of joint stock companies, is the first of its kind. Article 1. in the paragraph; “the joint stock company has a board of directors consisting of one or more persons appointed by the original contract or elected by the general assembly.”

I – Appointment and selection

1. Number and qualifications of members

ARTICLE 359- (1) The joint stock company has a board of directors consisting of one or more persons appointed by the original contract or elected by the general assembly. (Mülga last sentence: 26/6/2012-6335/42 md.) (…)

(2) If a legal person is elected as a member of the board of directors, only one real person, as determined by the legal entity on behalf of the legal entity, shall be registered and declared together with the legal entity; furthermore, the registration and announcement is immediately disclosed on the company’s website. On behalf of the legal entity, only this registered person can attend meetings and vote.

(3) The members of the Board of Directors and the real person to be registered on behalf of the legal entity must be fully qualified. (Mülga second and third sentence: 26/6/2012-6335/42 md.)

(4) The reasons for terminating membership are also prevented from being elected.

2. Representation of certain groups on the board of directors

ARTICLE 360- (1) Provided that it is foreseen in the original contract, certain share groups may be granted the right to be represented on the board of directors of the shareholders and the minority, who form a specific group with their characteristics and qualifications. For this purpose, the right to propose candidates for board membership may be granted in the original contract, as can be foreseen in the original contract in which the members of the board of directors will be selected from among the shareholders, certain share groups and minorities that constitute a particular group.

The candidate proposed by the General Assembly for the membership of the board of directors or the candidate belonging to the group and the minority where the right is recognized must be elected as a member unless there is a justcause. The right to be recognized in this way shall not exceed half the number of board members in publicly traded joint stock companies. Arrangements for independent board members are reserved.

(2) The shares granted the right to be represented in the board of directors in accordance with this article shall be deemed privileged.

3. Insurance

ARTICLE 361- (1) If the losses that the members of the Board of Directors may inflict on the company for defects in performing their duties are insured at a price exceeding twenty-five percent of the company’s capital and the company is thus guaranteed, this issue is open to the public. the capital markets board of companies, as well as the stock exchange is traded in the bulletin of the stock exchange and is taken into account in the evaluation of compliance with corporate governance principles.

4. Tenure

ARTICLE 362- (1) Members of the Board of Directors are elected to serve for a maximum of three years. If there is no contrary provision in the original contract, the same person may be re-elected.

(2) Article 334 is reserved.

II – Membership vacancy

Article 363- (1) If a membership is vacant for any reason, with the provision of Article 334 reserved, the board of directors shall temporarily elect a member of the board of directors and submit it to the approval of the first general assembly. The member elected in this way shall serve until the plenary session where it is submitted for approval and, if approved, completes the term of his predecessor.

(2) If a member of the Board of Directors is declared bankrupt or his or her license is restricted, or if a member loses the legal requirements for membership or the qualifications stipulated in the original contract, his membership shall be it ends spontaneously.

III – Dismissal

ARTICLE 364- (1) Members of the Board of Directors may be dismissed at any time by the decision of the general assembly, even if they are appointed by the original contract, in the presence of a relevant article on the agenda or if there is a justcause, even if there is no item on the agenda. The legal entity, which is a member of the board of directors, may change the person registered in his or her name at any time.

(2) Article 334 and the right of compensation of the deposed member are reserved.

Management and Representation in Joint Stock Companies

The joint stock company is managed and represented by the board of directors.

I-Task distribution

1-President and Vice President

ARTICLE 366- The Board of Directors elects a chairman from among its members each year and at least one deputy chairman to act as its deputy when it is not present. In the original contract, the election of the president and the vice-president, or one of them, by the general assembly can be foreseen.

2-Committees, Commissions

(2) The Board of Directors may establish committees and commissions, including members of the board of directors, for the purpose of monitoring the progress of the works, preparing reports on the subjects to be presented to them, implementing their decisions or auditing internally.

