2015 FINANCIAL YEAR CORPORATE GOVERNANCE COMPLIANCE REPORT
The 2015 Corporate Governance Compliance Report of Turkcell İletişim Hizmetleri A.Ş (the “Company”) has been prepared in accordance with the format disclosed in the Capital Markets Board Bulletin no. 2014/02, dated January 27, 2014.
SECTION 1- CORPORATE GOVERNANCE COMPLIANCE STATEMENT
We have begun to implement Corporate Governance mechanisms in parallel with the Corporate Governance efforts we launched in tandem with the Company’s IPO and accelerated in 2003 by establishing an Investor Relations Department. This step was based on the belief that maintaining high standards of corporate governance is crucial to the perpetuation of successful business practices and the generation of longterm economic value for the Company’s shareholders.
Regarding principle no. 1.6.1 of the corporate governance principles specified in the annex of the Corporate Governance Communiqué (”Communiqué”) No. II-17.1 on the Corporate Governance of the Capital Markets Board (CMB) in effect during the financial year of 2015, the Dividend Distribution Policy of the Company, which has been adopted by our Company’s Board of Directors under its resolution no.1104, dated February 18, 2014 and has been disclosed to the public, was submitted to the first ordinary General Shareholders’ Meeting held on March 26, 2015 for approval within the framework of Article 19 of the Capital Markets Law (CML) and the Dividends Communiqué provisions of the CMB. On the other hand, non mandatory principles which do not necessarily have to be applied with regard to the Company have been substantially adopted by the Company. Regarding principle no.1.3.11, the General Shareholders’ Meetings of the Company are held in a manner closed to the media and the results thereof are immediately made public.
With corporate governance principles being adopted and applied in our Company, amendments to the Articles of Association which are mandatory based on conformity to the principles were submitted to the first ordinary General Shareholders’ Meeting held on 26 March 2015 for approval through being bound to the decision of the Board of Directors and receiving the appropriate opinion of the CMB and the permission of the Ministry of Customs and Trade; however, they could not be finalised as a sufficient quorum was not reached. In the following General Shareholders’ Meeting, amendments to the Articles of Association were also aimed. On the other hand, the process regarding the election of independent members could not be initiated due to conflicts continuing between the controlling shareholders of the Company and brought before the court , and the election of other members of the Board of Directors and the determination of the office term, which were on the agenda at the General Shareholders’ Meeting held on March 26, 2015 could not be put to a vote as there were no proposed candidates. In this regard, conformity with the principle no.4.3.7 is aimed in the following general shareholders meetings.
SECTION 2 – SHAREHOLDERS
Shareholder Structure (31 December 2015)
|SHAREHOLDER||NOMINAL VALUE (TRY)||PERCENTAGE SHARE|
|Turkcell Holding A.Ş.||1,122,000,000,238||51.00%|
|Sonera Holding A.Ş.||287,632,179,557||13.07%|
2.1 Investor Relations Department
The communication between Turkcell İletişim Hizmetleri A.Ş. and its investors is maintained through the Investor Relations and Business Development Department, reporting to the Deputy General Directorate of Strategy. The duties stipulated in article 11 of the Communiqué are performed by our Company’s full-time employees whose contact details are given below.
Investor Relations and Business Development Department Executive: Nihat Narin
Address: Turkcell Küçükyalı Plaza, Aydınevler Mahallesi İnönü Caddesi No:20 B Blok Küçükyalı Ofispark 34854 Maltepe/Istanbul
Phone: +90 (212) 313 18 88
Licence: Capital Market Activities Advanced Level Licence No: 207872,
Corporate Governance Rating Specialist Licence No: 701483
Investor Relations Officer: Müge Tüzmen Orman
Address: Turkcell Küçükyalı Plaza, Aydınevler Mahallesi İnönü Caddesi No:20 B Blok Küçükyalı Ofispark 34854 Maltepe/Istanbul
Phone: +90 (212) 313 18 88
Licence: Capital Market Activities Advanced Level Licence No: 205763
The main activities of the Investor Relations Department in 2015 are briefly summarized as follows:
- The maintenance of the records with respect to the correspondences between the investors and the Company as well as other information and documents has been ensured in a reliable, safe and up-to-date manner and the transactions at Merkezi Kayıt Kuruluşu A.Ş. (Central Registry Agency) have been coordinated with the Legal Affairs Department.
- The questions addressed to the department and the shareholders’ requests for information regarding partnership during the reporting period, excluding those regarding undisclosed information considered as confidential and a trade secret, have been responded in an open and transparent manner either face-to-face or through various communication means in accordance with the disclosure policy of the Company.
- During the reporting period, the ordinary General Shareholders’ Meeting was held in cooperation with the related departments and the Legal Affairs Department in accordance with the provisions of the applicable law, Articles of Association and other internal rules and regulations.
- Methods to facilitate the participation of shareholders in the general assembly of shareholders and to strengthen communication during the meeting have been developed; an Investor Package containing documents, of which shareholders can make use, has been created; and the website is regularly updated so that shareholders can have constant and open information.
- The Company’s shares performance, and domestic and international comparable Company financial and operational benchmark analyses have been conducted and the outcomes of these studies have also contributed to the Company’s communication strategies.
- Documents regarding the issuing of bonds in 2015 were prepared, information concerning a road show in America and Europe was transferred for bond investors, and the important information for the investors to follow was shared on the website.
- In addition to material event disclosures made in accordance with the legislation, the coordination of the communication with the public has been ensured, meetings with investors and analysts have been made, additionally conferences, panels, seminars and road shows have been participated in by paying regard to the fulfilment of obligations arising from the Capital Markets Legislation including any issue related with the corporate governance and the public disclosure.
During 2015, the Investor Relations Department participated in 15 investor conferences (2 domestic and 13 international); held 25 investor meetings at the Company headquarters, and communicated with 460 analysts and investors. Furthermore, said departments also spoke to 53 bond investors at the bond road shows held in America and Europe. Over 1,000 information requests were received during the year via phone or e-mail, all of which were responded to.
The Investor Relations Department regularly provides the Board of Directors with a report regarding the operations which are carried out. Additionally, the strategy plan regarding the Investor Relation pertaining to the next year is presented to the CEO at the end of each year.
