2012 Annual Report
CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
1. Statement of Compliance with Corporate Governance Principles
Our bank is determined to be coherent with Corporate Governance Principles (series IV, no: 56) completely which was published in the official gazette (no: 28158) on 30.11.2011.
Almost all principles stated in the mentioned series are applied without any conflict of interest. As stated in the article 8 of the afore mentioned communique, Corporate Governance Principles came in effect for banks whose shares are publicly traded on Istanbul Stock Exchange a year after its publication so compliance with mandatory principles by the bank is underway as of this date.
PART I – SHAREHOLDERS
2. Shareholder Relations Department
A Shareholder Relations Department referred to as the Shareholders Unit in the organizational chart) has been established in an effort to inform registered shareholders about dividends, capital increases and the agenda and resolutions of General Meetings, to maintain the share register in accordance with Article 326/1 of the Turkish Commercial Code and to manage legal and operational relations with shareholders. The contact details of this unit are as follows:
Jale Akman Aydoğdu
Phone: +90 216 635 34 69
Fax: +90 216 636 36 36
E –mail : jale.akman@teb.com.tr
Hülya Şentürk
Phone: +90 216 635 34 70
Fax: +90 216 636 36 36
E –mail : hulya.senturk@teb.com.tr
This unit reports to the General Secretary of the Board of Directors
Additionally, the Bank has an “Investor Relations and Corporate Governance Department” to establish relations with domestic and foreign investors and inform them about the Bank’s activities and financial results.
Çiğdem Çelikbilek and Özgün Zaimoğlu are responsible for the overall management of the department.
Their contact information is as follows:
Çiğdem Çelikbilek (Senior Manager)
Phone: +90 216 635 24 63
Fax: +90 216 636 36 36
E-mail: cigdem.celikbilek@teb.com.tr
Özgün Zaimoğlu (Assistant Manager)
Phone: +90 216 635 24 60
Fax: +90 216 636 36 36
E-mail: ozgun.zaimoglu@teb.com.tr
In addition to meetings, nearly 50 queries about TEB have been answered by telephone and e-mail in 2012. The questions were about various subjects and all requests for information by shareholders were answered as quickly as possible, provided that they are not related to trade secrets or information that is not publicly available.
3. Exercise of Shareholders’ Right to Information
Except the special enquiries from the shareholders , all information that should be provided within the scope of shareholders’ rights is available on Corporate Governance and Investor Relations sections on TEB’s web site and the information is updated regularly.
Although Article 36 of the Articles of Association of TEB provides for the appointment of a special auditor, no special auditor was elected in 2012. This article does not define the request for the appointment of a special auditor as an individual right. However, the Articles of Association does not contain any provisions that contradict with the relevant provision of the Turkish Commercial Code. This right was not exercised in 2012.
4. Information on General Meetings of Shareholders
The General Meeting of Shareholders convened to an Ordinary General Meeting on 26 March 2012 and attendance was 96.81.%, no media members were present at this event.
Invitation letters were sent by registered mail at least 15 days prior to the respective meeting dates to the Shareholders in the share register. The meetings were also announced in the Turkish Trade Registry Gazette and a national daily newspaper. In addition, e-mail messages were sent to the shareholders whose e-mail addresses were known.
In accordance with the provisions of the 2499 Capital Markets Act temporary article and 294 of Central Register Agency communication published on 30 January 2008, completion of dematerialization of shares is mandatory in order to vote in General Assembly. Unless the dematerialization is completed, attendance of our shareholders to General Assembly is not possible.
The shareholders who will attend the Ordinary General Assembly meeting individually or via proxy shall submit the below listed documents, before the meeting date, to the Shareholders Unit of the Bank’s Head Office or to Branches, and obtain the Entrance Cards or shall apply before the establishment of Presidential Board of the General Assembly, at the latest.
The date, venue, time and agenda of the meeting, as well as sample statements for those who wish to appoint a proxy to attend the meeting on their behalf, are included in the invitation letters, the newspaper announcements and on TEB’s website.
Shareholders exercised their right to ask questions at general meetings and their questions were answered informatively.
Shareholders tabled motions, which were put to the vote of attending shareholders and accepted.
According to the Articles of Association, approval of the General Meeting of Shareholders is not required for decisions concerning spin-offs or the sale, purchase and leasing of material assets. The powers and responsibilities of the Board of Directors in relation to these decisions have been specified in Article 26 of the Articles of Association.