3-Transfer of Management, Internal Guidelines

ARTICLE 367- (1) The Board of Directors may be authorized to transfer management, in whole or in part, to one or more board members or third parties, in accordance with an internal directive to be put into the original contract. This internal directive regulates the management of the company; the tasks, definitions, locations required for this, specifically determine who depends on whom and who is responsible for providing information. The Board of Directors informs its shareholders and creditors who convincingly demonstrate their interests worth protecting in writing about this internal directive.

(2) The management belongs to all members of the board of directors, unless transferred.

4. Commercial agents and regents

ARTICLE 368- (1) The Board of Directors may appoint commercial representatives and commercial representatives.

5. Obligation of care and commitment

ARTICLE 369- (1) The members of the Board of Directors and the third persons in charge of management are obliged to carry out their duties with the care of a discreet manager and to observe the company’s interests in accordance with the rules of honesty.

(2) The provisions of Article 203 to 205 are reserved.

Ii. Authority of representation

1. General

1. If the original contract does not otherwise foresee or the board consists of a single person, the authority to represent belongs to the board of directors for use with double signatures.

(2) The Board of Directors may delegate the authority of representation to one or more executive members or to third parties as directors. It is imperative that at least one board member has the authority to represent.

2. Scope and limits

ARTICLE 371- (1) Those authorized to represent may carry out any business and legal proceedings that fall within the scope of the company’s purpose and business, on behalf of the company, and may use the company title for this purpose. The company reserves the right of retribution for transactions contrary to the law and the original contract.

(2) The transactions made by those authorized to represent with third parties outside the subject of the business also bind the company; it turns out that the third party knows that the transaction is outside the business subject, or that the situation is in a position to know. The fact that the company’s original contract has been announced is not sufficient evidence in itself, in terms of proof of this point.

(3) The limitation of the authority of representation shall not constitute a provision against third parties with good will; however, registration and declared limitations apply to the registration and contingent of the representation authority that is specific to or used in the works of the centre or a branch office.

(4) The fact that the transaction made by the persons authorized to represent is contrary to the original contract or the decision of the general assembly does not prevent third parties of goodwill from applying to the company for that transaction.

(5) The company is responsible for the torts committed by those authorized to represent or manage while performing their duties. The company reserves the right to remedy.

(6) At the time of the conclusion of the contract, the validity of the contract between this shareholder and the company in the joint stock companies with a single shareholder, whether or not the company is represented or not, depends on the written execution of the contract. This requirement does not apply to contracts for daily, insignificant and ordinary transactions according to market conditions.

3. signature shape

ARTICLE 372- (1) Persons authorized to sign on behalf of the Company shall sign under the title of the company. The provision of the second paragraph of article 40 is reserved.

(2) The documents to be issued by the Company show the company’s headquarters, the location of the register and the registration number.

4. Registration and announcement

ARTICLE 373- (1) The Board of Directors shall submit a notarized version of its decision, which shows the persons authorized to represent and the forms of representation thereof, to the trade register for registration and announcement.

(2) After the registration of the authority of representation in the trade register, any legal disability relating to the selection or appointment of the persons concerned shall be provided by the company to third parties, but only if the disability is proven to be known to them. Spread.

III – Tasks and powers

1. In general

ARTICLE 374- (1) The Board of Directors and the management in the field left to it, except those left in the authority of the general assembly in accordance with the law and the original contract, shall be subject to all kinds of business and transactions necessary for the realization of the company’s business is authorized to make decisions.

2. Non-transferable duties and powers

ARTICLE 375- (1) The non-transferable and indispensable duties and powers of the Board of Directors are as follows:

  • a) The management of the Company at the high estuary and the issuance of instructions on them.
  • b) Determination of the company’s governing body.
  • c) Accounting, financial audit and the company’s to the extent required by the management, the establishment of the necessary order for financial planning.
  • d) The appointment and dismissal of directors and persons with the same function and those authorized to sign.
  • e) The persons in charge of the management, in particular the laws, oversight of whether they are acting in accordance with the contract, internal guidelines and written instructions of the board of directors.
  • f) Pay, holding the board decision and general assembly meeting and negotiation books, annual activity report and corporate governance arrangement of the statement and presentation to the general assembly, preparation of general assembly meetings and execution of the general assembly decisions.
  • g) Notification to the court in the presence of debt inship status.
3. Loss of capital, debt-sinking
a) Call and notification load

ARTICLE 376- (1) If it is found from the last annual balance sheet that half of the sum of capital and statutory reserve slips are unrequited due to losses, the board of directors calls the general assembly to the meeting immediately and presents the remedial measures it deems appropriate to this general assembly.