2.2 The Use of Shareholders Rights to Obtain Information
The Company’s shareholders and stakeholders made many requests for information concerning various subjects throughout 2015. These requests, excluding those concerning undisclosed information considered as confidential and a trade secret, were filed in an open and transparent manner within the shortest time possible in accordance with the disclosure policy of the Company.
The Company launched its website (www.turkcell.com.tr) in 1996 and began to provide its shareholders, both local and foreign, with information foreseen for the website within the CMB’s Corporate Governance Principles in both Turkish and English, under the Investor Relations section of the website allowing them to exercise their right to information. Updating and monitoring information posted on the Company’s website was carried out under the responsibility of the Investor Relations and Business Development Department.
As per the regulations, the disclosures filed to the Public Disclosure Platform (KAP) were also provided to those registered in the Company’s database by e-mail, social media and smartphone application, both in Turkish and in English.
During the year, no information or disclosures which could influence the exercising of shareholding rights were published on the website of the Company.
The appointment of a special auditor has not been separately included in the Company’s Articles of Association since this is a right extended to the minority shareholders by law. During the period, no requests for the appointment of a special auditor were submitted.
2.3 General Shareholders’ Meetings
Pursuant to Article 410 of Turkish Commercial Law, the Company Ordinary General Meetings of 2010, 2011, 2012, 2013 and 2014 were held at the head office at the following address: Turkcell Plaza Meşrutiyet Cad. No: 71 Tepebaşı Beyoğlu, Istanbul on 26 March 2015 upon the invitation of the Board of Directors.
The convocation pertaining to the General Shareholders’ Meeting dated March 26, 2015 was made in a timely manner by publishing the same in the Turkish Trade Registry Journal Issue No. 8768, dated February 27, 2015 and Dünya Newspaper dated February 27, 2015 and Güneş Newspaper dated February 27, 2015 announcing it on the Electronic General Assembly System (EGKS) and on the Company’s website at www. turkcell.com.tr and on the Public Disclosure Platform as well as notifying the same to the holders of the registered shares through registered letters with a return receipt so as to contain the agenda and the date of the meeting, the Capital Markets Board Corporate Governance Principles and the Articles of Association and furthermore, the shareholders were provided with access to all kinds of information including the annual report and the financial statements related to the General Shareholders’ Meeting including the announcement thereof on the website of the Company and the same was made available in hard copy at the Company’s registered office for the examination of shareholders within the scope of the Corporate Governance Principle no 1.3.1. At the same time, invitations were also issued for the shareholders abroad. The General Shareholders’ Meeting convened in a manner closed to the media.
The agenda of the General Shareholders’ Meeting included the items of approving the balance and profit and loss account regarding the activities in 2010, 2011, 2012, 2013 and 2014; discussing and resolving the acquittals of the members of the Board of Directors and statutory auditors as of the terms they are assigned and determining the date of the profit distribution; approving the amendments to the Company’s Articles of Association drawn up for the purpose of compliance with new Turkish Commercial Code No.6102 and Capital Markets Law No.6362 containing the appropriate views of the CMB and permission of the Ministry; approving the Internal Directive on Working Principles of General Shareholders’ Meetings; electing new board members and determining their duty periods; electing independent auditors for 2015; discussing and approving the “Company Dividend Distribution Policy” within the Corporate Governance Principle; informing the Shareholders about the “Compensation Policy” for the Members of the Board of Directors and the Senior Executives as per the Corporate Governance Principles; providing information about the donations and the aids granted in 2011, 2012, 2013 and 2014; discussion of and decision on Board of Directors’ proposal concerning determination of donation limit to be made in 2015, starting from the fiscal year 2015; granting permission to the Company’ members of the Board of Directors as per the provisions of Articles 395 and 396 of the Turkish Code of Commerce; providing the shareholders with the information about securities, pledges and mortgages provided in favour of third parties as well as incomes or benefits acquired by the Company under the regulations of the Capital Markets Board.
2.4 Voting Rights and Minority Rights
Pursuant to the Articles of Association of the Company, there is no concession regarding the voting right for any group or shareholder.
The minority shareholders and beneficiaries are not represented in the Board of Directors and the rate stated in the Turkish Commercial Law and Capital Markets Law provisions concerning minority rights are applied.
However, three independent board members serve to equally represent all shareholders, particularly minority shareholders, and benefit holders.
The Company has no mutual shareholding relation with its affiliates and subsidiaries and thus, no situation which would require voting rights stemming from such a relationship to be frozen at the General Shareholders’ Meeting has taken place as of December 31, 2015.
2.5. Right to Dividend
The Articles of Association do not grant any privileges regarding participation in the Company’s profits. Each share is entitled to an equal dividend.
The Dividend Distribution Policy of the Company approved under the Board of Directors’ resolution dated May 13, 2013 and revised pursuant to the Capital Markets legislation and adopted under the Board of Directors’ resolution no. 1104 dated February 18, 2014 to be submitted to the General Shareholders’ Meeting for approval was announced to the public and has been approved by the General Assembly.
Each year, the annual report includes the dividend distribution policy and information regarding dividend distribution as required by the legislation.
The distribution of dividend pertaining to 2010, 2011, 2012, 2013 and 2014 was resolved at the Ordinary General Shareholders’ Meeting held on March 26, 2015 and a decision was made to distribute the net distributable profit for the period within the Company’s financial statements which were published considering the Company’s cash position and requirements in the following sums after the contingency reserves which have to be allocated as per the mandatory provisions of the Company’s Articles of Association, Turkish Commercial Code No. 6102 and Capital Markets Law No. 6362 have been allocated for each financial year in the agenda, and another decision was made to distribute the following sums to the shareholders by April 6, 2015 at the latest.
2010 TRY 753,000,000
2011 TRY 503,000,000
2012 TRY 885,000,000
2013 TRY 990,000,000
2014 TRY 794,000,000
The dividend distribution policy of the Company has been announced on the Company’s website and submitted to the KAP after having been approved by the Board of Directors. This policy states that by taking into consideration the operational performance, financial status of the Company and further developments in other factors, and subject to the Company’s cash projections, business outlook, investment plans and capital market conditions, approval of and amendments by Board of Directors and the General Assembly and pursuant to the applicable legislation in Turkey, the dividend payout in cash shall not be less than 50% of the Company’s distributable net income.
