148 10 3494 https://omeka.ibu.edu.ba/files/original/2778c41dcb92ba594fd7a94be7e6c826.docx 2aa7a6ef745a0c5a8a017b2249e752c9 https://omeka.ibu.edu.ba/files/original/5ab1d8de6f3830b1ac49f71ceba2ea86.pdf 66bd0c943ef4b626100d4c0a7fead0ed PDF Text Text International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Political Space Philosophies in the History of the Political Thoughts of the Western European Universalism and the European Union İdiris Demirel Celal Bayar University, Manisa, Turkey idirisdemirel@gmail.com Hüseyin Gül Adnan Menderes University, Aydın, Turkey huseyingul@adu.edu.tr Abstract There exist certain historical premises and foundations thought to render the idiosyncratic structure of the European/western civilization possible. One of the most important domain related to these foundations and premises is the political -space philosophy along with the European Universalism that stemmed from the European history of political roots. The political space centered on the Polis (city-state) in the ancient Greek political sphere is replaced the "world state" thought of the Cynic and Stoic philosophers of the Ancient Hellenistic and Roman political spheres. The early Catholic Christian philosopher St. Augustine and the late Catholic philosopher St. Thomas converge to a great extent on a universalism and "world" domain while the Protestant politician is rather related to the modern nation state notion. The Dante of the late middle age and the early modernism had a more secular conception of universalism and "world state" in terms of political space. These Western approaches can be viewed in relation with the "European Universalism" framework set by the Wallerstein. The goal of this study is not to investigate the European Union or the process of Turkey's European Union membership per se. Rather, the goal is restricted to the investigation of the historical background of this phenomenon incorporating the European Universalism approach. Key Words: Political Thoughts, Political- space, West/Europe, World State, European Universalism, and European Union. Introduction: The Greek Political Thought and the Polis as the Best Political Space When the European thought is viewed from a historical perspective from the beginning it can be seen that the primary question was the best type of state or governance. Although the near antique philosophers including Platon and Aristotle suggested different opinions with respect to the attributes of best state or best forms of governance, one common feature of their view was the general appreciation for political space without further discussions. Even though the political systems that the philosophers adhered differs to a large degree, it is evident that the polis, the city states were adopted by the philosophers as the best space for the application of the political systems per se (Ebenstein, 1996, p. 27-29; Tannenbaum and Schultz, 2010, p. 72-74). At this stage, a city beyond the boundaries of a city-state was not identified as the best. The notion of best here is at the heart of universally valid truth. 1 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo The ancient empire that was built by Alexender the Great did not lead to a political space philosophy that differs from the Greek Philosophy of its age. As for Platon, the philosopher who resembles the philosophical thought of the ancient Greek, the polis was the most convenient political space so it was for his pupil Aristotle, the tutor of the Alexander the Great. Not only for the philosophers but also for the different social strata the polis was the focal in the design of the community life. Citizenship denoted the identification with the polis which one belonged at that age where the communal and personal categorizations such as slavery, foreignness, citizenship were valid. By a kind of early Eurocentric distinction, being a Greek not being a Barbarian and being a part of the Greek civilization was primarily related with the polis, the political space of that era. The population those city states varied between 2000-10000. The population of Athens exceeded 100000 from time to time. There was a collective desire to keep the population at a level which ensured the familiarity among the people in the community. Organic state life was the case for the polices as the ideal and the actual best political space. Political space was also related to social structure and properly regime. Those who were entitled to be citizens’ higher social status and have the right to hold property. Those who did not have a citizenship bound to the city were lower in the social status hierarch. They did not have right to have property in the example of slavery. Besides the common beliefs or rituals each polis had peculiar belief gods and rituals. Briefly, it was not European wide, worldwide, empire wide or a nationwide political space theory or practice without determine marked the Ancient Greek sphere. The political and humanities war focus consisted of and was determined by state in the Polis form. The collective and public identity which had belonged to the Polis was above and beyond individual and private identity. Moreover there was no evident social emphasis that was separated from state by Platon and Aristo. The political place which is called the Polis were both societal political and social per se and these characteristics were bound to each other within on organic integration. Helenistic and Roman Political thought Transtion from Polis World State When we rule out of the Greek sphere of the antique Europe from geographic and historical aspects and take Hellenistic and roman political thought into account, it can be see that there is a paradigm sight toward quest and philosophy of political thought and political space on a world scale centered on the Polis. Another way of saying, following the Ancient Greek when we look at schools of antiquity such as Cynics and Stoah we can observe certain paradigm shift around the issue of political space. They envision a universal world state beyond the imagination of city- state “nation state”, “empire” or “European Union”. This new political place philosophe donates a critique against the Greek word and a notable innovation. There upon while the political space expands beyond the city scale and European Union side, leapingto several world scale, the superiority of public over private and collecting over individuality ends. A more individual centered world-scale political space philosophy emerges. On practice, essentially for the Roman and Macedonians before them smalljurispendenceof local governments in the real politic. The new real politic of world emprialism individual must come to terms with the idea that he is the part of a 2 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo complex political space full of foreign people and thoughts (Ebenstein, 1996; p. 57; Tannenbaum and Schultz, 2010, p.104-104; Frank and Gills, 2003, p.246). When compared with the citizens of the city-state, the citizens of the new empyreal faced with double anxiety. First, they were at a more intensely faith individual domain and from they were entrapped in more universal realism than before perceptively. In this venin, when the issue is the best state or the best government, the political thought suggests the world state concept drawing on a universal idea. In the non-Greek but Helenistic political of the Antique Europe not only sphere vision of space expanded but also the nation of individual cosmopolitism and “world citizenship” also value. Considering of the interaction between the imaginative political thought and the social economic and political reality, Polises are focused to unite morale, to overcome the problems of self-sufficiency stemming from being a small state to protect against the Macedonian and Persian threats. In the Hellenistic philosopher ancient era virtue/knowledge cosmopolitism political space or state philosophy were interactively operationalized, accommodating each other. A person who has knowledge/wisdom/virtue/ turns into type of person who acts in a worldscale perspective, detaching himself from his local bounds. There is no one culture, tradition, no one peculiar nationalism, religion or language for this person. The cynics who criticize the local state thought instead suggest a world state where all human-beings have equal citizens Hence, the city state philosophy of the Antique Greek expanded radically. City focused citizenship thought practice and theory was forsakenfor world citizenship thought. Going from Stoics toward Hellenistic’s at the same time means to evolve from the Hellenistic world to Roman world. Running approximately from BC 300 to AD 200 Stoicism was one of the most eras;it was founded by foreigner in the Greek sense. Stoics did not see the individual as a unit of the collective rather took the person as individual per se. ın the tightly over state of Platon an Aristotle individual was to submit the law and tradition of his own society, whereas now it exists on his own and the goal is not to submit to the collectively rather “to live in harmony with the nature” and “know oneself”. It would not be wrong assert that the groundwork of “universal human rights” idea was set by human premises of the Stoic philosophers. The notion of the “world sate” developed by the Stoics in also associated with their presumption of reason, universes god, and legislation, universalism and law. In so far as, all universes the humans essentially operate with the same reason. There is only one common sense in all conditions. Hence, there is a law on which the universe including the humans acts, which is called the universal law. This universal law is valid in all space and time horizons Stoic thinkers called law as the “natural law” not only is the human beings and other things but also God acts in accord with the universal law (Ebenstein, 1996, p. 58; Çaha, 2008, p.32-35). Universal reason, universal legislation, together bring about the notion of a “world state”. Since the humans are the same by nature, their governance should be the same within take same state. Whilst the humans are bound to their local states through their tradition, they are simultaneously a citizen of the state through their reason. The universal law of the world state would be above the local state and law binding the rulers and their followers as well (Çaha, 2008, p.32-35). Here, the radical innovation of the world state philosophy bearing upon universal law should be emphasized. Cicero, one of the most influential names of the antique era, also adopted the universal law principle through a stoic understanding, reflecting on the existence of a natural law that originates from the God’s rule or the universe and the human’s possession of reason. This natural law is valid and binding for all times, spaces and societies. If would be unthinkable to deviate from the natural law when engaging in positive law regulations. Hence, this 3 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo natural law becomes a kind of a kind world state constitution (Çaha, 2008, p. 39-40). According to the Ebenstein, a remarkable novelty seems to arise when the inner meaning of the political thought of Cicero is taken into consideration. Namely, Cicero has a world view. On the contrary, when the “best”” political-space philosophy of Platon and Aristotle are reviewed. It can be recalled that they could not go beyond the conception of Polis/Citystate. Both Platon and Aristotle did not incorporate a universal humanity