To facilitate attendance at General Meetings of Shareholders, notices are sent out on time, the meetings are held in central locations in Istanbul and the minutes of the meetings are made available at the Shareholders Unit and on the website.
In addition, all shareholders were informed about total amount of donations and their beneficiaries during the General Assembly.
5. Voting Rights and Minority Rights
There are no privileges regarding voting rights. Further there are not any cross-shareholding companies. Minority shares are not represented in management; however the views, suggestions and requests of minority shareholders are communicated to the management through the Investor Relations and Corporate Governance Department and the Shareholders Unit.
6. Dividend Policy
There are no privileges regarding dividend distribution. TEB’s dividend policy, which was amended on 29 September 2006 and announced to the public, is as follows:
Dividend Policy:
“Türk Ekonomi Bankası A.Ş. will pay up to 40% of the net distributable profit to its shareholders as a cash dividend or as bonus shares within the context of its Articles of Association. The amount distributable depends on market conditions, maintenance of a comfortable capital adequacy ratio and growth plans of the bank and will be proposed by the Board of Directors to the Ordinary General Meeting of Shareholders every year.”
No dividend was distributed for the profit generated in the year 2011.
7. Transfer of Shares
Article 9 of the Articles of Association stipulates that:
Furthermore, the same article stipulates that the company’s Board of Directors may reject approval and registration without specifying any reason.
PART II - PUBLIC DISCLOSURE AND TRANSPARENCY
8. Disclosure Policy
Within the context of the Corporate Governance Principles that are binding for TEB, TEB’s Disclosure Policy is announced on its website both in English and Turkish, and updated regularly.
All information that fits the above definition is publicly disclosed by the Investor Relations and Corporate Governance Department or the Official Reporting Department and is subject to the approval of the Board of Directors and the General Management. Announcements made are also reported to the Corporate Governance Committee.
9. The Website and its Contents
All the information for our investors and customers is provided under Investor Relations and Corporate Governance sections both in English and Turkish ,
http://www.teb.com.tr/eng/main/HaritaInvestor_relations_menu.aspx
http://www.teb.com.tr/eng/main/HaritaCorporate_governance_menu.aspx
Information is available under the following headings:
• TEB- BNP Paribas
• Share Price Info
• Financial Calendar
• Ratings
• Financial Highlights
• Financials
• Investor Presentation
• Dividends
• Annual Reports
• Announcements
• Press Releases
• Frequently Asked Questions
• Contact Info
• UFRS Financials
• TEB Bond Issue
• Corporate Governance Principles
• Management
• General Meetings
• Committees
• Mission, Vision and Policies
10. Annual Reports
Annual Report include Corporate Governance Compliance Report, therefore Corporate Governance Principles are practiced in the report.
PART III – STAKEHOLDERS
11. Announcements to Stakeholders
Stakeholders are provided information concerning TEB’s activities through special circumstances disclosures, as published on the website and in annual reports. Views, opinions and questions submitted to TEB using the ‘Contact us’ section of the website are referred to the relevant departments and answered within the framework of applicable legislation.
12. Participation of Stakeholders in Management
As banking practice and legal rules impose strict restrictions on the appointment of executives, no model has been devised for stakeholders to personally take part in management. TEB believes that this applies equally to other banks in the industry. However, stakeholders can communicate their views, opinions, critiques and demands to the management through the “Investor Relations and Corporate Governance Department”, the “Shareholders Unit” and the “Customer Communications Unit”.
13. Human Resources Policy
The main objective of TEB’s Human Resources Group is to adopt the best HR practices in the finance industry.
Given this objective, the Bank’s human resource policy assures the following:
* Ensuring dynamism and readiness for change in the organizational structure, in line with the strategic plans and goals of the TEB Group.
* Within the scope of the TEB Talent Pool, recruiting people for the TEB Group who are well educated, open to innovation and change, have entrepreneurial skills, are energetic, dynamic, who possess potential for self-development, are team players and who can adopt corporate values and commit to them.
* Utilizing human resources in the most effective and productive manner in conformity with the Bank’s targets and strategies, supporting employees with development programs that are in line with both professional and personal career goals indicated in employees’ career plans and creating career opportunities by ensuring employees’ participation in advanced BNP Paribas training courses.