(2) According to the last annual balance sheet, if it is understood that two-thirds of the sum of capital and statutory reserves is unrequited due to losses, the company will automatically terminate unless the general assembly called to the meeting is satisfied with one third of the capital or decides to complete the capital.

(3) (Varied: 26/6/2012-6335/16 md.) If there are signs that the company is in a debt-to-debt state, the board of directors will issue an interim balance sheet on the basis of the continuity of the assets and on the possible sale prices. If it is understood from this balance sheet that the assets are not sufficient to cover the receivables of the company’s creditors, the board of directors shall inform the small business court where the company’s headquarters are located and request the bankruptcy of the company.

It turns out that before the bankruptcy decision was made, the creditors of the company’s debts, which would cover the company’s deficit and eliminate the debt-riding status, would be placed in the next order of the creditors in the order of their receivables. have been accepted in writing and the validity, authenticity and validity of this statement or contract shall be verified by the court-appointed experts to which the bankruptcy request will be declared by the board of directors. Otherwise, the application made to the court for an expert examination shall be accepted as a bankruptcy notice.

b) postponement of bankruptcy

ARTICLE 377- (1) The Board of Directors or any creditor may request a postponement of bankruptcy by submitting to the court an improvement project showing objective and real resources and measures, including the introduction of new cash capital. In this case, articles 179 to 179/b of the Code of Execution and Bankruptcy shall apply.

4. Early detection and management of risk

ARTICLE 378- (1) In companies whose shares are traded on the stock exchange, the board of directors shall be able to identify the company’s existence, development and continuation of the early identification of the causes, the necessary measures and remedies and to manage the risk, it is obligated to establish a committee, run and develop the system. In other companies, this committee is established immediately if the auditor deems it necessary and informs the board of directors in writing and submits its first report at the end of a month following its establi
shment. (2) The Committee evaluates the situation in its report to the board of directors every two months, indicates the dangers, if any, and shows remedies. The report is also sent to the auditor.

5. The company accepts its shares as acquisitions or pledges
a) In general

ARTICLE 379- (1) A company shall not accept its shares as acquisitions and pledges in excess of one-tenth of its principal or issued capital or in excess of a transaction. This provision also applies to shares that a third party accepts on its behalf, but only as a acquisition or pledge to the company account.

(2) In order for the shares to be accepted as acquisitions or pledges in accordance with the provision of the first paragraph, the general assembly must authorize the board of directors. In this authority, which will be valid for a maximum of five years, the upper and lower limit of the price payable to the shares to be paid with the total prestige values of the shares to be considered as acquisitions or pledges is specified by specifying the number of prestige. In each permit request, the board of directors states that the legal requirements have been met.

(3) In addition to the terms of the first and second paragraphs, after deducting the costs of the shares to be acquired, the remaining company net asset, the sum of the remaining capital, at least principal or issued capital and reserve stakes not permitted to be distributed in accordance with the law and the original contract should be up to.

(4) In accordance with the foregoing provisions, only shares whose fees have been paid may be acquired.

