Good Corporate Governance and Sustainable Growth
Background
The Turkish economy has recovered very significantly from the most severe crisis of its recent history faced in February 2001. The reasons leading behind the scenario were also stemming from some serious public governance deficiencies, notably the influence of internal politics on public financing. When today is compared with the period of 2002, examined in OECD Regulatory Reform Review of Turkey, the improvement on the corporate governance issue is obvious. But further improvement requires further sustainable progress in various ranges extending from efficiency to the fairness of the judiciary system and regulatory quality.
Still in Turkey , the level of foreign direct investment is very low compared to the entrepreneurial potential. In general, the cost of capital is still high and access to appropriate finance is limited. There are indications that there is a relation between the low level of foreign investment, and good public and corporate governance practices. The strategic investors are not convinced that the economic environment is institutionalized in such a way that it will provide sustainable economic stability.
The relations between the corporate and public governance, the investments and the participation of all stakeholders to the process, are other significant issues related to the subject. The publics’ regulatory role, the businesses involvement and implementations, and the civil society’s active participation will play a significant role in the sustainable development of the capital markets in Turkey .
Turkey is the leading market economy in her surrounding region. Therefore, a successful development in good governance continued with sustainable growth would make her a role model in the region.
It is expected that the GOOD program will assist the Turkish public and especially the key actors to further explore different dimensions such as; corporate ownership structures, management patterns and strategies, accountability, voting rights, transparency, disclosure, the applicable legislation and regulations as well as other aspects relevant in today’s corporate governance domain and explore solutions.
Co-Sponsors
Program Objective and Aim
Main Sponsor
The Swedish Trade Council together with the Swedish Embassy in Ankara and the Capital Magazine of Turkey has taken the initiative to organize a program on the topic of “Good Corporate Governance and Sustainable Growth”.
The main objective of the GOOD program is to create awareness and differentiation on the understanding of “good corporate governance principles”, which are very important long-term assets on the way of EU for Turkey , who is among the most attractive countries for foreign investment.
The first step is to increase the familiarity and the persuasion of “good corporate governance” on a larger audience. After the analysis of the current situation, to deepen the knowledge and to determine the best practices in order to add value to the Turkish public, to the management quality of the companies and naturally to the sustainable growth of Turkey.
Program Scope
The GOOD program is the most comprehensive program yet executed in Turkey on this subject.
he GOOD program started with the presentation of the research results at the 31 st of January 2006, which was conducted by MORI house of London . The first panel discussion took place on the 7 th of March and continued with the panel discussions on the 27 th of April and 1 st of June. The program will end with an international conference on the 14 th of November
Program Committee
The GOOD program is managed by an executive board consisting of the Swedish Trade Council and Capital Magazine. NGOs and other relevant parties and organizations are asked to assist in shaping the program and to provide speakers.
Program Outline
1) Research
The Reputation of Capital Markets
A research was conducted together with the Capital Magazine of Turkey, on which the perception of the public, the opinion leaders and international investors on good corporate and public governance and business ethics concepts was explored. The study investigated the impact of the issue to attract investors. The research also explored the importance and priority of business ethics and good corporate governance for public, businesses and the civil society.
The GOOD program began with the publication of the research conducted by MORI in the Capital Magazine. The results were announced on the 31 st of January with a press conference and a small panel discussion. Sir Robert Worcester, honorary president of MORI, presented the results of the research as a keynote speaker.
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Panel Discussion - 7 March 2006 The Mobilization of Capital and Corporate Reputation
In the light of the research, the “reputation” issue which is crucially necessary to strengthen & deepen the mobilization of capital in Turkey was discussed. The points raised were the companies’ definition of the problems on their path transcending from acquaintance to favourability. At the following step, the relations between business ethics, corporate governance and companies’ market cap while establishing the respectfulness of the companies, were clarified. In today’ s business world, where the competition gets harder and the brands have less to say, the effect of new concepts, such as “reputation”, as intangible assets on the balance sheets were discussed. It was mentioned that even the added-value of “CEO reputation” can be measured financially. |
Panel Discussion - 27 April 2006 Good Governance and Value-Added Foreign Investment
The third event of the GOOD program was realized on April 27 th. The effect of EU process on corporate governance, the differentiation between the value-added investment and “hot money”, the importance of the foreign investment on the sustainable development were emphasized. The necessity of a socio-economic substructure raised from business ethics, corporate governance, and social responsibility were also exposed. |
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Panel Discussion - 1 June 2006 Corporate Governance and Sustainability
This panel, which concentrated on the importance of good governance, corporate citizenship, business ethics and social responsibility for the sustainable growth took place on June 1 st.
The improvements on corporate governance and social responsibility for the sustainability and the best practices were among the main subjects of this panel. Starting with the country cases on sustainable development, the concrete steps taken so far by Turkey over the subject was formulated. Also, the role and responsibility of stakeholders such as independent governmental authorities, civil society organizations, and international organizations and business were mentioned.
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Conference - November 2006 GOOD 4 BUSINESS & SOCIETY
During the first three panels the first objectives of the programme; to create the awareness and to increase the involvement by the business society has been realized. The coming conference will now concentrate on which actions are to be taken to realize the aim of Good Corporate Governance and Sustainable Growth.
Although the corporate governance concept is relatively new, it is highly becoming among the top issues nowadays. On one hand, the general principles of good corporate governance have been deployed in order to obtain a “benchmark” while on the other hand one has promoted that every country and even every company needs to create its own tailor-made principles in order to develop and get full-achievement.
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Financing A project of this extent with rich content and with heavy media coverage cannot be realized without contributions from sponsor companies.
After discussions with TeliaSonera, the company has declared itself to be the main sponsor of the program aiming to increase the public awareness on the importance of good corporate governance on foreign investment in Turkey .
Co-sponsors of the program are: ABB, Alarko, Atlas Copco, Denizbank, Doğuş Otomotiv/Scania, Ericsson, Fortis, Hifab, IKEA Trading, and Tetra Pak.
The supporters of the program are: Capital Markets Board of Turkey, Corporate Governance Association of Turkey and Business Council for Sustainable Development Turkey.
Swedish General Consulate of Istanbul and Swedish Trade Council, are also offering their contributions.
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