conception in their political philosophy. For them, the World is separated between the Greeks and the Barbars and the Barbars are inferior to the more cultivated and civilize Greeks who have the right to enslave them. Contrary to this conception, It is apparent that Cicero has a more universal view arising from the political and administrative the Empire. When the Hellenistic and roman political thought is taken together in a concise manner in terms of political space philosophies, it is evident that the city-bound political thought had been abandoned, the local state scale had been replaced by universalist scale, and a new World state perspective transcending the European Union idea owing to Universalist idea emerged. Besides the World State nation, individual attains higher priority within the individual collective distinction, and contrary to the Greeek sphere the view of universal equity of humans is defended (Ebenstein, 1996, p. 52-53; Çaha, 2008, p. 36). Briefly, both the city-state scale and the type of human it accommodates remain in the past as a European development phase. Christian Politaical Thought and the Modern Political Thought and the European Unversalism In terms of political space philosophy the western political thought can be elaborated including both Catholics and Protestantism. In this vein, both “God State” and the world state philosophies of St. Augustine, one of the early Middle age Catholic philosophers are designs that transcend local and national boundaries According to St. Thomas, a Catholic philosopher of the Middle age of Europe since the universe was created beginning with God in a gradually descending hierarchy reaching lower beings, it is maintained by a universal will while the catholic universalism of World state maintaining a kind of natural law and World-scale under the influence of ancient Greek, Helen and Roman political thought rather engaged in modern nation state, setting European Unity aside (Çaha, 2008, p. s. 52; Tannbaum and Schultz, 2010, p. 122, 144-148. When Protestants encourage the national churches as an argument against papacy and Roman Church, they also encourage the nationality, national languages and national identities, hence, the development of nation state as “the best” political space (Wallerstein, 1993; s. 188). National Churches promote nation state in the political space sphere, gradually suggesting national attachments, submission to national ruler and state. It would be necessary to designate that Protestantism also promotes secularity individualism and, hence the modernity (Çaha, 2008, p. 60-61). Dante Alighieri (1269-1321), a poet and a philosopher at the down of the modernity also advocated the World state in the contest of political space philosophy. Dante reflected on and indeed advocated a World state reeled by a monarch for the sake of human welfare in his political masterpiece De Monarchia. For him, since the monarch is to be at everyone2s service, the humanity would be freer in such a regime when compared with local and national states/monarchies. It is worthy to note that Dante’s quest for World state successfully discriminates between the consequences of political domination that the central power must assume and the cultural autonomy. As each of the nations, kingdoms and states would have different legislation, the nations would protect themselves within a political World state via cultural autonomy. Dante goes beyond Christian political 4 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo universalism by discharging Ebenstein, 1996, pp. 106-116). Owing to a secular approach that involves the direct, intermediated authority of God without any guidance, assistance and intervention of Church/Papacy. Not only political thought of the ancient age but also political thought of Middle Age apparently abandoned for modernity. By the 16th century, national states gradually emerged as the best political space. Conclusion European universalism and European Union With it’s approximately 2500 year background, the universalism approach whose frame work was set by the Cynics and Stoic philosophers drawing on the World-scale ideas continued in the late modern era the way it existed in the Middle Ages and early modernity. According to Wallerstein “The rhetoric of the Pan-European leaders, mass media and the founding intellectuals is full of references to universalism of their policies. That is quite apparent when they talk particularly about their policies about “others”. The “others” are the countries outside the Europe, poor people and “underdeveloped” nation (Wallerstein, 2007; s. 11; Samir Amin, 1993; s. 24-25). While the remarks of the speaker were uttered in manner, the politics are always presented as the reflection of truth and universalism. Samir Amin says “according to representatives of this dominant Eurocentric trend, Europe have already found the answer. Hence, their motto is “We are following Europe, the best of the existing worlds.” What is meant by the European Universalism in the fore mentioned quotations is the attitude to justify the aggressive expansionism against the non-European poor people and underdeveloped policies under the cover of universal values and facts. European universalism which is characterized by the interpretation on non- European societies from European point of view can be classified in to three types with respect to its course of existence. First, policies that are accepted by the Paeuropean- European leaders are set to promote the protection of human rights and democracy. Second, European Universalism embedded in the jargon of clash of civilization. According to this argument, since western civilization is the only depending on universal values and facts it is deemed to be superior to other civilization. Thirdly, the governments have no alternatives but to accept and apply the laws of economics within the context of scientifically justified facts of the market. According to Wallerstein, these are not brand new themes. By contrast, they are the theme that have evolved since at least sixteenth century and make up the rudimentary rhetoric of powerful (Wallerstein, 1993, p. 12; Mackerras, 2005, p. 737). The same European Universalism can be viewed from the aspect of modern world system as the history of the system to a large extent was the history of the expansion of the Europe States and nations to the rest of the world. Remanding the earlier world state emphasizes the system geographically became global and in the late 19th century and incorporated the periphery of the world in the late 20th century. The system contains several political regimes that surely matters the people who live in that particular states. However, these differences do not change the fundamental fact that they are the constituents of the modern system, the capitalist world economy. On the other hand, in the aftermath of the “cold war” it is thinkable that a salient polarization was replaced by a fuzzy polarization involving many players more or less equal to each other (Wallerstein, 2001, p. 79). The aforementioned Western/European expansionism means the military invasion, economic exploitation and subjugation of the non-European part of the world to legal and political 5 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo injustice. Those who carry out the universal European expansionism thought to legitimize their policies by claiming that “they are bringing in more benefit for the humankind” European Universalism has been operationalized as the ideology of the existing historical and modern capitalist system. The general argument is that the European expansionism comes with “benefits” such as civilization, economic growth, development, progress and is often operationalized by so-called the “natural law”. It is claimed by the European expansionism is not only a “beneficial development for humankind but also proves to be historically unavoidable” (Wallerstein, 1993, p. 40; Demirel, 2008, s. 49) . The rhetoric used to describe and legitimize this expansionism sometimes occurs in the form of the theology or religion, sometimes relies on secular world view. The expansions and interventions over the “non-civilized regions” of the world by the west are specifically built upon four basic legitimizer within the framework or Wallerstein, fist, the others being Barbar, namely uncivilized, second the aim to end the violation of universal values, third need to protect the innocent among the other oppressors and fourth enabling the expansion of the universal values. However, this expansion and interventions under the cover of “fight against terrorism” and sending democracy” in the aftermath of 9-11 were enabled through the political and military power of the dominant forces and were inherently induced by material gains from the invasion. One of the implications of these discussions is related to European Union. European Union is tough to be built upon universal European values, however, it is often disregarded that these values are the social construction of dominant constituencies of specific world within the context of a specific cultural geography and civilization (Wallerstein, 1996; p. 12; Amir, 2000, s. 5-7). References Amin Samir, (1993). Avrupamerkezcilik Bir İdeolojinin Eleştirisi, (Türkçesi: Mehmet Sert), Ayrıntı Yay., İst. Amin Samir, (2000). Değişim Halindeki Dünya Sistemi, (Türkçesi: Fikret Başkaya), Maki Bas. Yay., Ank.. Çaha Ömer, (2008). Siyasi Düşüncelere Giriş, Dem Yay., İst.. Demirel İdiris, (2008). Batı Avrupa Bilimine Ontolojik Temelleri ve Avrupamerkezci İdeolojik İçerimleri Ekseninde Heideggeryen Bir Yaklaşım, Uludağ Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, C: XXVII, S: 1. Ebenstein William, (1996). Siyasi Felsefenin Büyük Düşünürleri (Türkçesi: İsmet Özel), Şule Yay., İst. Gills Barry, K., (2003).“Dünya Sisteminde Hegemonik Geçişler”, Andre Gunder Frank ve Barry K. Gills (Der.), Dünya Sistemi Beş Yüzyıllık mı, Beş Binyıllık mı?, (Türkçesi: Esin Soğancılar), İmge Kitabevi, Ank. Mackerras Colin, (2005). “Eurocentrism”, New Dictionary of the History of Ideas, (Ed: Maryanne Cline Horowitz), Thomson-Gale Publ., USA. Tannenbaum Donald G. Ve Schultz David, (2010). Siyasî Düşünce Tarihi Filozoflar ve Fikirleri, (Türkçesi: Fatih Demirci), Adres Yay., Ank. 6 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Wallerstein Immanuel, (1993). Jeopolitik Ve Jeokültür Değişmekte Olan Dünya—Sistem Üzerine Denemeler, (Türkçesi: Mustafa Özel), İz Yay., İst. Wallerstein Immanuel, (1996). “Kapitalizmin İdeolojik Gerilimleri: Irkçılık ve Cinsiyetçilik Karşısında Evrenselcilik”, Etienne Balibar ve Immanuel Wallerstein, Irk Ulus Sınıf, (Türkçesi: Nazlı Ökten), Metis Yay., İst. Wallerstein Immanuel, (2001). Ütopistik Ya Da Yirmi birinci Yüzyılın Tarihsel Seçimleri (Türkçesi: Taylan Doğan), Avesta Yay., İst. Wallerstein Immanuel, (2007). Avrupa Evrenselciliği İktidarın Retoriği, (Türkçesi: Sinan Önal), Aram Yay., İst. 7 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2333 Title A name given to the resource Political Space Philosophies in the History of the Political Thoughts of the Western European Universalism and the European Union Author Author DEMIREL, Idiris GUL, Huseyin Abstract A summary of the resource. There exist certain historical premises and foundations thought to render the idiosyncratic structure of the European/western civilization possible. One of the most important domain related to these foundations and premises is the political -space philosophy along with the European Universalism that stemmed from the European history of political roots. The political space centered on the Polis (city-state) in the ancient Greek political sphere is replaced the "world state" thought of the Cynic and Stoic philosophers of the Ancient Hellenistic and Roman political spheres. The early Catholic Christian philosopher St. Augustine and the late Catholic philosopher St. Thomas converge to a great extent on a universalism and "world" domain while the Protestant politician is rather related to the modern nation state notion. The Dante of the late middle age and the early modernism had a more secular conception of universalism and "world state" in terms of political space. These Western approaches can be viewed in relation with the "European Universalism" framework set by the Wallerstein. The goal of this study is not to investigate the European Union or the process of Turkey's European Union membership per se. Rather, the goal is restricted to the investigation of the historical background of this phenomenon incorporating the European Universalism approach. Key Words: Political Thoughts, Political- space, West/Europe, World State, European Universalism, and European Union. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 978-9958-834-23-3 https://omeka.ibu.edu.ba/files/original/b8d7516e7b9472ac6aa34f0db4b135d8.pdf 1ee422ce60e74fc71cf302dc6072027f PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo European Union within the Context of “World-State” and “European Universalism” in the History of Western Political Thought İdris Demirel Celal Bayar University, Manisa, Turkey idirisdemirel@gmail.com Hüseyin Gül Adnan Menderes University, Aydın, Turkey huseyingul@adu.edu.tr There is a historical background and assumptions which form the essentials of European/Western civilization. These assumptions and fundamentals also form the economic, social and political structures of the European/Western civilization. One of the important elements of these fundamentals is the ideal of “World state” and “European Universalism”. The political thought based on the “polis-centered” political thought represented by Platon and Socrates was transformed especially by the stoic philosophers during the Hellenistic and Roman period into the ideals of “brotherhood of the human beings” and “world state”. Late Christian philosopher St Augustinus has developed the ideal of “unity of human beings” through philosophy of law. During the late medieval and early modern period, Dante put this ideal into a more secular context. These views can be analyzed through the “European Universalism” approach developed by Immanuel Wallerstein. The purpose of the study is to approach the European Union in the light of this historical background and with a critical perspective. Keywords: Political thought, civilization, West/Europe, World State, European Universalism, European Union. 167 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1607 Title A name given to the resource European Union within the Context of “World-State” and “European Universalism” in the History of Western Political Thought Author Author DEMIREL, Idris GUL, Huseyin Abstract A summary of the resource. There is a historical background and assumptions which form the essentials of European/Western civilization. These assumptions and fundamentals also form the economic, social and political structures of the European/Western civilization. One of the important elements of these fundamentals is the ideal of “World state” and “European Universalism”. The political thought based on the “polis-centered” political thought represented by Platon and Socrates was transformed especially by the stoic philosophers during the Hellenistic and Roman period into the ideals of “brotherhood of the human beings” and “world state”. Late Christian philosopher St Augustinus has developed the ideal of “unity of human beings” through philosophy of law. During the late medieval and early modern period, Dante put this ideal into a more secular context. These views can be analyzed through the “European Universalism” approach developed by Immanuel Wallerstein. The purpose of the study is to approach the European Union in the light of this historical background and with a critical perspective. Keywords: Political thought, civilization, West/Europe, World State, European Universalism, European Union. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/947ed3afcfe74716316d8dff9cb80474.pdf 12fc7f3bb26f524244841e581e222c5d PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo The Impact of the Economic Crisis on the European Union’s Policies toward the Western Balkans Birgül Demirtaş TOBB University of Economics and Technology, Ankara, Turkey birgul.demirtas@etu.edu.tr The European Union can be considered as the major actor in the Western Balkans in terms of its political and economic impact in the last decade. It is one of the biggest trade partners of the regional countries as well as biggest donor of aid. It has also played an active role in the post-war reconstruction of the states as seen for example in its role in Kosovo and Bosnia-Hercegovina, mainly in terms of institutional structures like EULEX, International Civilian Office and Office of High Representative. However, as the global economic crisis started to spill over to the EU member countries, it led to the increase of the trend of “enlargement fatigue”. Hence, though all the Western Balkan countries are taking part in the European accession process, except Croatia there is not much hope that enlargement process of the regional countries would speed up due to internal problems as well as the Union’s policies. As the Commissioner for Enlargement Stefan Füle remarked there is also reform fatigue in the candidate states. Thus, “enlargement fatigue” of the European Union and “reform fatigue” of the regional states feed each other and create enlargement dilemma. As the EU loses its will and eagerness to expand, the regional actors’ enthusiasm for reforming their structures is decreasing. As the EU is focused in general much more on its internal issues in the recent years, and lost its energy to develop new initiatives for the solution of the regional problems, Turkey, as a regional actor, since 2009 started to launch new proposals for the regional issues, as seen for example in its trilateral initiatives: on the one hand among Turkey, Serbia and Bosnia Herzegovina, on the other hand among Turkey, Croatia and Bosnia Herzegovina. This research aims to examine how the current economic crisis in the European Union members affects the attitude toward the neighbouring region of the Balkans. My main research questions are as follows: How is the discourse of European Union decision makers toward the Western Balkans affected by the economic problems? Is there any considerable change in policy implementations? What are the repercussions of the EU’s increasing enlargement fatigue on the region? How does the EU’s 65 �International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo performance in the region affect its actorness global affairs? How does the EU evaluate Turkey’s initiatives toward the region? In fact, EU’s attitude underwent considerable changes since the 1990’s. As the European Community (EC) has gone through a radical structural transformation in the 1990s due to both deepening and enlargement, the conflicts in the Western Balkans started to be considered as a test case for this changing Europe. Conflicts, wars, and tensions that broke out in the former Yugoslavian territories and disturbed the whole Europe proved that the emerging new era following the end of the bipolar international politics was not going to be as peaceful as it had been longed for. The complexity of the problems of former Yugoslavia has effected the evolution of the European Union which has been, with the encouragement of the US, trying to be a regional actor by developing a more coherent approach toward the issues of foreign affairs and security policies among its member states. The research will have a conceptual part discussing different views on the global actorness of the European Union. George Modelski in his study “The Long Cycle of Global Politics and the Nation-State” defines world powers as follows: “… world (or) global powers control (or substantially control) the global political system and hence also have the capacity to regulate other global processes (such as long-distance travel).” Keywords: European Enlargement. Union, Western 66 Balkans, Economic Crisis, � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1562 Title A name given to the resource The Impact of the Economic Crisis on the European Union’s Policies toward the Western Balkans Author Author DEMIRTAS, Birgul Abstract A summary of the resource. The European Union can be considered as the major actor in the Western Balkans in terms of its political and economic impact in the last decade. It is one of the biggest trade partners of the regional countries as well as biggest donor of aid. It has also played an active role in the post-war reconstruction of the states as seen for example in its role in Kosovo and Bosnia-Hercegovina, mainly in terms of institutional structures like EULEX, International Civilian Office and Office of High Representative. However, as the global economic crisis started to spill over to the EU member countries, it led to the increase of the trend of “enlargement fatigue”. Hence, though all the Western Balkan countries are taking part in the European accession process, except Croatia there is not much hope that enlargement process of the regional countries would speed up due to internal problems as well as the Union’s policies. As the Commissioner for Enlargement Stefan Füle remarked there is also reform fatigue in the candidate states. Thus, “enlargement fatigue” of the European Union and “reform fatigue” of the regional states feed each other and create enlargement dilemma. As the EU loses its will and eagerness to expand, the regional actors’ enthusiasm for reforming their structures is decreasing. As the EU is focused in general much more on its internal issues in the recent years, and lost its energy to develop new initiatives for the solution of the regional problems, Turkey, as a regional actor, since 2009 started to launch new proposals for the regional issues, as seen for example in its trilateral initiatives: on the one hand among Turkey, Serbia and Bosnia Herzegovina, on the other hand among Turkey, Croatia and Bosnia Herzegovina. This research aims to examine how the current economic crisis in the European Union members affects the attitude toward the neighbouring region of the Balkans. My main research questions are as follows: How is the discourse of European Union decision makers toward the Western Balkans affected by the economic problems? Is there any considerable change in policy implementations? What are the repercussions of the EU’s increasing enlargement fatigperformance in the region affect its actorness global affairs? How does the EU evaluate Turkey’s initiatives toward the region? In fact, EU’s attitude underwent considerable changes since the 1990’s. As the European Community (EC) has gone through a radical structural transformation in the 1990s due to both deepening and enlargement, the conflicts in the Western Balkans started to be considered as a test case for this changing Europe. Conflicts, wars, and tensions that broke out in the former Yugoslavian territories and disturbed the whole Europe proved that the emerging new era following the end of