Do Corporate Governance, Independent Boards & Auditors Affect Market and Financial Performance: An Application to Istanbul Stock Exchange

Abstract:     
This paper aims to study in detail the principles and the practices of corporate governance at the Istanbul Stock Exchange (ISE) and in the Turkish capital markets, in reference to the OECD corporate governance principles. The fundamental concepts that relate to the principles of corporate governance are examined on the basis of the OECD corporate governance principles and standards. The paper covers a questionnaire based on the practices of corporate governance principles by the respondents, namely the ISE member firms and companies listed on the ISE, and a statistical evaluation of the findings. Based on the findings, the relationship between corporate governance and profitability and financial structure of companies that implement the principles of corporate governance is examined on the basis of the manufacturing sector companies. The relationship between corporate governance and the financial performance of these firms is also analyzed. Moreover the contribution of independent directors and auditors to the financial performance are analyzed. The level of participation at the general assembly meetings, dividend distribution policies and share owning structure of board members are also evaluated within the scope of the questionnaire.

Working Paper Series