Under Turkish law, the two most common corporate forms are the joint stock company (JSC) and the limited liability company (LLC). While both provide separate legal personality and limited liability, they differ mainly in terms of capital structure, governance, share transfers and liability regime.

JSC is a capital-based company where the share capital is divided into shares. Shareholders are liable for the company’s debts only up to the amount of their subscribed capital. Shares are, as a principle, freely transferable. The minimum share capital is TRY 250,000 and the management is carried out by a Board of Directors, which may consist of one or more members.

A limited liability company is also a capital-based company but has certain differences. The minimum share capital is TRY 50,000 and the number of shareholders is limited (up to 50). Share transfers are subject to stricter formalities, including notarization and registration with the trade registry. Shareholders’ liability is limited to their capital contribution to the company as well as any additional payment obligations and other ancillary obligations which the shareholders may set forth in the Articles of Association. In the case of a public receivable (such as tax and social security debts) that cannot be collected from the company, the shareholders will be held liable for this debt with their own assets in proportion to their capital shares. LLC is managed by one or more managers, who may be shareholders or third parties. It is required for at least one of the shareholders of the LLC to be appointed as the manager.

Publicly held companies are further subject to Capital Markets Board (CMB) corporate governance principles, introducing independent board requirements and enhanced oversight mechanisms.

From a corporate governance perspective, the JSC offers a more robust and scalable framework suited to institutional growth and investor-facing structures, whereas the LLC remains a practical vehicle for closely held and SME-level operations with more compact governance needs.

Corporate governance in Türkiye is evolving toward greater transparency, formalisation and board accountability. A key development is the introduction of mandatory sustainability reporting under the Turkish Sustainability Reporting Standards (TSRS), issued by the Public Oversight, Accounting and Auditing Standards Authority (KGK) in 2023 and aligned with the ISSB’s IFRS S1 & S2. The first reporting cycle was completed this year for companies meeting the thresholds. Although presented as a disclosure regime, TSRS has significantly expanded board oversight duties, which requires clear articulation of the board’s role in supervising sustainability-related risks and their integration into strategy and risk management. Initial implementation exposed data gaps and capacity constraints.

In parallel, the CMB continues to tighten governance standards for listed companies, with greater scrutiny of independent directors, committees and related-party transactions. Key challenges include ensuring genuine board independence in controlling-shareholder structures, improving the effectiveness (rather than formal existence) of committees, strengthening internal control and documentation practices, and bridging the institutionalization gap in family-controlled companies where ownership and management remain closely intertwined.

The management and representation of a JSC is carried out by the Board of Directors. The board may consist of one or more members, who may be shareholders or third parties. The Board of Directors is responsible for the strategic management, representation of the company, and the exercise of non-delegable duties set out under the Turkish Commercial Code (TCC). Day-to-day management may be delegated to executive board members or third parties, subject to an internal directive.

In publicly held companies, independent directors and mandatory committees (audit, risk and corporate governance committees) strengthen oversight and accountability. The general assembly plays a supervisory role through appointment, removal and discharge of board members.

The management and representation of an LLC is carried out by the Board of Managers. Similar to JSCs, managers conduct daily management and represent the company. At least one of the shareholders of the LLC is required to be appointed as the manager. This way, shareholders retain stronger direct influence over strategic decisions.

In a JSC, management authority is vested in the board of directors, which is responsible for strategy, representation and oversight. Shareholders, as economic owners, do not manage the company but exercise reserved powers through the general assembly. Non-transferable powers include amendment of the articles of association, appointment and dismissal of board members, approval of financial statements, profit distribution and structural transactions.

This structure ensures separation between ownership and management, with accountability secured through appointment, discharge and liability mechanisms. General Assembly resolutions are adopted at duly convened physical or electronic meetings, subject to statutory quorum requirements. For Board of Directors resolutions, in limited statutory cases, written resolutions without a meeting are possible.

In an LLC, management is carried out by one or more managers with at least one manager being one of the shareholders, but shareholders typically retain stronger direct influence. The shareholders’ assembly exercises broader approval powers, and written resolutions without a meeting are more common, reflecting a more concentrated and less institutionalised governance structure.

The principal sources of corporate governance requirements in Türkiye are the TCC, the Capital Markets Law and secondary legislation issued by the CMB. The TCC establishes the core governance framework applicable to all companies, including directors’ fiduciary duties, non-transferable board powers, shareholder rights and internal control obligations.