the bipolar international politics was not going to be as peaceful as it had been longed for. The complexity of the problems of former Yugoslavia has effected the evolution of the European Union which has been, with the encouragement of the US, trying to be a regional actor by developing a more coherent approach toward the issues of foreign affairs and security policies among its member states. The research will have a conceptual part discussing different views on the global actorness of the European Union. George Modelski in his study “The Long Cycle of Global Politics and the Nation-State” defines world powers as follows: “… world (or) global powers control (or substantially control) the global political system and hence also have the capacity to regulate other global processes (such as long-distance travel).” Keywords: European Union, Western Balkans, Economic Crisis, Enlargement.ue on the region? How does the EU’s Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/0c17f78e000e3bcc4870e8c03d312a3d.pdf e77cc9ecd8639e8a6577732d30e71fdc PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Tourism Performance of Balkan Countries: Travel and Tourism Competitiveness Pillars as Determining Factors Kazım Develioğlu Akdeniz University, Alanya Faculty of Business, Alanya-Antalya / TURKEY kdevelioglu@akdeniz.edu.tr Kemal Kantarcı Akdeniz University, Alanya Faculty of Business, Alanya-Antalya / TURKEY kantarci@akdeniz.edu.tr Contemporary volatility of global macroeconomic environment necessitates governments to balance their countries’ macroeconomic figures. In this unpredictable environment, tourism has been valued as a good source of foreign currency and employment. In this sense, WTTC’s 2012 report indicates that over the next ten years tourism industry is expected to account for 1 in every 10 jobs on the world. To succeed this goal country should increase their capabilities and develop a competitive position to attract more tourists from around the world. In this sense, tourism performance can be evaluated as a result of using competition tools effectively in order to create a sustainable macroeconomic environment. In this study, we use World Economic Forum’s (WEF) classification of Travel and Tourism Competitiveness factors to examine resources that are expected to influence tourism performance in Balkan countries. Tourism performance is measured by two variables: International tourist arrivals and tourism receipts. Additionally, we measured competitive factors in tourism industry using WEF’s classification of Travel & Tourism competitiveness factors, which consists of three sub-indexes and 14 factors that measure these sub-indexes that are reported below:   T&T regulatory framework (Policy rules and regulations, Environmental sustainability, Safety and security, Health and hygiene, Prioritization of Travel & Tourism) T&T business environment and infrastructure(Air transport infrastructure, Ground transport infrastructure, Tourism infrastructure, Information and Communication Technology (ICT) infrastructure, Price competitiveness in the T&T industry) 182 �International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo  T&T human, cultural, and natural resources (Human resources, Education and training, Availability of qualified labour, Affinity for Travel & Tourism, Natural resources, Cultural resources). Methodology In this study, the Balkans comprises the following countries: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Macedonia, Montenegro, Romania, Serbia, Slovenia, and Turkey. In order to investigate the impact of Tourism & Travel competitiveness factors on the performance of Balkan countries, we obtained the data from The World Economic Forum’s “The Travel and Tourism (T&T) Competitiveness Index” for the years between 2008-2011 that is, currently, the only available data. To reveal the relationship between aforementioned independent and dependent variables, we performed two-separate multiple regression analyses and obtained some useful insights, which are reported below. Findings The first multiple analysis results, in which tourist arrivals is used as dependent variable, reveal that air transport infrastructure, safety-security, and human resources factors are three variables that have the potential to influence the number of tourists to visit Balkan countries. The second multiple regression analysis results indicate that air transport infrastructure, cultural resources, and human resources have the greatest impact on international tourism receipts among aforementioned fourteen competition factors. Keywords: Balkan Countries, Tourism Performance, Travel&Tourism Competitiveness Index, Strategic Marketing. 183 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1671 Title A name given to the resource Tourism Performance of Balkan Countries: Travel and Tourism Competitiveness Pillars as Determining Factors Author Author DEVELIOGLU, Kazim KANTARCI, Kemal Abstract A summary of the resource. Contemporary volatility of global macroeconomic environment necessitates governments to balance their countries’ macroeconomic figures. In this unpredictable environment, tourism has been valued as a good source of foreign currency and employment. In this sense, WTTC’s 2012 report indicates that over the next ten years tourism industry is expected to account for 1 in every 10 jobs on the world. To succeed this goal country should increase their capabilities and develop a competitive position to attract more tourists from around the world. In this sense, tourism performance can be evaluated as a result of using competition tools effectively in order to create a sustainable macroeconomic environment. In this study, we use World Economic Forum’s (WEF) classification of Travel and Tourism Competitiveness factors to examine resources that are expected to influence tourism performance in Balkan countries. Tourism performance is measured by two variables: International tourist arrivals and tourism receipts. Additionally, we measured competitive factors in tourism industry using WEF’s classification of Travel & Tourism competitiveness factors, which consists of three sub-indexes and 14 factors that measure these sub-indexes that are reported below:  T&T regulatory framework (Policy rules and regulations, Environmental sustainability, Safety and security, Health and hygiene, Prioritization of Travel & Tourism)  T&T business environment and infrastructure(Air transport infrastructure, Ground transport infrastructure, Tourism infrastructure, Information and Communication Technology (ICT) infrastructure, Price competitiveness in the T&T industry)  T&T human, cultural, and natural resources (Human resources, Education and training, Availability of qualified labour, Affinity for Travel & Tourism, Natural resources, Cultural resources). Methodology In this study, the Balkans comprises the following countries: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Macedonia, Montenegro, Romania, Serbia, Slovenia, and Turkey. In order to investigate the impact of Tourism & Travel competitiveness factors on the performance of Balkan countries, we obtained the data from The World Economic Forum’s “The Travel and Tourism (T&T) Competitiveness Index” for the years between 2008-2011 that is, currently, the only available data. To reveal the relationship between aforementioned independent and dependent variables, we performed two-separate multiple regression analyses and obtained some useful insights, which are reported below. Findings The first multiple analysis results, in which tourist arrivals is used as dependent variable, reveal that air transport infrastructure, safety-security, and human resources factors are three variables that have the potential to influence the number of tourists to visit Balkan countries. The second multiple regression analysis results indicate that air transport infrastructure, cultural resources, and human resources have the greatest impact on international tourism receipts among aforementioned fourteen competition factors. Keywords: Balkan Countries, Tourism Performance, Travel&Tourism Competitiveness Index, Strategic Marketing. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/cd5dbeb4f65df56089578d00cbaafdb3.pdf 64b7ada522937f040fc3d14a440c17a6 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo In The Process of Global Crisis the Importance of Tourism in Decreasing Regional Development Differences: An Evaluation of Kastamonu Province in Turkey Serkan Dilek Kastamonu University, Kastamonu, Turkey serkan.dilek@gmail.com Orhan Kandemir Kastamonu University, Kastamonu, Turkey okandemir@kastamonu.edu.tr The possibilities of transferring sources to decrease regional development differences by public authorities have been limited in the process of global crisis. Kastamonu Province, that was studied in our study, has occupied 47th place between 81 Provinces according to socio-economic development ranking in The State Planning Organization* 2011 data. Using tourism potential of Kastamonu Province, that has important tourism potential according to SWOT analysis done in this study, will accelerate socio-economic development of Province. In the process of Global crisis, evaluating tourism potentials successfully in less developed regions such as Kastamonu province will provide opportunity to remove regional development differences without using more public sources. Keywords: SWOT Analysis, Regional Development Differences, Tourism Economy, Socio-Economic Development, Global Crisis. * The State Planning Organization was reorganized as the Ministry of Development in June 2011. 256 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1620 Title A name given to the resource In The Process of Global Crisis the Importance of Tourism in Decreasing Regional Development Differences: An Evaluation of Kastamonu Province in Turkey Author Author DILEK, Serkan KANDEMIR, Orhan Abstract A summary of the resource. The possibilities of transferring sources to decrease regional development differences by public authorities have been limited in the process of global crisis. Kastamonu Province, that was studied in our study, has occupied 47th place between 81 Provinces according to socio-economic development ranking in The State Planning Organization* 2011 data. Using tourism potential of Kastamonu Province, that has important tourism potential according to SWOT analysis done in this study, will accelerate socio-economic development of Province. In the process of Global crisis, evaluating tourism potentials successfully in less developed regions such as Kastamonu province will provide opportunity to remove regional development differences without using more public sources. Keywords: SWOT Analysis, Regional Development Differences, Tourism Economy, Socio-Economic Development, Global Crisis. * The State Planning Organization was reorganized as the Ministry of Development in June 2011. