The second “Independent Woman Directors Conference of Turkey” was held at Sabancı Center on Wednesday, November 19th as part of the Independent Woman Directors project implemented by the Sabancı University Corporate Governance Forum with the financial support of the Consulate of Sweden and the strategic support of Egon Zehnder International’s Turkey office.
Introductory remarks were made by Ali Babacan, Deputy Prime Minister Responsible for General Economic Coordination, via videoconference.
Also speaking were President of the Corporate Investors Society of Turkey, Mehmet Göçmen; UN Women Europe and Middle East Regional Director and Turkish Representative, Ingibjorg Gisladottir; and Royal Bank of Scotland CEO and 2011 European Diversity Champion, Chris Sullivan.
“Boards Empowered by Women” Awards of Turkey were given to Türk Tuborg, Turcas Petrol, Martı Otel İşletmeleri A.Ş, Burçelik Bursa Çelik Döküm Sanayi and Burçelik Vana Sanayii. Furthermore, Alcatel Lucent Teletaş Komünikasyon received a Special Award for achieving gender equality in all “Boards Empowered by Women” Index criteria. The awards ceremony was attended by Vice President of the Capital Markets Board, Ayşegül Ekşit.
The meeting was opened by Mehmet Göçmen, President of the Corporate Investors Society of Turkey. In his introductory remarks delivered via videoconference, Ali Babacan, Deputy Prime Minister Responsible for General Economic Coordination, said, “We cannot become a developed country before our women take the places they deserve in economic and social life. Although we are inspired by the success stories of Turkish women in all areas from the arts to sports, business and science, we need more progress. We can only achieve this progress through the holistic and coordinated efforts of public institutions and civil society initiatives.” Babacan noted that regulatory changes were intended to enable the Turkish economy and businesses to benefit from the quality of decisions brought by gender diversity, and expressed his hope that the Woman Directors Conference becomes a tradition.
Keynote speakers were UN Women Europe and Middle East Regional Director and Turkish Representative, Ingibjorg Gisladottir; and Royal Bank of Scotland CEO and 2011 European Diversity Champion, Chris Sullivan.
Sabancı University Corporate Governance Forum Director Melsa Ararat presented the “2014 Report on Woman Directors in Publicly-Traded Companies in Turkey” followed with a lecture by Egon Zehnder Global Diversity Council Cochair Edwin Smelt on “Women on Boards: A Global Perspective.
Capital Markets Board (CMB) Vice President Ayşegül Ekşit attended the event to present awards.
“We believe one of the ways to protect against bad management is boards empowered by women.”
Mehmet Göçmen, President of the Corporate Investors Society of Turkey, said that he viewed democratic participation in management as one of the fundamental requirements of corporate governance and that the Independent Woman Directors project by the Sabancı University Corporate Governance Forum will have a critical function in increasing the number of woman directors in company boards. Mehmet Göçmen commented, “We know how bad management results in waste of resources and costs time and energy for companies, institutions and communities. Based on both our own experiences and the wisdom we acquire from the world, we believe that one of the ways to protect against bad management is boards empowered by women.”
“As seen in Fortune 500 companies, the presence of women in top management has a positive effect on profitability.”
Ingibjorg Gisladottir, UN Women Europe and Middle East Regional Director and Turkish Representative, said, “We need more women in middle-management and decision-maker positions in business. Boards are one place where women must be present to ensure that corporate agendas are open to change instigated by differing perspectives. Women’s presence in boards of directors will support gender equality in business and influence corporate culture in this way. As seen in Fortune 500 companies, the presence of women in top management has a positive effect on profitability as well.”
Royal Bank of Scotland CEO and 2011 European Diversity Champion Chris Sullivan gave a speech titled “Creating a More Gender-Balanced Environment.” Chris Sullivan discussed gender balance as seen in developed economies today and gave examples of the sustainable strategies implemented in RBS to expand the female talent pool.
