Good governance as a catalyst for capital flows

There is growing evidence that good corporate governance has a proven correlation on the sustainability of the business, its long-term performance, and credit quality, according to research studies done by reputable institutions. Moreover, a robust governance framework may have a material bearing on the ability of the business to attract investor capital.

Board directors and top executives are increasingly under pressure from stakeholder capitalism, faced with litigation, reputational damage and regulatory fines. Owners of capital – asset owners, asset managers and individuals – are one of the big drivers of such activism, supported by technology and social media to help broaden their influence.

Boards, as company stewards, must uphold their fiduciary duty and advocate for best practices to ensure impartial decision-making, transparency, and effective oversight. Spencer Stuart’s 2023 Turkey Board Index report (based on Borsa Istanbul 30 companies) highlights that while some progress has been made on corporate governance practices, Turkish boards tend to have concentrated ownership structures in the form of family-controlled financial/industrial groups. Furthermore, these individuals sit on boards of different companies, resulting in an “overboarding” situation and thus, limiting diversity of perspectives on boards which are already behind their peers on gender diversity. On the other hand, a significant growth in independent and foreign directors in recent years indicates that atleast some companies are seeking independence and international perspectives on their boards.

Impact Boards EM and Delphos will bring together board directors with stakeholders that are influencing the flow of capital towards well-run businesses. Our expert panel will discuss how corporate boards in Turkey can tackle the challenges and leverage on the recent positive developments to improve governance and align better with investor expectations to attract capital.