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/d1f78ed2a7af5fa18eee4e173f429510.pdf 0d33849cd15be6c0298c903ea3e61a70 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Improvement of Corporate Governance Practices of İstanbul Stock Exchange (ISE) Corporate Governance Index Companies Evren Dilek Sengur İstanbul University, İstanbul, Turkey sengur@İstanbul.edu.tr A series of corporate scandals highlighted the corporate governance issue all around the world. Like other countries, Turkey has adopted strong regulatory framework for corporate governance in the last decade. The purpose of this study is to analyze the improvement in corporate governance practices of İstanbul Stock Exchange Corporate Governance Index Companies between the years of 2007 and 2012. With this purpose corporate governance rating reports of companies were examined. Based on the examination of corporate governance rating reports; it is observed that overall corporate governance ratings have been gradually increasing year by year. Further analysis demonstrates that while stakeholders section is the most strength side, board of directors is the weakest part of Corporate Governance Index Companies. Nonetheless, in 2012 a sharp increase in the ratings of board of directors section was observed thanks to enactment of new Commercial Code and enforcement of Communiqué Serial : IV, No:56. Keywords: Corporate Governance, Corporate Governance Index, Corporate Governance Rating, İstanbul Stock Exchange, Capital Market Board of Turkey. 111 � https://omeka.ibu.edu.ba/files/original/b98c6525cad08d8adcf22aa2641ba640.docx c1df6bbead45ad1a0dd5623ea5887c31 https://omeka.ibu.edu.ba/files/original/52a54baa98640e32bae29d00c19acfdf.pdf ff72614246d5149fb9d97aa07414b757 PDF Text Text International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Improvement of Corporate Governance Practices of İstanbul Stock Exchange (ISE) Corporate Governance Index Companies Evren Dilek Sengur İstanbul University, İstanbul, Turkey sengur@İstanbul.edu.tr Abstract A series of corporate scandals highlighted the corporate governance issue all around the world. Like other countries, Turkey has adopted strong regulatory framework for corporate governance in the last decade. The purpose of this study is to analyze the improvement in corporate governance practices of Istanbul Stock Exchange Corporate Governance Index Companies between the years of 2007 and 2012. With this purpose corporate governance rating reports of companies were examined. Based on the examination of corporate governance rating reports; it is observed that overall corporate governance ratings have been gradually increasing year by year. Further analysis demonstrates that while stakeholders section is the most strength side, board of directors is the weakest part of Corporate Governance Index Companies. Nonetheless, in 2012 a sharp increase in the ratings of board of directors section was observed thanks to enactment of new Commercial Code and enforcement of Communiqué Serial : IV, No:56. Keywords: Corporate Governance, Corporate Governance Index, Corporate Governance Rating, Istanbul Stock Exchange, Capital Market Board of Turkey. INTRODUCTION After a series of corporate scandals, the importance of transparency issues have increased and corporate governance has became one of the most fundamental themes for business environment. These developments have fostered widespread belief in the economic benefits of companies having more responsibility against all beneficiaries including employees, directors, shareholders, stakeholders, customers, suppliers, and the society as a whole (Yuksel, 2008). As a consequence of such developments, corporate governance principles are enacted by many countries to minimize the agencyproblem and ensure that managers act in the interests of shareholders. In addition to being a potential solution to principal-agent problem, well defined and functioning corporate governance system helps a firm to attract investment, raise funds with a low capital cost, strengthen firm performance, overcome financial crisis more easily and generate long term economic value for its shareholders. From the perspective of national development, effective corporate governance system is also essential for development of equity markets. Additionally, corporate governance leads a sustainable growth and enables companies to compete effectively in global marketplace and attract long-term capital to grow their businesses (Ararat and Ugur, 2003). The purpose of this paper is to analyze the improvements of Istanbul Stock Exchange (ISE) Corporate Governance Index Companies with respect to compliance with Corporate Governance Principles of Capital Markets Board of Turkey between 2007 and 2012. In order to demonstrate the improvement level of compliance, corporate governance rating 205 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo reports of companies which are listed on Corporate Governance Index of Istanbul Stock Exchange were examined. The analysis comprises corporate governance rating reports between the years of 2007 and 2012 to monitor the evaluation of corporate governance practices. Corporate governance rating reports of Istanbul Stock Exchange (ISE) Corporate Governance Index Companies have examined by Toraman and Abdioğlu in 2008 (Toraman and Abdioğlu, 2008), however this study is different from previous study by highlighting the improvements in the compliance degree of companies between 2007 and 2012. In this study the next section summarizes the literature review, section 2 briefly explains the development of corporate governance in Turkey, section 3 reviews research methodology and findings regarding corporate governance practices of ISE Corporate Governance Index companies. The study ends with summary, concluding remarks and recommendation for future research. 1. LITERATURE REVIEW Review of literature on corporate governance in Turkey indicates that some of the previous studies cover the development of corporate governance in Turkey. (Ararat and Ugur 2003; Ararat and Yurtoglu 2006; Yuksel 2008; Akdogan and Boyacioğlu 2010; Akdogan and Akdogan 2011; Akbulak 2011). Furthermore, Arsoy and Crowther (2008) investigated the extent of convergence of regulations and practice regarding corporate governance between Turkey and UK. They found that although corporate governance code of Turkey and UK are similar, the degree of compliance is higher for UK companies. Toraman and Abdioglu (2008) examined corporate governance rating reports of ISE Corporate Governance Index companies and they observed most powerful corporate governance practices at the stakeholders section, and the weakest corporate governance practices at the board of directors section. Mandacı and Gumus (2010) examined the effects of ownership concentration and managerial ownership on the profitability and the value of non-financial firms listed on the Istanbul Stock Exchange (ISE). They found that ownership concentration has a significantly positive effect on both firm value and profitability, while managerial ownership has a significant negative effect on firm value. Gurbuz et al. (2010) evaluated the impact of corporate governance on financial performance of companies in Turkey. They found that corporate governance practices enhance firm financial performance. Sakarya (2011) and Ergin (2012) analyzed the relationship between corporate governance rating and the return on common stocks. Both of the studies demonstrated that there is a positive correlation between the announcement of a favorable corporate governance rating score and the associated stock returns. Sengur (2011) examined whether properly implementation of corporate governance principles make difference in performance of companies in Turkey. The results of her study showed that there is no significant difference in performance of Corporate Governance Index Companies in Turkey when performance is measured in terms of ROA and Tobin Q. In their study Needles et al. (2012) concluded that Turkish high performance companies apply superior corporate governance practices in comparison to ordinary Turkish companies. 206 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo 2. DEVELOPMENT OF CORPORATE GOVERNANCE IN TURKEY In recent macroeconomic restructuring efforts of Turkey, Turkey has been adoptedstrong regulatory framework for corporate governance in the last decade. As a starting point for the implementation of best practices in corporate governance, in 2002 Turkish Industry & Business Association (TUSIAD) published a report entitled “Corporate Governance Code of Best Practices: Composition and Functioning of the Board of Directors.” Code of best practices introduced by TUSIAD comprised of voluntary principles with the aim of providing a guideline for corporations. Within the scope of its mission, in July 2003 Capital Market Board of Turkey (CMB) issued the Corporate Governance Principles of Turkey with the purpose of enhancing the corporate governance regulations for listed companies. CMB principles were established mainly in accordance with OECD Corporate Governance Principles. Additionally, CMB took into consideration the particular conditions of Turkey during the preparations stage of principles. Parallel to OECD principles, CMB Corporate Governance Principles were revised in 2005. The CMB principles are based on the principle of “comply or explain”. In other words, the implementation of the principles is optional and companies should disclose the extent of compliance and explain the reasons why some of the principles are not adopted. The implementation status of the principles should be disclosed in corporate governance compliance report that is included in the annual report as a separate section. In 2003, Corporate Governance Association of Turkey (TKYD) was founded with the aim of disseminating best practices of corporate governance. Since its foundation, TKYD has been conducting academic research projects to determine strategic priorities in Turkey with respect to corporate governance. A research project, “Governance Map of Turkey” was conducted in 2005 and indicated that boards’ excessive involvement in execution and insufficientdisclosure are the main issues in Turkish corporate world. In February 2005 Istanbul Stock Exchange (ISE) published the rules of Corporate Governance Index. ISE Corporate Governance Index has been active since August 31, 2007 and it aims to measure the price and return performances of ISE-listed companies with a corporate governance rating of minimum 7 out of 10. The corporate governance rating is determined by the rating institutions that are approved by CMB.CMB regulates principles of rating institutions under the Communiqué on Principles Regarding Ratings and Agencies (Seria: VIII, No: 51). Corporate governance rating of a company is granted upon the request of these companies and Corporate Governance Rating Reports are published by the rating agencies. Four national and one international rating institutions are permitted to rate the corporate governance practices of the companies in Turkey. These institutions are shown in Table 1. Table 1 Corporate Governance Rating Institutions Rating Institutions National Turkish Credit Rating National Saha Corporate Governance and Credit Rating Services Inc. National Kobirate Corporate Governance and Credit Rating Services Inc. National JCR Eurasia Rating International RiskMetrics Group Inc. Source:Capital Markets Board of Turkey, http://www.spk.gov.tr/indexcont.aspx?action=showpage&showmenu=yes&menuid=6&pid=10&subid=1&submenuheade r=10 207 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Under Decree Law No. 654 (Official Gazette: October 11, 2011, No:28081) the following paragraph was added to Capital Market Law in order to extend the functions of Capital Markets Board of Turkey : “to determine and announce the principles of corporate governance in the capital market, to oblige the public joint stock companies quoted in the stock exchange market totally or partially comply with the principles of corporate governance in accordance with the groups determined by taking (i) the free float rates, (ii) the number and the