For publicly held companies, the CMB Corporate Governance Principles constitute the primary governance benchmark. Listed companies are subject to a “comply or explain” regime for most principles, while certain provisions—particularly regarding independent board members and mandatory committees (audit, corporate governance and risk)—are binding.

In addition, sector-specific regulations (e.g. banking and financial services) may impose enhanced governance requirements. The recent introduction of the TSRS, further strengthens board oversight obligations in companies meeting reporting thresholds.

Non-listed companies are not required to adopt a specific governance code but remain subject to the TCC’s mandatory framework.

In a JSC, the company has a single governing body: the board of directors. The board may consist of one or more members, appointed by the general assembly, unless certain members are designated in the articles. Turkish law does not adopt a two-tier system; there is no separate supervisory board. The board holds non-transferable powers, including high-level management, representation and establishment of internal control systems.

While the board may delegate day-to-day management to executive members or third-party managers through an internal directive, it retains ultimate oversight responsibility. In publicly held companies, mandatory committees (audit, risk and corporate governance committees) support the board’s supervisory function but do not replace it.

In a LLC, management is carried out by one or more managers. At least one of the shareholders of the LLC is required to be appointed as the manager.Oversight and strategic authority are exercised more directly by the shareholders’ assembly, resulting in a more concentrated governance model.

In a JSC, board members are appointed and removed by the general assembly of shareholders.

As a matter of principle, shareholders may dismiss board members at any time, even if they were appointed for a fixed term. This reflects shareholder primacy in shaping the composition of the governing body.

From a governance perspective, ownership structure significantly influences board formation. In companies with concentrated shareholding, controlling shareholders effectively determine board composition. In publicly held companies, however, CMB regulations require a minimum number of independent directors, limiting direct owner control and strengthening minority and stakeholder protection.

In a LLC, managers are appointed and removed by the shareholders’ assembly. Given the typically closer alignment between ownership and management, shareholders often exercise direct and immediate influence over managerial appointments and removals.

Board composition and qualifications are structured to balance managerial authority with effective oversight. In JSCs, the board may consist of one or more members who must have full legal capacity.

In publicly held companies, at least one-third of the board—and in any event not fewer than two members—must qualify as independent, meeting strict criteria designed to prevent significant commercial, employment or familial ties with the company or controlling shareholders. Listed companies are expected to adopt a board diversity policy, set a target of at least 25% female representation and disclose progress. Directors are elected for limited terms but may be re-elected.

Companies are also expected to implement succession planning to ensure continuity of management, and significant professional liability insurance coverage must be publicly disclosed.

In LLCs, management may be vested in one or more managers (at least one manager must be a shareholder as mentioned above), including shareholders or third parties; no statutory independence, diversity or tenure requirements apply.

The board plays a central and non-transferable role in setting, supervising and, where necessary, revising corporate strategy. High-level management and strategic direction fall within the board’s core responsibilities and cannot be delegated in full, even where day-to-day operations are entrusted to executives.

The board is expected to define the company’s long-term objectives, approve business plans and budgets, and ensure that strategy is aligned with risk appetite and financial capacity. Effective governance requires that strategic decisions be based on adequate information, documented deliberation and structured risk assessment. The board must also monitor implementation, challenge management assumptions and adapt strategy in response to market, regulatory or financial developments.

In listed or institutionalized companies, strategy-setting is closely linked to internal control, risk management and sustainability oversight frameworks. Ultimately, the board’s strategic role reflects its fiduciary duty to act in the company’s best interests and safeguard long-term value creation rather than short-term shareholder demands.

Board remuneration in JSCs must be determined by the articles of association or by general assembly resolution. Directors may receive attendance fees, fixed salaries, bonuses, premiums or profit shares. Profit-based payments are permissible only from distributable net profit after statutory reserve funds are allocated.

In publicly held JSCs, additional governance safeguards apply. A written remuneration policy must be adopted, submitted to the general assembly as a separate agenda item and publicly disclosed. Independent directors’ remuneration must preserve their independence and cannot be linked to performance-based incentives such as stock options or profit-sharing.

All benefits granted to board members and senior executives, including non-cash advantages, must be disclosed in the annual report. It is also prohibited from granting loans or personal guarantees to board members or executives who are not shareholders.

In LLCs, managers’ remuneration is determined by the general assembly, subject to reserve and profit distribution rules, with no additional statutory governance-specific requirements.