2.6. Transfer of Shares
While there is no limitation in the Articles of Association of our Company with respect to the transfer of shares, the provisional article 4, clause 1, paragraph c, phrase 4 of the Authorizing Regulations Relating to the Electronic Communication Sector to which we are subject to states that the written approval of the Information and Communication Technologies Authority is required for “share transfers, acquisitions and movements resulting in a change of control”.
SECTION 3 – PUBLIC DISCLOSURE AND TRANSPARENCY
3.1. Corporate Website and Its Content
Turkcell’s corporate website (www.turkcell.com.tr) was launched in 1996 in order to provide shareholders, stakeholders and the general public with information in an open, clear and timely manner. Turkcell has disclosed the Communiqué on Corporate Governance Principles as well as resolutions and announcements concerning the implementation of these principles published by the Capital Markets Board on the Company’s corporate website under the Investor Relations section (http://www.turkcell.com.tr/en/aboutus/investor-relations) and regularly provides updates. The website content is also provided in English. The Company website additionally includes matters specified in the corporate governance principles.
3.2. Annual Report
The 2015 Annual Report was prepared by paying regard to the Turkish Commercial Code and its related legislation, as well as the Capital Markets legislation, and corporate governance principles within this scope.
SECTION 4 – STAKEHOLDERS
4.1 Stakeholder Communication
Turkcell informs its stakeholders by organizing pre-scheduled and regular meetings such as employee communication meetings, platforms where the employees can communicate their ideas and provide their suggestions, supplier events for the members of the supply chain, business partner events for the partner companies of Turkcell for providing value-added services and dealership meetings. Information is shared at periodic meetings, and/or through e-mail and intranet system.
The Company has set policies and procedures to inform its employees and stakeholders.
It is possible for Turkcell customers to reach the Company for their questions through various communication channels. Questions can be communicated in writing or verbally through Turkcell Customer Services Call Centres and Video Customer Services at 532 or 5325320000, over Turkcell Service accounts on social media, complaint sites or via government institutions and organizations. Although the Company receives questions or complaints through various channels, these are directed to one centre which handles and resolves them as necessary. The Company has established a necessary infrastructure for transferring complaints through relative channels and this infrastructure is continuously updated.
4.2. Participation of Stakeholders in Management
There is no special arrangement concerning the participation of stakeholders in management; however, when required, stakeholders (themselves)/senior managers are invited to participate in Board of Directors meetings in order to provide information. Shareholders and other stakeholders are represented by independent members with seats at the Board of Directors.
4.3. Human Resources Policy
The main principles of our Company’s Human Resources Policy are to provide high ethical standards determined by Turkcell Common Values and Business Ethic Rules by adopting the responsibilities of the employees against society, the market, the Company and each other.
Human Resources (HR) processes within the Company are developed by an Organisational Development team reporting to the Deputy General Directorate of Business Support, and the Turkcell Employee Relations Management Department executes these processes.
The duty and the authority of conducting employee relations have been assigned to Seyfettin Sağlam, the Executive Vice President of Business Support. The main tasks of the said individuals are to secure employee commitment, and to enhance organizational efficiency, to design all HR strategies, policies and implementations and to ensure their implementation in accordance with our strategic priorities.
Written procedures and guidelines concerning all Human Resources processes (recruitment, career movements, performance and talent management, human resource planning, compensation and benefits, organizational development and process improvements, internal communication) are available and these documents are kept in a portal that is accessible by all employees. Furthermore, employees are informed about these subjects on a regular basis via internal postings and e-mail.
In Recruitment, Training & Development, Performance and Talent Management, Career Management, Compensation and other human resources processes, all employees are treated equally in accordance with the equal opportunities policy without any discrimination of ethnicity, language, religion, race or gender.
In 2015, the Company had not received any complaints of discrimination from its employees.
Job descriptions, performance and rewarding criteria were determined with the internal guidelines of the Company and these documents are kept in a portal that is accessible by all employees.
4.4. Code of Ethics and Social Responsibility
Code of Ethics
The Company’s Code of Ethics has been regulated by Turkcell’s internal directives of Common Values and Business Ethics Rules. Turkcell’s Business Ethics Rules are in unity with Turkcell’s policies, values and principles, and all employees including the senior management are requested to comply with them.
Each employee of Turkcell is obliged to notify the cases and the allegations which may constitute a contradiction with the rules and the regulations set forth in Turkcell’s Common Values and Business Ethics Rules Handbook or which cause reasonable doubt or concern for constituting such a contradiction to Turkcell’s Ethics Committee through suitable notification channels. Being a part of the stakeholders, the employees may directly inform the Audit Committee or indirectly inform them via internal forms on the intranet, or by telephone, or e-mail the Ethics Committee regarding transactions that are contrary to the legislation and are unethical. On the other hand, the transactions of other stakeholders such as customers and suppliers which are contrary to the legislation and are unethical are conveyed to the Ethics Committee or the Audit Committee by way of notification and complaint.
In general, the Code of Ethics is posted on the Company’s corporate website, under the Investor Relations section under the Corporate Governance heading. These codes of ethic are complementary to other related policies, codes of conduct, and guides that have already been published or shall be published by the Company. Training programmes and notifications are provided to employees through various channels during the year in order to increase their awareness and acknowledgement with respect to the Common Values and Business Ethics Rules.
Ongoing and new social responsibility projects of the Company in 2015 are listed below.
Contribution to Education
The Snowdrops Project which was recognized globally by the United Nations in March 2010 as an “exemplary” scheme marked its 15th anniversary. Following the completion of their high school and university education, thousands of our Snowdrops have embarked upon their careers. To date, we have provided over 100 thousand scholarships to 30 thousand girls and we continue to support students, including those with disabilities, for their high-school and university education as part of the project.
- People Without Boundaries
We employ 500 disabled citizens at Turkcell Group and Turkcell Call Centers. 50% of our employees at Turkcell Global Bilgi Van-Erciş Call Centers are disabled.