quality of these companies’ investors and (iii) the index which companies are subjected to and their transaction volume in a certain time zone into account so as to make a contribution to the improvement of investment environment”. With this paragraph, the Capital Markets Board of Turkey (CMB) has been authorized to determine corporate governance principles and to oblige the public joint stock companies comply with the principles. Capital Market Board published the Communiqué Serial: IV, No: 54 Principles Regarding Determination and Application of Corporate Governance Principles on 11.10.2011. The Communiqué introduced the obligation for Istanbul Stock Exchange (ISE) National-30 Index companies (excluding banks) to comply with some of the corporate governance principles. Afterwards the Communiqué Serial: IV, No: 56 Principles Regarding Determination and Application of Corporate Governance Principles replacing the Communiqué Serial: IV, No: 54 was published on 30.12.2011. With this new Communiqué the scope of application of the previous Communiqué which covered ISE National-30 Index companies (excluding banks) has been enlarged to include other companies traded on the Istanbul Stock Exchange. However, companies trading on Watch List Market and Developing Companies Market are exempted from mandatory implementation of Corporate Governance Principles. By the Communiqué Serial: IV, No: 56, the public joint stock companies that are quoted in the Istanbul Stock Exchange (ISE) were divided systematically into three groups by taking into account of their market values and the market values of their shares in circulation. Each categories are required to obey different level of mandatory rules. Under the Communiqué, Category 1 companies are required to comply with all mandatory Corporate Governance Principles while Category 2 and Category 3 companies may benefit from certain exemptions. The principles of corporate governance that was published by Capital Market Board of Turkey in 2003 aimed to contribute all joint stock companies in the private and public sector. Compliance to the principles was not compulsory. Communiqué Serial: IV, No: 56 was published with the aim to expand the application of corporate governance principles and to oblige the public joint stock companies comply with the principles. Through this Communiqué, one step forward was taken regarding the approach of “comply or explain” that has been adopted by Capital Market Board of Turkey since 2003 about corporate governance. The provisions of Communiqué Serial: IV, No: 56 are valid for Istanbul Stock Exchange (ISE) Companies (excluding listed banks) from the date of publication of the Communiqué on 30.12.2011. For listed banks, Communiqué will be effective on 30.12.2012. 208 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Two major legislations comprise the legal framework of the Turkish capital markets; Capital Markets Law (CML) and Turkish Commercial Code. Turkish Commercial Code basically governs commercial relationships and establishment and governance of companies. On February 14, 2011 the new Turkish Commercial Code was published in the official gazette and came into force on July 1, 2012. In the European Union (EU) integration process of Turkey, the code mainly aims to harmonize the Turkish Commercial Code with European legislation system. Provisions set forth in the Turkish Commercial Code aims to regulate commercial relations in accordance with the recent changes in the local and global business environment. The Code concerns social responsibility of the companies and take corporate ethical standards into consideration. The corporate governance approach of the Code is based on four pillars: transparency, fairness, accountability and responsibility. The Code accepts the single shareholder joint stock company and single member partner limited liability company. The Code allows the board meetings and general assembly meetings to be held in electronic media. The Board of Directors is responsible for the preparation of the financial statements in conformity with the Turkish Financial Reporting Standards which are identical with International Financial Reporting Standards (IFRS). The audit is required to be performed in accordance with Turkish Auditing Standards which are identical with International Auditing Standards (ISAs). Furthermore, the Code allows the application of special audits on the request of any shareholder. 3. RESEARCH METHODOLOGY AND FINDINGS With the aim of analyzing development in corporate governance practices, corporate governance rating reports of ISE Corporate Governance Index Companies were examined for the years between 2007 and 2012. The study covers seven companies for 2007, 12 companies for 2008, 24 companies for 2009, 31 companies for 2010, 38 companies for 2011 and 44 companies for 2012. The list of ISE corporate governance index companies and their corporate governance ratings for the years between 2007 and 2012 are listed in Appendix I. In appendix I, ratings for each section of corporate governance principles are given along with the overall corporate governance grades. Corporate governance ratings between the years of 2007 and 2012 demonstrate the degree of compliance with CMB’s Corporate Goverance Principles released in 2003 and revised in 2005. Rating Institutions has revised their rating methodology for corporate governance ratings issued on or after December 31,2012. After December 31, 2012 corporate governance ratings are going to be determined on the basis of both Corporate Governance Principles and the Communiqué Serial: IV, No: 56. As a result, this study includes corporate governance ratings merely based on corporate governance principles. Corporate governance ratings are granted out of 10. Rating scale and the explanation of each rating are given in Appendix II. Like Corporate Governance Principles, corporate governance rating reports include 4 main sections namely Shareholders, Public Disclosure and Transparency, Stakeholders and Board of Directors. In compliance with the CMB’s directive, rating institutions use weights for each main section to reach an overall Corporate Governance Rating. The weights are as follows: Shareholders 25%, Disclosure and Transparency 35%, Stakeholders: 15%, Board of Directors 25%. In the remaining part of the paper, each section will be analyzed in detail. For each section, initially corporate governance principles will be summarized, the weaknesses and strengthnesses of 209 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo companies until 2009 will be explained and then the improvements in corporate governance practices after 2009 will be analyzed. 3.1.Shareholders The first section of the CMB Corporate Governance Principles concerns the protection of shareholders’ rights. The Principles list some basic rights of shareholders including; obtaining accurate information, actively participating in the general shareholders’ meeting, voting rights, minority and dividend rights, and equal treatment. Under Principles, “Shareholders Relations Department” should be established to enhance relations between shareholders and the company. Except trade secrets, all information required to exercise shareholder’s rights should be available to all shareholders and there should not be any discrimination among them. Shareholders should have right to request a special auditor to be appointed. Shareholders section of principles covers the process of preparation for the general shareholders’ meeting, its conduct and publication of the results. In this context, in order to assure a high participation, general shareholders’ meeting should be announced at least three weeks in advance. Invitation should include date, time, location and agenda of the meeting along with all necessary informative documents. During the meeting, shareholders should have equal opportunities to declare their opinions especially regarding remuneration policy for board members and executives. Once one owns a share, the right to vote is automatically granted. Privileges regarding voting rights should be avoided and a shareholder may have right to vote by use of a proxy who is a shareholder or not. The cumulative voting procedure should be adopted with the purpose of protecting minority rights. Moreover, company’s dividend policy should be defined clearly in the annual report and it should be announced at the general shareholders’ meeting. Figure 1 shows the ISE Corporate Governance Index companies’ average ratings for shareholder sections between 2007 and 2012. Figure 1 Average Ratings for Shareholders Section Shareholders 10 8 7.9 8.05 8.15 8.22 8.31 8.47 2007 2008 2009 2010 2011 2012 6 4 2 0 3.1.1. Strengthnesses and Weaknesses of Companies Until 2009 After examining shareholders sections of corporate governance rating reports, following strengtnesses and weaknesses were identified.Even though some of the companies do not have Corporate Governance Committee, Shareholders Relations Departments have been established by almost all companies. For the companies which have Corporate Governance 210 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Committee within the board, the activities of the Shareholders Relations Department are performed under the supervision of Corporate Governance Committee. General Shareholders’ Meetings are held in accordance with the articles of associations and related legislation. With regard to facilitating shareholder rights, all necessary information and documentation are available for and easily accessible by the shareholders. In compliance with corporate governance principles, a substantial number of companies do not have provisions to apply ceiling limit to shareholders’ number of votes. Shareholders generally have right to exercise proxy voting and proxy forms are duly disclose for those who are not able to participate in the general shareholders meeting in person. A vast number of companies have a clearly defined dividend policy which is announced to the shareholders at the general shareholders meeting and also included in the company’s annual report. As a result of rating institutions’ review of the articles of associations of the companies, the minutes of the general shareholders meetings, and the interview with company officials, institutions have observed that equal treatment of shareholders are prominently pervasive among Turkish companies. However, there are some prominent areas that need further improvements to protect the rights of minority shareholders. Almost all companies do not have provision that allows shareholders the right to request from the general shareholder meeting the appointment of a special auditor for the examination and clarification of a specific material situation. Likewise, almost all companies do not have cumulative voting procedure. Additionally, some companies have voting privileges for preferred stocks. The strengthnesses and weaknesses of companies regarding shareholder section are summarized below: Table 2 Shareholders Successful Implementation Shareholders relations department General shareholders meeting No ceiling limits applied on the number of votes Shareholders generally have right to exercise proxy voting No provisions to impede the transfer of shares Dividend policies are established and publicly disclosed Equal treatment of shareholders The Issues Should Be Improved Corporate governance committee within the board Voting privileges Deficiencies Right to request appointment of special auditors from the general shareholders meeting Lack of cumulative voting procedures 3.1.2. Improvements and Ongoing Weaknesses after 2009 The most prominent development after 2009 is related to establishment of committees. It is observed that almost all companies has established a corporate governance committee within the board. It is also observed that almost all company’s corporate governance committee chair is an independent member. Voting privilege is still exist for some companies. For example, a company has voting privileges for the nomination of candidates for board membership in the articles of association and another company has some 211 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo privilages for preferred stocks. In conclusion, it is observed that voting privilage is one of the areas that still needs improvements. Even years have passed after the issuance of corporate governance principles, there is no improvement regarding right to request appointment of special auditors and cumulative voting procedures. A vast number of companies do not have provision in the articles of association which allow shareholders to have the right to request appointment of special auditors from the general shareholder meeting. Additionally, it is examined that almost none of the companies apply cumulative voting procedure. 