Board members owe fiduciary duties to the company, primarily the duty of care and the duty of loyalty. They must act prudently, in good faith and in the best interests of the company, safeguarding its assets and long-term sustainability.

The duty of care requires directors to make informed decisions, exercise reasonable diligence and ensure appropriate supervision of delegated management. The duty of loyalty prohibits conflicts of interest, misuse of corporate opportunities and unauthorized related-party transactions.

If these duties are breached, directors may face civil liability for damages incurred by the company. Shareholders and, in certain cases, creditors may initiate derivative or direct liability actions. Resolutions adopted in violation of governance rules may also be challenged and annulled. In serious cases involving fraud or abuse of trust, criminal liability may arise. Directors may also be denied discharge by the general assembly.

Board members owe fiduciary duties to the company, primarily the duty of care and the duty of loyalty. They must act prudently, in good faith and in the best interests of the company, safeguarding its assets and long-term sustainability.

The duty of care requires directors to make informed decisions, exercise reasonable diligence and ensure appropriate supervision of delegated management. The duty of loyalty prohibits conflicts of interest, misuse of corporate opportunities and unauthorized related-party transactions.

If these duties are breached, directors may face civil liability for damages incurred by the company. Shareholders and, in certain cases, creditors may initiate derivative or direct liability actions. Resolutions adopted in violation of governance rules may also be challenged and annulled. In serious cases involving fraud or abuse of trust, criminal liability may arise. Directors may also be denied discharge by the general assembly.

Board members are primarily overseen by the general assembly of shareholders, which holds the authority to appoint, remove and discharge them. Approval of annual financial statements and the discharge resolution serve as key accountability mechanisms. Shareholders may also initiate liability actions where directors breach their duties.

In publicly held companies, oversight is reinforced by mandatory board committees, particularly audit and risk committees composed largely of independent directors. These committees monitor financial reporting integrity, internal controls and compliance. Independent directors play an additional supervisory role, especially in related-party transactions and conflict-of-interest matters.

External auditors provide indirect oversight through financial audit processes, while regulators exercise supervisory authority in listed or regulated sectors. Formal board evaluation practices are not mandatory for non-listed companies but are increasingly adopted in institutionalized structures. In listed companies, corporate governance reporting encourages periodic self-assessment and disclosure of governance practices, strengthening transparency and performance monitoring.

The board is not required to engage with shareholders on a continuous managerial basis; however, structured engagement is embedded in corporate governance mechanisms. The primary forum is the general assembly, where shareholders exercise voting rights on appointment and removal of directors, approval of financial statements, profit distribution and discharge. The board must convene the meeting, prepare the agenda and provide adequate information to enable informed decisions.

In publicly held companies, engagement is more formalized through investor relations functions and mandatory public disclosures. The board reports on its activities in the annual activity report, covering financial performance, risk management and governance practices, ensuring transparency and equal treatment of shareholders.

TSRS, on the other hand, does not impose a direct shareholder engagement obligation, however, it strengthens accountability by requiring detailed disclosure of the board’s oversight of sustainability-related risks and their integration into strategy. This enhances the quality of information available to economic owners and reinforces informed shareholder oversight.

Dual-class and multi-class share structures are permitted in JSCs through the creation of privileged shares. The articles of association may grant certain shares enhanced voting rights, dividend privileges or nomination rights for board membership. However, Turkish law limits the extent of voting privileges: in principle, a share may carry a maximum of 15 votes, subject to limited exceptions.

In publicly held companies, privileged structures are permitted but subject to stricter scrutiny, particularly regarding minority shareholder protection and related-party transactions. Capital markets regulations and corporate governance principles aim to prevent abuse of controlling power through disproportionate voting rights.

In practice, multi-class structures exist but are not widespread in listed companies compared to some other jurisdictions. Turkish capital markets have traditionally favored more balanced ownership structures, although controlling shareholders commonly retain influence through privileged shares in closely held or family-controlled companies.

Public disclosure obligations depend on the company’s status. All JSC and LLCs must prepare annual financial statements and, where subject to independent audit thresholds, have them audited. Financial statements must be approved by the general assembly, however, these matter are not subject to the registration with the trade registry or any public platform. On the other hand, companies subject to independent audit must maintain a website and publish legally required announcements.