(5) The provisions contained in the above paragraphs shall also apply in the event of the acquisition of the shares of the parent company by the puppy company. About companies whose share stakes are traded on the stock exchange, the Capital Markets Board makes the necessary arrangements in terms of transparency principles and rules regarding price.

b) Cheating against the law

ARTICLE 380- (1) For the purpose of acquiring shares, the company’s legal proceedings with another person, subject to advance, loan or collateral, are superstitious. This butlan provision shall apply to transactions involved in the business matters of credit and financial institutions and to the legal proceedings relating to the issuance of advances, loans and guarantees to employees of the company or its affiliates in order to acquire the shares of the company. Apply. However, these exceptional transactions reduce the reserve stakes that the company has to allocate according to the law and its original contract, or violate the rules regarding the expenditure of reserve slips issued in Article 519, and it is invalid if it does not allow it to separate the reserve.

(2) Furthermore, the company and the third party have been made between the company and the third party, and the company’s shares; an arrangement that gives the right to take into account the company in which the company, a company or company owns the majority of its shares, or foresees such an obligation, if the company had taken these shares, the transaction would have been considered contrary to Article 379. It’s superstitious.

c) Preventing a near and serious loss

ARTICLE 381- (1) If necessary to avoid a close and serious loss, a company may acquire its shares without the decision of the general assembly on authorisation in accordance with Article 379.

(2) In the event of the acquisition of shares in this way, the board of directors shall be entitled to the first general assembly;

  • a) the reason and purpose of the acquisition,
  • b) the number of the shares acquired, the sum of their prestige and how much of the capital it represents,
  • c) written information about the price and payment terms, Gives.
d) exceptions

ARTICLE 382- (1) If a company is enforcing the provisions of Article 473 to
475 regarding the reduction of its principal or issued capital, without being bound by the provisions of Article 379;

  • a) if it is required by the Rule of Cumulative succession,
  • b) from a statutory purchase burden
  • c) If all of the fees are paid and are for the purpose of collecting a company’s receivable from the executor,
  • d) the Company may acquire its shares if it is a securities company.
e) Modest acquisition

ARTICLE 383- (1) A company may acquire its shares without prepree, provided that all of its costs have been paid. (2) The provision
of the first paragraph shall also be applied by comparison if the baby company acquires the shares of the parent company without any modesty.

f) Disposal

Article 384- (1) According to the provisions of article 382 (b) to (d) and article 383, the acquired shares shall be disposed of within three years of their acquisition, as soon as their transfer is possible without causing any loss for the company; As it turns out, the sum of these shares owned by the company and the baby company should not exceed ten percent of the company’s principal or issued capital.

g) Disposal in the case of contrary acquisition

ARTICLE 385- (1) Shares acquired or taken as hostages in contravention of articles 379 to 381 shall be disposed of or held hostage no later than six months from the date of their acquisition or acceptance as hostages.

h) Reduction of capital

Article 386- (1) Shares that cannot be disposed of in accordance with articles 384 and 385 shall be immediately destroyed by the reduction of capital.i) The reserved provisions ARTICLE 387- (1) The provisions of other laws concerning the acquisition of the Company’s shares are reserved.

i) Prohibition of committing their shares

ARTICLE 388- (1) The Company cannot undertake its shares.

(2) The third party or a puppy company’s commitment to the company’s share in its own name but to the company’s account shall be deemed to be the company’s own share.

(3) In the event of a violation of the first and second paragraphs, the founders of such shares shall be deemed to have committed the shares in the capital increases and they shall be responsible for the share prices. Founders who prove that they have no flaws in unlawful commitment and board members are relieved of responsibility for capital increases.

(4) The provisions of the first and third paragraphs shall apply in comparison to the young companies that undertake the shares of the parent company. These shares are considered to have been committed by the board members of the puppy company. Members are responsible for the share price.

j) Exercise of rights

ARTICLE 389- (1) The shares of the parent company acquired by the baby company with its own shares acquired by the Company are not taken into account in calculating the meeting rate of the general assembly of the parent company. Except for the acquisition of free shares, the company’s own shares inherited do not give any share ownership rights. Voting rights for the parent company shares acquired by the young company and the rights associated with it are frozen.

This artcile shows how board of directors is shaped and what responsibilities they have got. Also showing represantation way of board to outside of company. At this link you can learn how decisions can be taken by board in detail;


J Nov 2019


Ekrem Duman

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