We support the development of disabled students towards education and employment to increase the competencies of disabled children with special education requirements and to enable them to become part of social life with the “Education Without Boundaries Program” under the auspices of the Ministry of Education. As part of this program, we plan to create professional workshops and technology classes in 80 schools where disabled students receive special education. In 2015, we have constructed 10 schools, reaching our target. Our aim is to reach 10 thousand students within 2 years.
We also offer “Turkcell – YGA Visually Impaired Individuals’ Leadership Program” to visually impaired students. Twenty five visually impaired students who successfully complete the program, where disabled leaders with the potential to be role models are trained, participate in a Leadership Camp. Ten stars are then selected from among the candidates who are trained for 10 weeks at workshops, receive one-on-one coaching from a role model leader.
With Turkcell’s support, the “Dialogue in the Dark” Exhibition, where participants experience the everyday lives of the visually impaired, have enriched its content and also provides employment opportunities to the visually impaired guides.
With the “Turkcell My Dream Companion” service, disabled citizens can listen to the following free of charge: recent news from Turkey and around the world, columns, thousands of books including world classics, personal development guides and fairy tales; information services such as astrology, exchange rates, weather forecasts and Goals on Mobile. The “Audio Description” service, which we have included in this service, is now available through a mobile application for the first time in the world. With “Audio Description”, in which the scenes in films without dialogue are described in detail, the visually impaired can watch movies with the same joy as any moviegoer.
Diverse range of courses for the hearing impaired with sign language and subtitles can be reached through “Academy Without Borders” within Turkcell Academy. Turkcell Academy continues to provide “Turkish Sign Language” courses in cooperation with the Federation of the Deaf. Furthermore, visually impaired individuals can learn to use smartphones with iOS-Android courses developed for them.
Through our partnership with the Turkish Football Federation and Turkish Blind Sports Federation since 2013, we continue to be the “Main Sponsor” of The National Blind Football Team and the Name Sponsor of the “Turkcell Those Who See The Sound League,” which is a football league for the visually impaired.
Our National Blind Football Team became the European Champions, defeating its rivals in the 2015 European Championship. Furthermore, with this championship the team has qualified to take part in the 2016 Rio Olympics.
- Developers of the Future
Through Developers of the Future Project, which we built on our desire to contribute to increasing Turkey’s share of the software economy, and our need to ascertain how to create value for the ecosystem two years ago, we facilitate educational, developmental and employment opportunities in informatics young people. Nearly 60 thousand people have benefited from the “gelecegiyazanlar.turkcell.com.tr” platform. To keep the youth up-to-date on developments in the software sector, we held face-to-face meetings with over 6,500 students at 101 universities in 81 cities in Turkey. 11,000 developers were issued certificates of achievement, confirming their readiness to contribute to Turkey’s growing potential.
Contribution to Sports
We continue to provide support to the team sports of basketball and football, and to the individual sports of athletics and swimming.
Football and Basketball Sponsorships
We support the National Football Team since 2002 through our sponsorship. Having successfully qualified for Euro 2016, the National Team will represent our country at the European Championship in France in 2016. We will continue to support the National Team until 2019.
This year, we have also added “Official Communications Sponsorship of Spor Toto Super League” to our sponsorships and “Professional Footballers Awards Sponsorship”. Our support for football will increasingly continue in 2016.
We continue to support our National Basketball Team, which represented our country at the 2015 European Basketball Championship, as a sponsor since 2002.
We have planned to invest TRY 28 million in the Swimming and Athletics Performance projects under the auspices of the Turkish Ministry of Youth and Sports.
We are active at every stage of the project that aims to train 200,000 qualified athletes, and to attain international success for Turkish sports. Our focus remains on the training of promising national athletes for the 2016 and 2020 Summer Olympics. Moreover, our aim is to create federations with strong corporate structures and sustainable success, and to extend these sports to a wider group of people.
Contribution to Culture and Arts
We have been the Communications and Technology Sponsor of Istanbul Modern, Turkey’s first contemporary art gallery, since 2012. We have developed solutions and applications unique to Istanbul Modern, pioneering in Turkey with the first museum application compatible with Beacon.
We have included another support to the culture and arts by becoming the Communications and Technology sponsor of the Sakıp Sabancı Museum in 2014. With our “My Ticket on Mobile” service, we make purchasing tickets easier and provide visitors convenience at museum entrances. For the first time in Turkey, we have designed education programs for families with children of 0-36 months to participate at the museum.
We will continue to support art and culture by integrating our technology into museums in order to improve peoples’ lives.
Women Empowerment In The Economy
“Women Empowerment in the Economy Project” was initiated in collaboration with the Turkish Foundation for Waste Reduction (TISVA) to enable women to better contribute to the economy by reducing the gap between equality of payments and opportunities. Having completed its third year of operation in 2015, we have provided microcredit support across 69 provinces to 70,000 women entrepreneurs, keen to become independent contributors to the economy.
Sustainability at Turkcell
As Turkcell, we continue to work to do our duties in the best way possible in environmental, social and corporate management, and to create a better future for all of us.
As a result of our successful operations in energy, in 2014 we were awarded the ISO50001 Energy Management System Standard certificate. By receiving the ISO 14064 – Accounting and Verification of Corporate Greenhouse Gas Emissions document to carry out all our responsibilities regarding greenhouse gas standards with our implementations protecting the environment and enabling efficiency and savings to be made in 2015, we became the first GSM company in Turkey to receive this certification. Our report filed to CDP Turkey for 2014 was presented an award by being one of the top 5 companies to receive the highest points in the Carbon Disclosure Project’s Climate Disclosure Leadership Index. Furthermore, we became one of the 29 companies chosen to be in the index in 2015 through meeting the criteria of the Borsa Istanbul’s Sustainability Index.