Publicly held companies are subject to extensive disclosure obligations. They must publish annual and interim financial statements, independent audit reports and annual activity reports. Material event disclosures must be made promptly to inform the market of significant developments affecting financial position or governance. These disclosures are made through the Public Disclosure Platform (KAP), ensuring equal and simultaneous access to information.

Non-financial disclosure has expanded significantly. Companies meeting applicable thresholds must prepare sustainability reports under the TSRS, including governance, risk management and climate-related disclosures. Such reports are publicly disclosed alongside annual reporting, reinforcing transparency and board accountability.

In both JSCs and LLCs, minority owners have rights to influence governance. Shareholders (or partners) holding at least 10% of capital (5% in publicly held JSCs) can request a special meeting or propose agenda items. This must be done in writing (via a notary) to the board (in JSCs) or managers (in LLCs), stating the reason and agenda. If no action is taken within seven business days, the shareholders or partners can apply to the commercial court to authorize the meeting or appoint a trustee.

Additionally, before the meeting notice is issued, owners may ask for agenda items to be added. Both JSCs and LLCs allow “meetings without call” if all shareholders or partners are present and no one objects, enabling unanimous decisions without formal notice periods. These mechanisms ensure minority shareholders or partners can intervene in governance and safeguard their interests when necessary.

Investors, particularly shareholders or partners, have several enforcement rights. In JSCs, shareholders may bring liability actions against board members for breach of their statutory duties where fault causes damage to the company, shareholders or creditors. Shareholders may also seek annulment of general assembly resolutions that contravene the law or the articles of association and request the appointment of a special auditor to investigate specific transactions.

In LLCs, partners enjoy similar liability and annulment rights against managers and general assembly decisions. In addition, any partner—regardless of shareholding ratio—may apply to the commercial court for dissolution of the company on “just cause” grounds, such as serious mismanagement or breakdown of mutual trust.

In both structures, court intervention serves as a key accountability mechanism, enabling economic owners to challenge unlawful conduct and protect their investment.

Shareholder activism in Türkiye is relatively limited compared to more dispersed ownership jurisdictions, primarily due to the prevalence of controlling shareholders and family-owned structures. However, activism has gradually increased in publicly held companies, particularly among institutional investors and minority shareholders focused on transparency, related-party transactions and board independence.

Recent trends show greater engagement around corporate governance standards, dividend policies and board composition. Institutional investors increasingly rely on voting policies and public disclosures to assess governance quality. Litigation-based activism remains uncommon but is used in cases involving alleged conflicts of interest or unlawful general assembly resolutions.

Shareholders exert influence primarily through voting rights at general assemblies, proposing agenda items, requesting special meetings and initiating annulment or liability actions. In listed companies, engagement also occurs through investor relations mechanisms and public disclosure channels. While activism remains moderate in scale, regulatory developments and enhanced disclosure obligations are gradually strengthening minority shareholder engagement and oversight capacity.

An ordinary general assembly must be held once a year, within three months following the end of the financial year. Extraordinary meetings may be convened whenever necessary.

At the annual meeting, shareholders must be presented with the board’s annual activity report, financial statements, independent audit report (if applicable), and proposals regarding profit distribution. The general assembly also resolves on approval of the financial statements, discharge of board members or managers from liability, election or removal of governing body members where required, and determination of their remuneration.

In publicly held companies, additional disclosure and documentation obligations apply, including detailed information on related-party transactions and corporate governance compliance.

Meetings may be held physically or electronically (if expressly included in company’s articles of association), provided statutory procedures regarding notice, agenda publication and quorum are satisfied. These requirements ensure transparency and informed shareholder decision-making.

In Türkiye, proxy advisory activity is relatively limited compared to more developed markets; however, certain institutional mechanisms influence voting behavior. Large institutional investors, including pension funds and asset management companies, typically adopt internal voting policies and governance guidelines that shape their voting decisions at general assemblies.

For publicly held companies, corporate governance ratings issued by authorized rating agencies may indirectly influence investor voting behavior. These ratings assess compliance with corporate governance principles and are publicly disclosed, providing investors with structured governance analysis.

International proxy advisory firms may also provide voting recommendations to foreign institutional investors holding shares in Turkish listed companies, particularly in significant or contested matters.

While there is no highly developed domestic proxy advisory industry, voting outcomes in listed companies are increasingly influenced by institutional investor policies, governance ratings and public disclosure practices, rather than purely by retail shareholder participation.