* Considering training and development as an investment in human resources and contributing to the development of employees in line with the TEB Group’s targets and strategies within the framework of the “continuous learning and development” philosophy of the TEB Formation Academy,
* Training future managers amongst employees within the organization and prioritizing applicants amongst employees within TEB for future open positions,
* Improving individual and team performance continuously through quality improving methods and systems, focusing on rewarding schemes in the Performance Assessment System that enables the recognition of superior performance and giving each employee equal opportunity within the context of their career plans,
Contributing to the productivity and performance of Bank’s employees and branches; by providing quick and effective HR support and practices.
By the end of 2012, TEB has 9287 personnel and 509 branches. % 61.3 of the TEB employees have university degree while 5.5% holds a graduate degree and 0.1 % holds a post graduate degree. Average training time per employee was realized as 62 hours.
14. Ethical Rules and Corporate Responsibility
As also stated on our website, The Board of Directors complies with the Code of Banking Ethics dated November 1, 2001 and numbered 1012 as prepared and published by the Banks Association of Turkey to which TEB contributes to the activities thereof.
In addition, TEB Group Ethical Principles are defined and delivered to all employees. Ethical principles are classified as “Use of Company Resources”, “Relations”, Responsibilities Toward the Company”, “General and Particular Rules” serving as a resource to adopt corporate culture and guide that all employees can consult.
Ethical Rules section is on Corporate Governance section on our web site.
Seeing corporate social responsibility as a style of conducting business, TEB acts in line with its mission to become a bank that considers its stakeholders’ priorities and basic values as its corporate priorities, while at the same time protecting the heritage of the community it serves.
While investing in future generations, TEB also supports those practices that contribute to the creation of a sustainable economy, environment and community.
While keeping a close watch on those of its business processes and operations which have an effect on the community, the environment and the economy, TEB also encourages its employees to contribute on a voluntary basis, to ensure they become a part of the solution in social issues.
SME Banking, SME Academy, SME TV
TEB considers SME’s as its primary stakeholders, as they are one of the building blocks of economic development. TEB SME Banking undertakes efforts to ensure that SME’s can enhance themselves in non-financial areas and to help them establish a more sustainable presence in the future. All of these efforts for SME’s have been undertaken through the SME Academy. The platform, which operates on the basis of the Bank’s Stakeholder Participation strategy, is a core principle of TEB’s corporate responsibility policy, and offers all current information that may be required by SMEs.
TEB SME Corporate Conferences on Social Responsibility
Responding to the problems that SME’s commonly face in Supplier Chain Management, Branding and Differentiating, TEB held sector-specific Corporate Social Responsibility Conferences in Bursa and Kahramanmaraş in 2012. In these conferences, which were supported by presentations given by Corporate Social Responsibility specialists and sector representatives, discussions centered on how the “corporate social responsibility” concept could solve the basic problems faced by SMEs and how to raise SMEs’ awareness of this issue.
TEB Supplier Conference
TEB organized a conference on Energy Efficiency in a bid to raise its suppliers’ awareness of corporate responsibility and to ensure the proper use of energy. Corporate responsibility specialists provided informative presentations concerning the sustainable and efficient use of energy to TEB as well as corporate suppliers having business relations with TEB.
TEB Family Academy
Launched in 2012 by TEB’s Retail Banking Unit, the TEB Family Academy offers an important platform for dialogue, where TEB comes together and establishes direct, one-to-one relations with its customers, who form the Bank’s key stakeholder group. TEB is aware that the most important ingredient in its expanding sphere of influence is its effort to enable people in developing countries access financial services and to raise their financial awareness. It is critical to ensure the proper management of the economies of families, which are the most fundamental unit of the community and which play a key role in raising Turkey’s standard of living. For this reason, TEB has adopted the mission of spreading financial literacy nationwide through its branches.
Within the framework of this platform, with its long term aim of raising social awareness of banking transactions and to instill an awareness of saving, seminars are held at TEB branches with the purpose of guiding families on budget management, and of the financial instruments they can use for their savings.
TEB Anatolian Scholarship Program
As a staunch defender of the principle, “Education is a right for everyone”, each year TEB extends scholarships to 4 students within the framework of Koç University’s Anatolian Scholarship Program. Through the program, which reaches students in need throughout Turkey, the highest caliber students can benefit from the privileges offered by Koç University, one of Turkey’s leading universities renowned for its contributions to science with Turkey’s brightest young people. Within the scope of this cooperation which began in the 2011-2012 academic year, all of the tuition fees for 4 students will be met by TEB over a period of 5 years.