SECTION 5- BOARD OF DIRECTORS
5.1. Structure and Formation of the Board of Directors
According to the provisions of the second paragraph of article 17 of the Capital Markets Law No. 6362, Ahmet Akça, Atilla Koç and Mehmet Hilmi Güler have been appointed as the board members under the resolution no. 2013/8 of the CMB dated March 11, 2013 for holding this office until the election of independent board members in place of them duly or until the adoption of a new resolution related thereto by the CMB in order to ensure the fulfilment of the requirement with respect to the election of independent board members among the Corporate Governance Principles pursuant to the second paragraph of article 17 of the Capital Markets Law No. 6362;
Mehmet Bostan and Bekir Pakdemirli have been appointed as the board members under the resolution no. 2013/27 of the CMB dated August 15, 2013 pursuant to the provision of the sub-paragraph (k) of the first paragraph of the article 128 of the Capital Markets Law No. 6362 in place of the board members who have been elected in General Shareholders’ Meeting dated April 29, 2010 for a duty period of 3 years and whose duty periods have expired but their successors could not be elected by the shareholders to hold this office until election of new members by the Company’s General Shareholders’ Meeting in accordance with the legislation or appointment of other members by the CMB in addition to 3 independent board members appointed pursuant to the resolution no. 8/271 of CMB dated March 11, 2013 and; Erik Belfrage and Jan Erik Rudberg notified to the Capital Markets Board by Sonera Holding BV have been appointed as the board members under the resolution no. 2013/30 of the CMB dated September 13, 2013 for 2 board memberships remained vacant as a result of ex-officio appointments made to the board of directors under resolutions no. 8/271 and 28/921 of the Board dated March 11, 2013 and August 15, 2013 respectively in order to hold this office until the election of new members by the Company’s General Shareholders’ Meeting in accordance with the legislation or appointment of other members by the CMB.
Following the appointment of the board members made by the CMB, the Board of Directors of Turkcell currently consists of 7 (seven) members meeting the independency criteria in total and 3 (three) of them are independent members.
Ahmet Akça Chairman of the Board and Independent Board Member
Ahmet Akça has been appointed as the member of Turkcell’s Board of Directors under the resolution adopted by the CMB Bulletin no.2013/8 dated March 11, 2013 for holding this office until a new independent board member is elected in his place duly and takes the office or until adoption of a new resolution related thereto by the CMB and as the President of Turkcell’s Board of Directors on August 19, 2013. He also acts as the President of Turkcell’s Audit Committee and Candidate Nomination Committee. From 1980 to 1988, Mr. Akça served as a Foreign Trade Manager in the glass and food industry. In 1988 he became CEO of an International Trading Company, a position he held until 1992. He later started his own business, which he still runs. Mr. Akça is the founder and Chairman of the Board of Directors logistics company Akça Lojistik Hizmetleri ve Ticaret A.Ş. He was a member of the Committee of Trustees in January 2010, at the time of the Bezmialem Vakıf University establishment, and has been serving as the Chairman of the Committee of Trustees since November 2011. After studying mathematics at Middle East Technical University and sociology at Istanbul University for a certain period, Mr. Akça graduated from the Bursa Economics and Commercial Sciences Academy’s Department of Economics.
Independent Board Member
Atilla Koç has been appointed as the member of Turkcell’s Board of Directors under the resolution adopted by the CMB Bulletin dated March 11, 2013 for holding this office until a new independent board member is elected in his place duly and takes the office or until adoption of a new resolution related thereto by the CMB. He also acts as the President of Turkcell’s Compensation Committee. Having working as an Undersecretary at the Ministry of Interior and as the Chief of Police in Konya, he served as the District Governor of the Ulubey, Nusaybin and Bayındır districts, and as the Governor of Siirt and Giresun provinces. He has also been the Prime Minister’s Undersecretary, the General Secretary of Ankara Metropolitan Municipality, and the Central Governor. Then, Mr. Koç served as AKP Aydın deputy in 22nd and 23rd period of Grand National Assembly of Turkey and the Minister of Culture and Tourism in the 59th Government. He graduated from Ankara University’s Faculty of Political Science.
Mehmet Hilmi Güler Independent Member of Board of Directors
Mehmet Hilmi Güler has been appointed as the member of Turkcell’s Board of Directors under the resolution of the CMB dated March 11, 2013 for holding this office until a new independent board member is elected in his place duly and takes the office or until adoption of a new resolution related thereto by the CMB. He also acts as the President of Turkcell’s Early Detection of Risks Committee and Corporate Governance Committee. He formerly worked as a Project Engineer and Group Chairman at TUSAŞ Aerospace Industries. Mr. Güler also served as Vice President and Board Member of the Scientific and Technological Research Council of Turkey (TÜBİTAK), as Chairman and General Manager of the Machines and Chemical Industries Board (MKEK), as the General Manager and Chairman of Etibank, as the Chief Undersecretary to the Prime Minister, and as Board Member and Executive Director at ERDEMİR and İGDAŞ. Mr. Güler also served as Minister of Energy and Natural Resources in the 58th, 59th and 60th Governments. Mr. Güler graduated from Middle East Technical University’s Department of Metallurgical and Materials Engineering where he obtained his Master’s and Doctorate degrees.
Mehmet Bostan Member of Board of Directors
Mehmet Bostan has been appointed as the member of Turkcell’s Board of Directors under the resolution of the CMB dated August 15, 2013 in order to hold this office until election of new members by the Company’s General Shareholders’ Meeting in compliance with the legislation or appointment of other members by the CMB. He serves as the Chairman of the Board of Directors of Turkcell Global Bilgi since 2014 and Turkcell Global Ödeme Sistemleri since 2015. Mr. Bostan formerly worked as Senior Relationship Manager at BNP Ak Dresdner Bank A.Ş, Manager at TSKB, Chief Representative of Dresdner Bank AG Turkey and Chief Financial Officer at Güneş Sigorta. He has served as the General Manager and Board Member of Vakıf Emeklilik since 2010. He is a Board Member of the Pension Monitoring Center and Turkey Tennis Federation. Mr. Bostan graduated from International Relations, from the Faculty of Economics, at İstanbul University. He holds an MBA from Bilgi University.
