Corporate Governance rating obtained
DYH is the first publicly-traded company ever to make its Articles of Association compatible with the Capital Market Board’s Corporate Governance Principles.
DYH management is making intense efforts to achieve full compliance with corporate governance principles. DYH was the first publicly-traded company to make its Articles of Association compatible with the corporate governance principles issued by the Capital Markets Board (CMB) in July 2003. With this important development, three independent members were appointed to the Board of Directors, increasing total membership from seven to nine. Additionally, an Audit Committee and a Corporate Governance Committee were formed to assist the Board of Directors. In 2005, these Committees were joined by the new Investment and Human Resources Committees.
Following an amendment to the Articles of Association, the Executive Board was renamed the Executive Committee. Committees of the Board of Directors meet regularly and submit reports to the Board of Directors. The group’s website at www.dyh.com.tr is in full compliance with the CMB’s Corporate Governance Principles, demonstrating the group’s commitment to transparency and good investor relations.
The first media company in the world to announce its corporate governance rating…
DYH’s corporate governance rating project, which kicked off in November 2005, came to a successful conclusion in April 2006. The world’s most widely-known corporate governance rating organization Institutional Shareholder Services (ISS) performed the rating survey; consequently, DYH was issued a good corporate governance rating of 8.5 out of 10. In the subcategory public disclosure and transparency, ISS issued a rating of 8.6. DYH thus became the first media company in the world to announce its local corporate governance rating by an internationally-renowned rating organization. Furthermore, DYH became the first publicly-traded company ever to be rated by ISS in Turkey. DYH also became the first non-financial publicly-traded company to receive a corporate governance rating in Turkey.
The corporate governance practices of DYH are summarized below under four headings: shareholders, disclosures, stakeholders and the Board of Directors.
Shareholders
The Board of Directors is committed to establishing good relationships with existing shareholders and potential investors. To this end, DYH employs people who possess the highest qualifications. General meetings are conducted in accordance with applicable rules and regulations. No complaints, verbal or written, have been received by DYH management in 2005 from minority shareholders with respect to the exercise of minority rights.
DYH’s shareholder relations specialists strive to respond quickly to the requests of individual and institutional investors. DYH is the most distinctive public company in Turkey in terms of the number of research reports prepared by investment banks.
DYH management makes intense efforts to get the most out of its general meetings. Efforts made before, during and after the ordinary general meeting of shareholders that discussed 2006 activities have set industry standards. The group’s investors were given comprehensive information and all requests were responded to promptly.
In keeping with the CMB’s corporate governance principles, DYH was the first holding company to announce the dividend policy of its publicly-held subsidiaries. Starting in the 2003 fiscal year, DYH has decided to distribute 50% of the net distributable profit of its subsidiaries.
Disclosures
Four main channels are used for public disclosure: Financial statements and their footnotes, material disclosures, press announcements and websites. Additionally, regular meetings are held to provide information to institutional investors. The group’s financial statements and footnotes for 2006 were announced to the public in a timely manner. No problems were experienced in connection with material disclosures. The DYH website was restructured and improved in accordance with the CMB’s corporate governance principles.
Stakeholders
The DYH management team is encouraged to join NGOs formed by the group’s customers and suppliers. The team actively cooperates with members of the advertising profession in order to learn about their needs and provide sustainable growth and financial strength to the industry. Board members are active participants in social and public projects conducted by such organizations as TÜSİAD (Association of Turkish Industrialists and Businessmen) Ethics Council, the International Advertisers’ Association and the Corporate Governance Association, to name a few.
The human resources function is represented by a vice president. In 2006, DYH Human Resources focused on establishing a performance management system that would support the competitiveness of group companies. During the year, all positions were assigned weightings, the remuneration system was reviewed and work assessments were made.
Board of Directors
In 2005 DYH’s Board of Directors conducted its business regularly and as planned. Of the nine members on the Board, three are independent and two are non-executive members. Activities of the Board of Directors are undertaken in consultation with Board Committees. These committees meet regularly and submit reports to the Board of Directors.
Important points regarding the structure and activities of the Board of Directors, as defined in the DYH Articles of Association, are the following:
At least one third of the Board shall be comprised of independent members. Persons who have served on the Board for seven years may not be appointed as independent members. Only persons with the required qualifications may serve on the Board.
The authorities and responsibilities of the Board of Directors have also been defined in detail.
Procedures involving Board members and issues of conflict of interest require the approval of the general meeting. Additional arrangements have been made to ensure that Board meetings are held in a more organized manner.
The principles governing the remuneration of Board and committee members have been defined.
Basic rules for communicating Board member candidates to the general meeting of shareholders have been determined.
The Articles of Association of DYH prohibits the same person from being both Chairman of the Board and Chairman of the Executive Committee or CEO. While the CEO’s responsibility is to manage day-to-day operations and implement strategies, the Board of Directors oversees the business as a whole. Top management meets twice a month or more frequently, as needed, to monitor progress in projects. Monthly deviations from targets, as well as evaluations of financial performance are prepared and reported to the Board of Directors on a monthly basis.
The DYH Audit Committee assists the Board of Directors by supervising the financial reporting, accounting and internal and external auditing procedures of group companies. The committee reviews the group’s systems and progress and makes recommendations to the Board of Directors concerning the following:
Financial reporting and public disclosure.
Financial and operational risk, risk arising from activities.
Internal control.
Internal and independent external auditing.
Compliance with laws and regulations.
The primary responsibility of the DYH Corporate Governance Committee is to assist the Board of Directors in implementing corporate governance principles at the highest level for the benefit of DYH and its publicly-traded subsidiaries. Primary duties of the DYH Corporate Governance Committee are the following:
To oversee the implementation of corporate governance principles at DYH.
To develop strategies for improving the performance of the Board of Directors and senior management.
To support and assist the work of the Board of Directors by participating in initiatives related to investor relations, transparency and public disclosures.
The committee reviews, evaluates and makes suggestions concerning the systems and processes designed by DYH with a view to introducing management practices that will improve performance. |