Other stakeholders do not participate directly in corporate decision-making; however, their influence on governance has increased significantly. Debt-holders shape governance through financing covenants, reporting requirements and restructuring negotiations. Regulators exercise substantial influence through licensing, supervision and enforcement, particularly in regulated sectors.

Employees do not have statutory board representation rights, but labor law, collective agreements and workplace compliance obligations indirectly affect governance practices. Suppliers and customers may exert commercial leverage through long-term contractual relationships.

The TSRS further strengthen stakeholder visibility. Companies within scope must disclose how sustainability-related risks and opportunities affect their strategy and risk management, including impacts connected to workforce, value chain and broader stakeholder groups. While TSRS does not grant decision-making rights to stakeholders, it increases transparency regarding how the board considers stakeholder-related risks, thereby reinforcing accountability and reputational oversight.

More broadly, regulators and public authorities play a central role in setting and enforcing governance standards, while community expectations increasingly shape transparency, sustainability and reputational risk management frameworks.

The governing body is required to act in the best interests of the company as a separate legal entity, which indirectly requires consideration of non-shareholder stakeholders whose interests affect long-term sustainability and risk exposure. Stakeholder interests are primarily integrated through regulatory compliance, contractual relationships and governance expectations rather than formal representation in decision-making bodies.

In publicly held companies, stakeholder considerations are reinforced through corporate governance principles applied on a “comply or explain” basis, encouraging boards to establish communication mechanisms with employees, suppliers and customers and to consider stakeholder engagement in management processes.

The TSRS further strengthens this approach by requiring disclosure of how sustainability-related risks and opportunities are identified and overseen by the board. The application of a double materiality perspective obliges companies to assess environmental and social impacts across their value chain, prompting boards to incorporate stakeholder-related risks into strategy, risk management and reputational oversight.

Consideration of ESG issues in Türkiye has increasingly become a matter of corporate governance rather than voluntary corporate policy. Boards are expected to address ESG-related risks as part of their oversight of strategy, risk management and long-term value preservation. ESG topics are typically incorporated into internal control systems, risk assessments and disclosure practices, reflecting a broader understanding of directors’ duty of care.

The key legal framework arises from the TSRS, which require in-scope companies to disclose governance structures overseeing sustainability risks, including climate-related matters, and explain how these risks are integrated into strategic planning and financial decision-making. This effectively elevates ESG oversight to board level.

In listed companies, corporate governance principles further reinforce transparency, stakeholder consideration and sustainability policies under a “comply or explain” approach. Environmental, labor and compliance regulations also indirectly shape governance expectations by requiring boards to manage legal, operational and reputational risks linked to ESG matters.

Investors in Türkiye generally do not owe fiduciary duties to the companies in which they invest; however, certain disclosure and market conduct obligations apply, particularly to significant shareholders. Investors must disclose acquisitions or disposals of shares when statutory ownership thresholds are reached, exceeded or fallen below, ensuring transparency regarding ownership structure and potential control.

Shareholders primarily exercise influence through voting rights at general assemblies, including participation in decisions on board appointments, financial statements, dividend distributions and significant corporate transactions. In practice, investor engagement tends to be limited, as many companies have concentrated ownership structures in which controlling shareholders retain decisive influence.

Investors are also subject to insider trading and market abuse regulations, which impose confidentiality obligations and trading restrictions when non-public information is possessed. Increased disclosure requirements, including sustainability reporting, further enable investors to monitor governance practices through publicly available information rather than direct managerial involvement.

In Türkiye, the traditional corporate focus has often been shaped by controlling shareholders and macroeconomic volatility, which can increase sensitivity to short-term liquidity, dividends and balance-sheet protection. In closely held and family-controlled groups, strategic decisions may prioritise capital preservation and operational resilience, particularly in high-inflation or FX-volatile periods.

That said, the direction of corporate governance expectations is increasingly aligned with longer-term value creation. Boards are expected to demonstrate structured oversight of risk management, internal controls and strategic planning, rather than adopting purely opportunistic, short-term approaches. This shift is reinforced by capital markets expectations and, more recently, by mandatory sustainability reporting under TSRS (aligned with ISSB standards), which requires disclosure of how sustainability-related risks and opportunities are integrated into strategy and financial planning.

In practice, this creates a gradual rebalancing: while short-term pressures remain material, transparency and governance frameworks increasingly push boards toward articulating long-term strategy, resilience and value preservation to investors and regulators.