Youth Train
Aiming to invest in the future and young people, TEB supported the “Youth Train Project”, which is implemented in cooperation between the Ministry of Youth and Sports and the Ministry of Transportation, Maritime Affairs and Communications. Offering young people the opportunity to learn more about Turkey, the project was conducted on 7 lines between June 29th and July 19th. Having carried nearly 2,000 young people aged between 19 and 29 around Turkey, the train offered the participants the opportunity to meet their peers in different regions, as well as offering them a chance to view Turkey’s historical and natural beauties.
TEB became a brand sponsor of BNP Paribas WTA Championships
TEB aims to turn tennis – one of the world’s five most popular sports and one which brings together nearly 100 million active players in 200 countries in 6 continents – into more than a game that is watched on television in Turkey. In line with this target, TEB became a brand sponsor of the BNP Paribas WTA Championships. TEB believes that by organizing the world’s most prestigious women’s tennis tournament in Turkey over a period of 3 years will contribute significantly to the promotion of Turkey and to the national economy.
Continuing to invest in sport
One of TEB’s most important targets is to set up new alternative sports fields for young people. In line with this target, TEB became the primary sponsor of the Turkish Tennis Federation. TEB also offered infrastructure support to Turkish tennis players under the age of 18, aiming to raise star tennis players from our country.
With its “Street Tennis” activity, TEB aims to bring tennis to the street, to instill a love of tennis among Turkish people and to encourage the raising of licensed tennis players. TEB will continue to invest in sport in the future.
TFF Sponsorship for young people under 18
TEB aims to turn tennis – one of the world’s five most popular sports and one which brings together nearly 100 million active players in 200 countries in 6 continents – into more than a game that is watched on television in Turkey. In line with this target, TEB became a brand sponsor of the BNP Paribas WTA Championships. TEB believes that by organizing the world’s most prestigious women’s tennis tournament in Turkey over a period of 3 years will contribute significantly to the promotion of Turkey and to the national economy.
One of TEB’s most important targets is to set up new alternative sports fields for young people. In line with this target, TEB became the primary sponsor of the Turkish Tennis Federation. TEB also offered infrastructure support to Turkish tennis players under the age of 18, aiming to raise star tennis players from our country.
With its “Street Tennis” activity, TEB aims to bring tennis to the street, to instill a love of tennis among Turkish people and to encourage the raising of licensed tennis players. TEB will continue to invest in sport in the future.
Contributing to the Environment
As a pioneer aware of its responsibility to contribute to a sustainable environment,
TEB developed and deployed an effective and systematic management approach to
minimize the environmental impacts of its activities.
As the first deposit bank entitled to receive the ISO 14001 Environmental Management
Standard Certification, TEB sustained its efforts to become more environmentally friendly in 2012. In the first 15 months of the Environmental Management System, TEB saved a total of 3.7 million kWh of power, 16,261 tons of water and saved paper to the equivalent to saving 3,726 trees.
Contributing to the Community
Striving to contribute to the community where it has a presence, TEB was one of the organizers of the WTA Championships held in Turkey. One of the world’s most important tennis tournaments, the WTA Championships were held in Istanbul on October 25th-30th with the initiative of the Republic of Turkey’s Ministry of Youth and Sports and the Turkish Tennis Federation and with the support of TEB. TEB provided a great contribution to Turkey’s promotion with this event, which was viewed by about 800 million people around the world on TV and 70,000 people at the tennis court. As one of the organizers of this prestigious sports event which won the approval of tennis authorities and tennis fans alike, TEB was handed the Billie Jean King Award by the WTA. The tournament, which will be held again in Turkey in 2012 and 2013, aims to raise Turkish people’s interest in tennis and be a significant source of motivation for professional tennis players.
Aiming to raise its employees’ awareness of their social responsibility, TEB continues to increase the number of volunteering projects every year. In this context, 70 TEB employees ran in the International Eurasia Marathon, collecting donations for the Spinal Cord Paralytics Association of Turkey. Also reading books for the Technology and Education Laboratory for the Visually Disabled (GETEM), a division under the Bosporus University, TEB Volunteers have recently collected toys for the toy libraries opened in Anatolia by the Foundation for the Support of Women’s Work (FSWW).