“This is also a human rights matter”
The message of Consul-General of Sweden, Jens Odlander, was delivered by Sevil Özmen. In his message, Jens Odlander said that gender equality had been one of the key values of Sweden for many years. Odlander continued, “Companies founded and run by women have greater competitive advantage in supplying services and products suitable for women. More importantly, gender equality in boards empower women and create positive role models for young businesswomen. As the Consul-General of Sweden in Istanbul, we support projects like Independent Women Directors which serve this purpose. It takes time for norms and culture to change. However, the Independent Woman Directors Project has succeeded in gaining a place in the agendas of boards of directors, regulators, and board-ready women.”
Sabancı University Corporate Governance Forum and Independent Woman Directors Project Director Melsa Ararat presented the Sabancı University “Independent Woman Directors Turkey 2014” report. The foreword of the report was written by Ali Babacan, Deputy Prime Minister Responsible for General Economic Coordination.
The report studied the boards of 422 companies listed on the Istanbul Stock Exchange, and determined that, despite the 2012 Capital Markets Board Governance Principles advisory to include women in boards, the number of woman directors remained at the 2013 figures for 2014. The number of woman directors remained at 352, and accounted for 11.7% of the total number of directors. This suggests that the voluntary gender regulations and the “comply or explain” approach fails to work in Turkey.
Although the number of woman directors did not increase, the ratio of women among independent directors increased in 2014, with 24% of newly-appointed independent directors in 2014 being women. This brought the ratio of independent woman directors among all woman directors from 8.8% to 9.3%. This is partly attributable to the effects of the Independent Woman Directors project.
The report notes that 44.1% of BIST companies have no women on their boards. In other words, 186 of Turkey’s leading companies have no women in management.
In line with the increase of independent woman directors, the ratio of women serving in Board of Directors committees also increased from 8.5% in 2013 to 8.5% in 2014. The ratio of women in Audit Committees is 9.5% and woman directors comprise 8.9% of total Corporate Governance Committee membership. Credit committees, required to be established by banks in Turkey, include 6 women accounting for 9.2% of membership. When interpreting these figures, Project Director Melsa Ararat said that half of these women were members of the families controlling the respective companies, and only independent members can serve on Audit Committees, showing the confidence in women especially in the matter of auditing.
Turkey’s companies with Boards Empowered by Women
The second “Boards Empowered by Women” Awards of Turkey were given to Türk Tuborg, Turcas Petrol, Martı Otel İşletmeleri A.Ş, Burçelik Bursa Çelik Döküm Sanayi and Burçelik Vana Sanayii. Furthermore, Alcatel Lucent Teletaş Komünikasyon received a Special Award for achieving gender equality in all “Boards Empowered by Women” Index criteria. The awards ceremony was attended by Vice President of the Capital Markets Board, Ayşegül Ekşit, who said, “Academic studies show that the presence of women in top management have a positive effect on profitability, help to improve the effectiveness of board of directors meetings, and contribute to risk management. In order to reap the benefits of new legislation and voluntary efforts, the awareness of all parties must be increased and companies must sustain their efforts in this matter.
The awards were based on index calculations designed by Sabancı University faculty members Melsa Ararat, Işın Güler and Özgecan Koçak. The index considers “Representation of Women on Boards,” “Representation of Independent Woman Directors on Boards,” “Representation of Women on Committees,” “Presence of Female Board of Directors Chairs and CEOs” and the presence of at least three female members. The index will be calculated every year.
The “Independent Woman Directors Project” implemented by the Sabancı University Corporate Governance Forum with financial support by the Consulate of Sweden and strategic support of Egon Zehnder International’s Turkey office aims to improve the position of women on boards of directors with a view towards making boards more efficient. As a founding partner of the “Global Board Ready Women” initiative, the project makes regular updates to a database of board-ready women in Turkey, and recommends candidates to companies that wish to appoint a woman to their boards of directors.