3.2.Public Disclosure and Transparency The principle of public disclosure and transparency is aimed at presentation of timely, accurate, comprehensible, analyzable, highly accessible and available information to shareholders and stakeholders. Under this section, companies should establish information policy and disclose it to the public. Two executives should be assigned to sign official documents related to public disclosures. All information related to company should be disclosed accurate, complete, comprehensible and easily accessible. According to principles, key areas that should be disclosed to public are: any developments that may affect the value of the company’s capital market instruments, the dividend policy of companies, ethical rules of companies, and projected financial statements. Additionally, a company which is listed on foreign securities exchange should simultaneously disclose the information in Turkey that is disclosed abroad. Whenever shareholding or voting right percentage of an individual or group reaches, exceeds or fall below the thresholds of 5%, 10%, 25%, 33%, 50%, and 66,67% of total share capital or voting rights, a company should disclose such information. Moreover, the company’s ultimate controlling individual shareholder or shareholders should be disclosed to the public, as identified after being released from indirect or cross ownership relations between co-owners. The company’s capital structure should be presented in a table format that would include the names of the ultimate controlling individual shareholders’ amount and proportion of their shares. Board members, executives and shareholders who directly or indirectly own 5% of the company’s capital should disclose all transactions performed on the company’s capital market instruments and all information about the purchase and sales of capital market instruments of other group companies or any other company with whom the company maintains a material commercial relationship. Furthermore, commercial and non-commercial transactions between the company and companies, where board members, executives and shareholders, who either directly or indirectly own at least 5% of the company’s capital, possess at least 5% and more of shareholding are disclosed to public. Annual reports should cover all kinds of information regarding company’s activities. Periodical financial statements and footnotes, all forms of incentives that is designed to grant shares to employees, information about the sector in which company operates, board of directors’ and audit firm’s opinion about the internal control system should be disclosed to public in an annual report. Board of directors can appoint an audit firm for a maximum period of 5 years. Only after two accounting periods following the audit firm rotation, the company can appoint the same audit firm. Audit firms and auditors are prohibited to provide consultancy services to the companies to which they provide external audit services within the same period. A consultancy firm, which has a parent audit firm, cannot provide consultancy services to the company that the parent audit firms provides external audit services to within the same period. Lastly, list of names that may possess price sensitive 212 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo information should be disclosed to public. Public Disclosure and Transparency Sections’ average ratings are shown in Figure 2. Figure 2 Average Ratings for Public Disclosure and Transparency Section Public Disclosure and Transparency 10 8.44 8.60 8.79 9.01 9.08 9.16 2007 2008 2009 2010 2011 2012 8 6 4 2 0 3.2.1. Strengthnesses and Weaknesses of Companies until 2009 As a result of examining Public Disclosure and Transparency sections of rating reports, following comments concluded for ISE Corporate Governance Index companies. Companies utilize a website as an effective tool in public disclosure. All companies listed on Corporate Governance Index have an easily accessible websites and it is observed that increasing number of companies is in effort to improve the content of their websites. While Turkish versions of websites are comprehensive enough, English versions are generally in improvement progress in terms of content and disclosure for foreign investors. Another developing area is information policy. It is observed that before 2009, many companies did not have any written information policy, on the other hand according to 2009 rating reports; almost all companies have established a collective set of written principles and an information policy to be used in public disclosure. The information or disclosure policy aim at providing shareholders, stakeholders and the public timely, complete and accurate information in line with the CMB corporate governance principles. The disclosure policy covers scope, forms, frequency and methods of disclosure, informs about the company’s authorized persons regarding public disclosure, and outlines how the company deals with investors. English and Turkish version of comprehensive annual reports are disclosed on website of companies. Periodical financial statements and annual reports are signed by the responsible board members and executives indicating that the current periodical financial statements completely reflect the true financial status of the company. Periodical financial statements and footnotes are prepared in line with CMB legislation and international accounting standards and applied accounting policies are included in the footnotes of the financial statements. On the other hand, forward looking information such as projected financial statements is very rare in annual reports. Overall, annual reports are comprehensive in terms of content and information relevant to investors. Nevertheless, there are still some areas that need further improvement. The Corporate Governance Compliance Reports regarding the implementation of the principles are included in the annual reports. However, most of the companies don’t explain the reasons of lacking implementation in their Corporate Governance Compliance Reports. Most of the 213 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo companies have established ethical rules and they are disclosed in the form of a Code of Ethics. A list of the names of insiders is disclosed in annual reports. However, in order to prevent insider trading, companies should try to enforce necessary measures and establish policy for insider trading that provides some information on the matter like definitions, implementation, responsibilities and penalties for violators. All of the companies that are examined in this study are publicly held companies. By CMB legislation, companies have to notify ISE about every kind of developments which will considerably influence the company. All of the companies comply with CMB and ISE legislations in disclosure process regarding important events and developments. All companies duly disclose any significant changes in the management and capital structure of the company, change in core operations of the company, and any kind of information that would affect the profitability of company in the “disclosure of special events” published by the Istanbul Stock Exchange (ISE). Major deficiencies regarding this section are the facts that; most of the companies’ ultimate controlling individual shareholders are not disclosed to public and remuneration of executives generally do not exist in annual reports. Moreover, most of the companies’ capital structure is not presented in a table format that would include the names of the ultimate controlling individual shareholders names, amount and proportion of their share. Under principles, in case shareholding or voting right percentage of an individual reaches, exceeds or falls below the thresholds of total share capital or voting rights, companies should disclose information to public. However, according to investigation of rating institutions, almost all companies’ officials have declared that there is no transaction in this respect. As a result of rating institutions’ examining the auditor contract and having interview with corporate officials and responsible independent auditor, they have reached a conclusion on auditors’ independence. The independent auditors’ reports confirm that the financial statements present fairly the financial position and annual performance of the company in accordance with the financial reporting standards issued by the CMB. Table 3 Public Disclosure and Transparency Successful Implementation Comprehensive and easily accessible websites Written information policy Comprehensive annual reports Periodical financial statements comply with rules and regulations Insider lists are published Disclosure about developments that may affect the value of the company Code of ethics The Issues Should Be Improved English version of websites Deficiencies Corporate Governance Compliance Report does not include reasons of lacking implementation Forward looking information in annual reports Remuneration of executives are not disclosed to public List of ultimate controlling individual shareholders Measures and precautions to prevent insider trading. 214 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo 3.2.2. Improvements and Ongoing Weaknesses after 2009 There is a considerable improvement in establishing an English version of web sites. Almost all companies has established an English version of websites that contain all relevant information in English. Moreover, some companies have restructured corporate web site to provide richer content for investors. Whereas there is an improvement in respect to declaration of reasons for non application of some of the Corporate Governance Principles, there are still some companies that insist on not to disclose the reasons of noncompliance. A visible improvement can be observed in presentation of ultimate controlling individuals. Majority of the companies has begun to disclose ultimate controlling individual shareholders. However such area still needs improvement because the list of ultimate controlling individual shareholders are still not included in some companies’ annual reports. Similarly, in comparison to 2009 there is an improvement in disclosing remuneration of executives, however this is another area that needs more improvement. Some companies’ annual reports involve the management’s evaluation of forward looking information that includes estimates, expectations and strategic priorities of the company. Nonetheless, most of the companies still do not disclose future forecasts of financial information. All of the companies disclose the list of insider traders however by 2012 very few of them has taken measures to prevent insiders. 