52 NEWSLETTER 2021 datory that certain members are among them. Another issue regarding the board of directors is the privilege to nominate candidates for the board of directors. The shareholders’ agreements usually include provisions to protect the managerial rights of various family members, such as which groups of shareholders are entitled to nominate candidates and how many, the required qualifications for the members, and the fact that the board of directors cannot validly convene unless at least one of the members nominated by a certain group is present. Another pillar of corporate governance is the representation of the company. Issues such as the representation of the company by those including certain members of the board of directors, the necessity of a board resolution taken in advance for the representation of the company on certain issues, how the limited representation powers and the form of signature matrix will be set, and the establishment of committees to report to the board of directors in certain areas, are dealt with under the heading of representation. Last but not least, it is also necessary to discuss the auditing of the company. Although the company is not subject to an independent audit in accordance with the TCC, the shareholders may prefer to have the company to be audited by an internationally reputable independent auditing firm each year. Financial Matters In particular, shareholders may wish to regulate a minimum distribution policy in the shareholders’ agreement, rather than leaving the issue as to how the company’s profits will be distributed, and whether or not any financial rights will be granted to the members of the board of directors, and to what extent, completely to the discretion of the general assembly, which is entitled to adopt different resolutions each year. In connection with this issue, share groups may be also granted privileges in dividends. Another issue regulated in this context is the company’s financing policy. If the company is in need of financing, a policy can be determined as to whether such need will be met from shareholders – through capital increase or shareholder loan - or from third parties, such as banks, and the board of directors of the company can be directed to act within the framework of this policy.
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