Bekir Pakdemirli Member of Board of Directors
Bekir Pakdemirli has been appointed as the member of Turkcell’s Board of Directors under the resolution of the CMB dated August 15, 2013 in order to hold this office until election of new members by the Company’s General Shareholders’ Meeting in compliance with the legislation or appointment of other members by the CMB. Over the past 10 years, he has worked as Regional Manager for the Middle East of a multinational company, General Manager of a ceramic company in İzmir and General Manager of a publicly-listed food company. Currently, he is Business Development Manager of the company McCain and provides consultancy services on management, finance, efficiency and restructuring to corporations. Mr. Pakdemirli is a board member of Tarkem, historical Kemeraltı Inc, a Board Member of the Anatolia Foundation for Autism and a member of the Capital Market Investors Association. Mr. Pakdemirli presents a weekly economic program on Ege TV. He is an amateur captain, amateur pilot and amateur radio operator. After graduating from Bilkent University, Faculty of Business Administration, he completed his Master’s degree in Management at Başkent University. Currently, Mr. Pakdemirli is working towards his PhD degree in Economics at Celal Bayar University.
Jan Erik Rudberg Member of Board of Directors
Jan Erik Rudberg has been appointed as the member of Turkcell’s Board of Directors under the resolution of the CMB dated September 13, 2013 in order to hold this office until election of new members by the Company’s General Shareholders’ Meeting in compliance with the legislation or appointment of other members by the CMB. He is currently Chairman of the Board of Directors of Kcell JSC (Independent Director) and the Chairman of the Board of Directors of Hogia AB. Since 2010, Mr. Rudberg has also a member of the Board of Directors of OJSC MegaFon (Independent Director). Between 1994 and 2003 he held various executive positions at Telia AB, after having served as the Chief Executive Officer of Tele2 AB, Executive Vice President of Nordbanken AB, Chief Executive Officer of Enator AB, as well the Chief Executive Officer of Ericsson Information Systems Sweden AB and holding several managerial positions at IBM. Mr. Rudberg has a degree in Economics and Business Administration from the Gothenburg School of Economics.
Erik Belfrage Member of Board of Directors
Erik Belfrage has been appointed as the member of Turkcell’s Board of Directors under the resolution of the CMB dated September 13, 2013 in order to hold this office until election of new members by the Company’s General Shareholders’ Meeting in compliance with the legislation or appointment of other members by the CMB. In the 70´s and 80´s, Mr. Belfrage worked as a Swedish diplomat in Geneva, Washington, Bucharest, Beirut, and in Paris. Since 1987 he has served as Senior Vice President at SEB, and as an advisor to Dr. Peter Wallenberg, an advisor to the Chairman at the companies Investor AB Jacob Wallenberg and SEB Marcus Wallenberg. In 2012 Mr. Belfrage set up a consultancy, Consilio International AB, where he also is the Chairman. The firm advises large Nordic corporates. Currently, Mr. Belfrage is chairman of several boards. He holds an MBA from the Stockholm School of Economics.
Kaan Terzioğlu Chief Executive Officer
Kaan Terzioğlu was appointed Turkcell’s Chief Executive Officer on April 1, 2015. He began his professional life in 1990 as an Independent Auditor and CPA at Arthur Andersen Turkey. In 1992, Mr. Terzioğlu joined Arthur Andersen USA as the IT Strategies and Security Specialist, and in 1994, began working at Arthur Andersen Belgium as the Leader of Information Management and Digital Strategy Services. In 1998, he was appointed Vice President of Consultancy Services Turkey Operations. Between 1999 and 2012, he served as the Team Leader of E-Commerce Strategies for the EMEA region, Sales Director of Advanced Technologies for the EMEA region, Managing Director of Technology Marketing Organization for the EMEA region, and Vice President of Central and Eastern Europe at the Cisco Systems Brussels branch, respectively. Between April 3, 2012 and April 1, 2015, Mr. Terzioğlu was a Member of the Board of Directors at Akbank, Aksigorta A.Ş., Teknosa İç ve Dış Ticaret A.Ş. and Carrefoursa A.Ş. Kaan Terzioğlu graduated from the Department of Business Administration at Boğaziçi University.
|BOD MEMBER NAME, SURNAME||DUTY||DUTIES WITHIN
|DUTIES OUTSIDE THE GROUP:
|DUTIES OUTSIDE THE GROUP: TITLE||TERM OF OFFICE / REMAINING TERM OF OFFICE|
|Ahmet Akça||Chairman of the Board||Chairman of the Board of lifecell LLC||(1) Akça Lojistik Hizmetleri ve Ticaret A.Ş.
(2) Bezmiâlem Foundation University
|(1) Chairman of the Board of Directors
(2) Chairman of the Board of Trustees
|Mehmet Hilmi Güler||Board Member||Chairman of the Board of Superonline İletişim Hizm. A.Ş.||(1) Mir Teknoloji Holding A.Ş.
(2) ICBC Turkey Bank A.Ş.
|(1) Board Member
(2) Board Member
|Atilla Koç||Board Member||Chairman of the Board of KKTCELL||-||-||Until replacement|
|Mehmet Bostan*||Board Member||- Chairman of the Board at Global Bilgi Pazarlama Danışma ve Çağrı Hizm. A.Ş.
- Chairman of the Board at TÖHAŞ
|(1) Vakıf Emeklilik
(2) Pension Monitoring Center
(3) Turkey Tennis Federation
|(1) Board Member
(2) Board Member & Genereal Manager
(3) Board Member
|Bekir Pakdemirli**||Board Member||- Fintur Holdings B.V. Board Member
- KKTCELL Board Member
- TÖHAŞ Board Member
|(1) Adres Danışmanlık Ltd. Şti.
(2) McCain Foods Limited
(3) Tarkem Tarihi Kemeraltı A.Ş.
(4) Anadolu Otizm Vakfı
(5) Sermaye Piyasası Yatırımcıları Derneği
|(1) Chief Advisor
(2) Business Development Manager
(3) Board Member
(4) Member of Board of Trustees
(5) Member of the Society
|Jan Erik Rudberg||Board Member||Chairman of the Board at CJSC “Belarusian Telecomunication Network”||(1) Hogia AB
(2) Kcell JSC
(3) PJSC Megafon
|(1) Chairman of Board of Directors (Independent)
(2) Chairman of Board of Directors (Independent)
(3) Board Member (Independent)
|Erik Jean Christian Antoine Belfrage||Board Member||lifecell LLC Board Member||(1) KIBI AB
(2) Eramet Steel
(3) Philippines (Stokholm)
(4) The International Council of Swedish Industry
(5) International Chamber of Commerce-Committee on Corporate Responsibility and Anti-Corruption
(6) International Chamber of Commerce-Finance Committee
(7) The Trilateral Commission
(8) Sigtunaskolan Humanistiska Laroverket (Sigtuna School)
(9) SEB Marcus Wallenberg
(10) Investor AB Jacob Wallenberg
|(1) Board Member
(2) Board Member
(3) Honorary General Consul
(4) Chairman of Board of Directors
(6) Vice Chairman
(7) Board Member
(9) Advisor to Chairman
(10) Advisor to Chairman
* Mehmet Bostan has been appointed as the President of Republic of Turkey Prime Ministry Privatisation
Administration with the decision published on the Official Gazette dated February 26, 2016.