SECTION IV – BOARD OF DIRECTORS
15. Structure and Composition of the Board of Directors
The list of board members of TEB as of 31.12.2012 is as follows:
Name |
Position |
Yavuz Canevi |
Chairman |
Dr. Akın Akbaygil |
Deputy Chairman |
Jean-Paul Sabet |
Deputy Chairman |
Varol Civil |
Executive Member and General Manager |
Sabri Davaz |
Member |
Yves Paul Henri Martrenchar |
Member |
Jean-Milan Charles Dominique Givadinovitch |
Member |
Ayşe Aşardağ |
Member |
Yvan L.A.M. DeCock |
Member |
Alain Georges Auguste Fonteneau |
Member |
An up-to-date list of the members of the Board of Directors and their resumes are available on TEB’s website.
The qualifications required for membership in the Board of Directors are specified in Article 22 of the Articles of Association and the relevant provisions of the Banking Law. The qualifications of TEB board members comply with applicable legislation and the Corporate Governance Principles.
Capital Markets Board’s new regulations regarding Corporate Governance Principles released on December 30, 2011 are effective since December 31, 2012. This new regulation brings compulsory rules to public companies to have an independent member in Board of Directors, TEB has started to develop strategies to reorganize its existing structure to be coherent with new regulations.
Article 28 of TEB’s Articles of Association on Prohibited Transactions states the following:
“Activities and transactions that the Chairman and members of the Board of Directors as well as the Chairman and Members of the Credit Committee may not engage in are specified in the relevant provisions of the Turkish Commercial Code, the Banking Law and the Capital Markets Law.
16. Board of Director’s Main Business Objectives
Meetings of the Bank’s Board of Directors are organized through the General Secretary of the Board of Directors. Members of the Board of Directors submit to the General Secretary any items that they want to be included in the agenda and the final agenda is communicated to the members at least one week before the meeting.
The Board of Directors has taken 154 decisions in 2012. As mentioned above, the General Secretary is responsible for the implementation of these matters. All decisions during the reporting period were made unanimously and no dissenting opinion was noted.
Members who do not attend a meeting based on a reasonable ground are informed of the resolutions taken in their absence at the first meeting they attend. There are meeting minutes whereby the decisions taken are noted. TEB’s Articles of Association does not contain any provisions on weighted voting rights or negative veto rights.
17. Committees, Structure and Independence of Board of Director’s
In accordance with corporate governance principles, the following committees were active in 2012:
Corporate Governance Committee
Follow - up on the Corporate Governance applications in the Bank
Meets every three months
Chairman |
Chairman of the Board |
Yavuz Canevi |
|---|---|---|
Members |
Chairman of the Board, Committee Chairman Financial Affairs Assistant General Manager |
Yavuz Canevi |
Secretary |
Investor Relations and Corporate Governance Manager |
Çiğdem Çelikbilek |
Audit Committee
Meets every two months
Members: JeanMilan Givadinovitch, Chairman
Dr.Akın Akbaygil, Deputy Chairman
and other possible attendees requested with respect to the agenda.
18. Risk Management and Internal Control
In accordance with the provisions of the Banking Law No: 5411, the Bank has established an “Audit Committee” reporting to the Board of Directors through two non-executive board members exclusively appointed for this task.
The Board of Directors has set up the Audit Committee for the following purposes
19. Strategic Plans and Targets
At our Bank, all targets, primarily budget targets are assessed and approved by Board of Directors. Meetings with senior managers, branch managers, and other related managers are organized to evaluate Bank’s achievements (in line with targets) and to discuss the initiatives for staying behind the planned target.
20. Remuneration of the Board of Directors
At the Ordinary General Meeting of Shareholders held on 31 March 2011, it was resolved that no fees be paid to the members of the Board of Directors, who shall continue to perform this duty voluntarily and that a gross monthly fee of TRY 750.- be paid to Statutory Auditors. Remuneration to be paid to Executive Board Members is determined by the Board of Directors in accordance with Article 27 of the Articles of Association and in view of the nature of the duties involved and the time to be spent to fulfill these duties. In 2012, TRY 26,258,610 was paid to the Members of the Board of Directors and top management as salaries rights and financial benefits.
Board members may be granted loans within the limits defined by law or may be rewarded depending on the performance of the Bank, the duties vested on them and the time spent by them to fulfill these duties.