The Board of Directors’ Overall Supervision Duty and Power in Joint Stock Companies
Dr. Yurdal Özatlan
Various regulations are stipulated in the Turkish Commercial Code No. 6102 in order to spread the corporate governance philosophy to joint stock company managements. In particular, the provisions introduced to make the boards of directors more effective in the management of the company, the special arrangement of some of the inalienable and indispensable duties and powers of the board show the goal of professional management. One of these duties is the overall supervision duty regulated by Article 375/1-(e) of the TCC. The task in question is assigned to the board of directors to overall supervise whether the persons entrusted with managing the company, “in particular with regard to compliance with the law, articles of association, operational regulations and directives”. Due to its inalienable and indispensable nature, this duty may bring up the legal liability of the members due to its performance as well as its continuous nature. In order to adequately fulfill the duty of overall supervision, the boards of directors are expected to establish committees consisting of experts within the company when necessary and to establish an active reporting system. Thus, the board will be able to keep the management under continuous supervision and give instructions to the people in charge of the management when necessary, as well as to carry out the task effectively by making decisions for the dismissal of these people. Overall supervision is the duty to keep the management of the company under supervision in both legal and operational terms. It is seen that the duty of overall supervision has an important function in establishing a corporate governance approach that includes the principles of equal and fair management, transparency, accountability and responsibility in the joint stock company.
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Key words: Overall Supervision, Overall Management, Corporate Governance, Compliance, Legal Liability