** Bekir Pakdemirli has been appointed as Board Member at TÖHAŞ with the resolution registered with the trade registry on February 25, 2016.
In the past years, the Board of Directors has had female members, thus a policy for having female members in the Board of Directors has not yet been established.
At the Ordinary General Shareholders’ Meeting held on March 26, 2015, members of the Board of Directors were granted permission regarding their activities within the prohibition of competition with operations conducted by himself/herself or on behalf of another individual as per Articles 395 and 396 of the Turkish Code of Commerce.
5.2. Principles of Activity of the Board of Directors
The agenda of the meetings of the Board of Directors is prepared by the Chairman of the Board of Directors, who takes into account requests made by members of the Board of Directors and executives.
The Board of Directors met a total of 13 times during 2015 via physical participation and teleconference. The overall rate of attendance at these meetings was 92%. The resolutions in the meetings were adopted with unanimity at a rate of 99%.
In order to assure proper attendance, Turkcell set the schedule of the Board meetings to be held in the following year at the end of the current year and notified these to the members. Thus, the members are offered the opportunity to schedule their activities according to their meetings, and the date of the next board meeting is also determined taking the requests of the members into account at each board meeting. In urgent matters, additional meetings can always be convened without waiting for the next meeting date. Invitations to the meetings are sent via e-mail. In line with the Corporate Governance Principles, the Secretariat which has been set up within the structure of the Board of Directors informs the Board members by notifying the agenda of the meeting and the documents related to the agenda, writes and archives the discussions conducted by the Board members during the meetings on a report, and records the reasons of the counter votes regarding matters for which a different opinion has been expressed.
As per articles of association:
Board meetings are possible with there being a quorum of at least five members at the meeting. At board meetings, ordinary resolutions are made with four affirmative votes at meetings with five members and with five affirmative votes at meetings with more than five members.
Neither the Chairman of the Board of Directors nor the Board members hold any preferential voting rights or the right to veto the resolutions made by the Board of Directors. All Board members, including the Chairman, have equal voting power.
Any damage to the Company which may be caused by the failures of the Board members during the performance of their duties has been insured and the insurance limit in the September 2014 – September 2015 period was accepted as USD 400 million and USD 850,500 insurance premium was paid.
5.3. Number, Structure and Independence of the Committees Established Under the Board of Directors
Throughout the financial year of 2015, the Audit Committee, Corporate Governance Committee, Compensation Committee and Early Detection of Risks Committee carried out their operations. The following decisions were made during the meeting of our Company’s Board of Directors dated August 19, 2013 regarding the distribution of work:
- the Audit Committee being constituted of Ahmet Akça, Mehmet Hilmi Güler and Atilla Koç of our independent Board members as well as appointing Ahmet Akça as the chairman of the Committee;
- the Early Detection of Risks Committee being constituted of Mehmet Hilmi Güler, Mehmet Bostan and Bekir Pakdemirli as well as appointing Mehmet Hilmi Güler as the chairman of the Committee;
- the Corporate Governance Committee1 being constituted of Mehmet Hilmi Güler, Mehmet Bostan and Bekir Pakdemirli as well as appointing Mehmet Hilmi Güler as the chairman of the Committee;
- the Compensation Committee being constituted of Atilla Koç, Mehmet Hilmi Güler and Mehmet Bostan; as well as appointing Atilla Koç as the chairman of the Committee;
- the Candidate Nomination Committee being constituted of Ahmet Akça, Mehmet Hilmi Güler, Atilla Koç, Mehmet Bostan and Bekir Pakdemirli as well as appointing Ahmet Akça as the chairman of the Committee.
Each board member is commissioned in more than one committee due to the structuring of the Board of Directors.
The activities and working principles of the committees are generally disclosed to the public on the Company’s website.
None of the other Board Members commissioned in committees are executive members. The meetings of the committees meetings are held at necessary intervals or by taking the request of any member into consideration and conducting meetings in parallel with dates of Board meetings has been agreed upon.
Information regarding the committees formed under the Board of Directors is available on the Company’s corporate website (www. turkcell.com.tr) in the Investors Relations section under the Corporate Governance heading.
1 Investor Relations and Business Development Executive Nihat Narin joined the Corporate Governance Committee as of February 19, 2015.
5.4. Risk Management and Internal Control Mechanisms
During our Company’s Ordinary General Shareholders’ Meeting held on March 26, 2015, DRT Bağımsız Denetim Serbest Muhasebeci Mali Müşavirlik A.Ş. was appointed as the Company auditor for auditing our Company’s financial statements of 2015 as per the Turkish Code of Commerce.2
Moreover, the Internal Audit Unit operates with the Board of Directors and is responsible for the auditing of Turkcell İletişim A.Ş. and all of the Group Companies which are subsidiaries, and reports the results of the audit carried out within generally accepted international auditing standards to the Audit Committee and CEO. The auditing activities of the Internal Audit function mainly comprise of operational audits conducted pursuant to annual audit plans and audits in accordance with Article 404 of the Sarbanes-Oxley Act.
Operational audit activities are carried out according to annual audit plans prepared with respect to a risk based audit approach. The objective of these audits is to provide assurance with regard to the sufficiency and efficiency of business processes and suitability thereof with regulations so as to enable Company activities to be carried out in accordance with internal and external regulations and strategic objectives.
On the other hand, as we are listed on the New York Stock Exchange in the United States, audits are conducted within the framework of the annual plan to provide assurance in terms of the existence and sufficiency of an internal control structure across Turkcell and Turkcell Group Companies, which are consolidated, and whether this structure operates effectively, in compliance with the provisions of Article 404 of the Sarbanes-Oxley Act, which all publicly traded companies are required to comply with. All stages from the planning stage to the specified internal control insufficiencies and following and concluding actions of the audit activities carried out in accordance with said Article are reported to the Audit Committee, CEO and Chief Finance Officer at regular intervals.
The Internal Audit Unit also prepares research reports by providing consultancy in current matters and matters requested by the management.
The Internal Audit Unit reports the compliance practices as per Sarbanes Oxley Rule Act Section 404 to the Audit Committe and the CEO while Corporate Risk Management Unit reports to the Early Detection of Risks Committee and the CEO. The Internal Audit mechanism operates with a risk based audit perception. Within this scope, functionally and institutionally probable risks are continuously reviewed and the possible effects of these risks and risk appetite according to our managing capacity are determined. The risk analyses resulting from these conducted operations constitute the main input of audit activities.
Furthermore, there is an Enterprise Risk Management (ERM) process which comprises identifying the risks that may affect Turkcell’s performance in achieving its targets, to coordinating risk analysis activities, planning necessary actions, sharing, reporting and following the outcomes with the Company management. The Enterprise Risk Management Unit is responsible for coordinating the ERM process under the supervision of the Group Internal Audit Directorate. The Turkcell Enterprise Risk Management Unit aims at developing an approach, where the risk management process is conducted in an integrated manner with the fundamental management processes. While enabling this, a framework associated with the process was identified in accordance with an Enterprise Risk Management procedure as per the COSO framework and ISO 31000 standard. During the risk identification and evaluation period, different methods such as Delphi research, workshops, brainstorming sessions, reports from risk contacts, thorough interviews, research reports, etc. are used. Thus, the objective was to extensively identify, evaluate and effectively manage risks causing uncertainties.
As of the end of the financial year of 2012, the “Early Detection of Risks Committee” has been in operation in order to perform activities in a manner affiliated with the Board of Directors within the scope of Article 378 of the Turkish Commercial Code and the Communiqué on Corporate Governance of the Capital Markets Board. The Early Detection of Risks Committee supports the Board of Directors by performing studies for the purpose of early diagnosis of the risks which may jeopardize the existence, development and continuity of the Company, implementing the necessary measures related with the identified risks and managing the risks. The Committee reports to the Board of Directors once every 2 months and the reports are sent to an independent audit Company. The Board of Directors regularly provides an evaluation regarding the risks affecting the Company through the Early Detection of Risks Committee.
The Corporate Risk Management Unit is responsible for coordinating the risk assessment and risk avoidance activities at departments as well as reporting the results to the Early Detection of Risks Committee within the scope of Corporate Risk Management methodology. During this process, the ownership of the risks and the responsibility of risk avoidance activities belong to the business and not transferred to the responsibility of the Corporate Risk Management Unit.
In 2000, Turkcell formulated its business continuity plans in a manner also encompassing its technical operations and repositioned its business continuity plan as Business Continuity Management by broadening the extent thereof in 2004.
With the restructuring in 2011, the scope of the program expanded so as to comprise Turkcell Group companies and suppliers. Turkcell Group Business Continuity Management System has been structured and certified in a manner ensuring the continuity of our call, messaging, Internet and societal security services as per the “ISO 22301, Societal security - Business continuity management systems” standard. Regular drills are conducted for our business continuity plans formed by considering the customers’ expectations, corporate policies and legal obligations in order to guarantee their operation in emergency cases.
Thanks to our geographically dispersed technical infrastructure, extensive coverage, solution partner network, mobile exchanges, additional capacity, emergency centres and extensive experience in handling emergencies enable us to minimize the impact of risks as much as possible and additionally, the experience of our Group companies in customer services, our high speed fibre-optic infrastructure, data storage services and our experienced software development teams allow us to effectively manage any disasters from another centre, thereby ensuring the continuity of our activities.
2 Our Company’s Board of Directors decided to appoint Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş (PricewaterhouseCoopers) as the independent audit firm to audit our Company’s accounts and operations for the year 2016. This decision shall be submitted to the approval of our shareholders during the first Annual General Assembly Meeting of our Company.
5.5. Strategic Goals of the Company
As Turkcell Group, we aim to become the leader in integrated telecommunication market in Turkey, to rise to the leading position in every country we operate in through being one of the top 2 in each, and to provide globally relevant products with over 100 million users with our ‘Converged Communications and Technology Services Company with Globally Relevant Services’ vision. To reach this objective, we have determined our values as operating freely, genuinely and confidently together with our employees, group companies, ecosystem and customers. We adopt a culture, where we value and work together to create value, and are focused on a unique customer experience; and also make a difference with our technology leadership and focus on solutions. Our strategy throughout this path is to provide integrated telecommunication and technology services; and to hold a strong position in Turkey and to take actions which will enable us to grow internationally and creating value.
5.6. Financial Rights
The shareholders were informed with a separate agenda topic at the Ordinary General Shareholders’ Meeting held on March 26, 2015 within the framework of the Wages Policy approved with the decision of the Company’s Board of Directors and made public on the Company’s website. During the 2012 financial year, a Compensation Committee which is responsible for determining the remuneration principles that apply to the Board members and senior management taking into account the long-term strategic goals of the Company, for setting out the remuneration criteria for the Board members and senior management’s performance and makes compensation recommendations to the Board had been established.
All rights, benefits and remuneration provided to board members and senior management on a cumulative basis and the criteria along with remuneration principles used in the determination of these are being shared with the public through the Company’s wages policy and annual reports.
The total benefit paid and provided to the key management personnel amounts to TRY 66 million 876 thousand for the financial year which ended on December 31, 2015.
In addition to their salaries, the Company provides fringe benefits to the directors and the executive officers as well as contributes to their pension plans. The Company is obliged to contribute to such pension plans at a certain percentage of the employee’s salary.
With the scope of the resolution adopted at General Shareholders’ Meeting dated April 29, 2010 for the payment of net EUR 250,000 per year to the Chairman of the Board of Directors and net EUR 100,000 per year to each member of the Board of Directors during the period of their service, said payments are continued.
No loans, credits or assurances such as the surety for benefit are granted to Board Members and senior executives of the Company.