3.3.Stakeholders This section of CMB Corporate Governance Principles covers the company’s basic policies towards stakeholders. Under this section, the corporate governance framework of the company should recognize the rights of stakeholders established by laws or through any other mutual agreement. In case of the rights of the stakeholders are not regulated by a legislation, the company should preserve the interest of stakeholders. Stakeholders should be informed about company’s policies and procedures, which aim to protect stakeholders’ rights. Company should overcome any conflicts between the company and its stakeholders. Stakeholders should be able to freely communicate their concerns about any illegal or unethical practices to the board. The company should establish mechanisms to encourage participation of the stakeholders in the management of the company. Board of directors and executives should not take actions that would cause the company assets lose value. The company should adopt written employment policies that would provide equal opportunities to individuals who have similar specifications. The company should conduct regular informative meetings with employees and employees should be informed any significant development or decision taken by the company that clearly affects them. The opinions of the trade union regarding the rights of the employees should be taken into account. The company should adhere to quality standards in production. Ethical rules should be established, submitted to the general shareholders’ meeting and disclosed to the public. The company should encourage social responsibility projects that cover subjects such as education, health and environment. Average ratings for stakeholders section for the years 2007, 2008 and 2009 are shown in Figure 4. 215 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Figure 3 Average Ratings for Stakeholders Section Stakeholders 10 8.04 8.64 8.88 8.85 9.01 9.06 2008 2009 2010 2011 2012 8 6 4 2 0 2007 3.3.1. Strengthnesses and Weaknesses of Companies until 2009 As a result of overviewing Stakeholders sections of rating reports, comments are summarized as follows. With regard to relations between companies and stakeholders, none of the companies have experienced infringements regarding the stakeholders’ rights that are protected by legislation and contracts. Protection of stakeholders’ rights is facilitated by all companies. However, majority of the companies do not have any provisions in the articles of associations for the company promoting the participation of stakeholders in the management of the company. Thus, stakeholders do not take part in management. Stakeholders are informed of the company policies and procedures most commonly via web sites. For many companies, the communication between the company and the suppliers is kept through annual communication meetings. Companies also take into consideration customer satisfaction and Customer Communications Centers are responsible for dealing with customers’ problems. Most of the companies have strict quality standards for production systems. TS_EN ISO 9001 certificates prove that quality management systems have been implementing within companies. In production processes, companies are sensitive to use less polluting materials, reduce waste and recycle. They also generally make considerable contribution to the other areas of social responsibility such as education and social health. Companies provide information on their social responsibility activities within their annual reports as well as on their web sites. While almost all companies have written code of ethics that was approved by board, some of them still have not submitted to general shareholders’ meeting. Companies have written Human Resources’ Policy which regulates staff training, performance evaluation and other relevant subjects. Companies provide equal opportunities and treatment to individuals who have similar specifications. On the other side, employees’ participation to management is an area that should be improved for many companies. Trade unions take active part in many companies. 216 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Table 4 Stakeholders Successful Implementation No infringements regarding the stakeholders’ rights Effective human resources policy Wide range of social responsibility projects Comprehensive codes of ethics Quality standards in company products and services Relations with customers and suppliers The Issues Should Be Improved Employees participation to management Deficiencies No provision in the articles of associations regarding the participation of stakeholders in the management 3.3.2. Improvements and Ongoing Weaknesses after 2009 During the examination of stakeholders sections of corporate governance reports, it is observed that employees and stakeholders participation to management still needs a significant improvement. Most of the companies do not have provision in the articles of association regarding the participation of stakeholders in the management of the company. However some of the companies declared that there are certain implementations or some actions in place. The reason of the increase in the average rating of stakeholders section is mainly because of the improvements in other areas such as social responsibility projects, codes of ethics or relations with customers and suppliers. 3.4.Board of Directors Under the fourth section of CMB Principles, the mission and vision of the company should be established and disclosed to public. With respect to the company’s mission and vision, the board of the directors acts as the main responsible body for the company’s goals. The board of the directors’ responsibilities and duties should be defined in the articles of association and annual reports of the companies. Board members should be qualified and proficient about the management of the company. They should be eligible in terms of background and work history. Board of the directors comprises of both executive and non-executive members. Board chairman and chief executive officer should not be the same person and majority of the board of directors should consist of non-executive members. The board also should comprise independent members. At least one third of the board of directors and in any case two members of the board should be independent. A person who has been a member of the company’s board of directors for seven years cannot be appointed as an independent member to the board of directors. With respect to election of the board of directors, cumulative voting procedure should be adopted. Compensation of board members should be determined at general shareholders’ meeting. Incentive remunerations of board of directors should be based on performance of both board members and company. Audit committee and corporate governance committee along with other necessary committees should be formed. Chairman for each committee should be elected among independent members of board. Each committee should comprise of at least two members and if there 217 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo are two members, both of them should be non-executive members. If there are more than two members, the majority of committee members should be non-executive members. Additionally, board members cannot be assigned to more than two committees. An audit committee oversees the financial and operational activities of the company and should convene at least once in three months. Corporate governance committee should be in charge of monitoring corporate governance practices compliance with Principles. The majority of the corporate governance committee should comprise of independent members and the chief executive officer/general director should not be a member of this committee. Board members should devote sufficient time for company’s business and they should be jointly liable for the damage caused by their insufficient performance on their duties assigned to them by legislation, the articles of association and the general shareholders’ meeting. Board members are responsible for preparing financial statements and establishing internal control and risk management mechanisms within the company. The chief executive officer/general manager, the managing director or the head of the relevant department responsible for the preparation of financial statements should sign a written official declaration that covers items such as; carefully examination of financial statements and annual reports, no misleading statements or lack of information in financial statements and reflecting the truth about the company’s financial situation and operations in financial statements. Some of the other duties of board of directors are; approving annual budgets, business plans of company and remuneration of executives, determining ethical rules, information policies, policies of shareholders and stakeholders and controlling the company’s expenditures that exceed 10% of total assets. In case of opposition of an independent board member in a particular issue at the board meeting, dissenting vote should be disclosed to public. Board of director section’s average ratings for Corporate Governance Index Companies is graphed below. Figure 4 Average Ratings for Board of Director Section Board of Director 10.00 8.00 7.00 7.07 6.92 7.13 7.27 2007 2008 2009 2010 2011 8.15 6.00 4.00 2.00 0.00 2012 3.4.1. Strengthnesses and Weaknesses of Companies until 2009 Boards of directors have the highest level power to take decisions, to designate strategies and to represent the company. Within this framework, the mission, vision and strategic targets of ISE Corporate Governance Index companies have been established by boards of directors and are disclosed to public. Overall, the boards of directors fulfill their duties with due diligence and meets their responsibilities. Board meetings are conducted in an efficient and sound manner. In case of dissenting votes the dissenting board members are 218 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo urged to indicate the reasons in the minutes. Executives are to attend meetings whenever necessary and requested. However, some companies’ board of the directors still does not have sufficient independent members. Nonetheless, companies that have independent member in board generally do not comply with the one-third proportion of independent directors recommended by the CMB principles. Duties of board members are clearly described in articles of association and annual reports. Boards are staffed by highly qualified and managerially skillful members. However, before commencing work, board members’ written declarations that they will comply with the legislation, articles of associations and in house regulations are not practicing in companies. Furthermore, there is also no declaration regarding the fact that in case of incompliance members of board would be jointly liable to compensate the losses. Within Corporate Governance Index companies generally two committees have been set up to support the work of the board; Audit Committee and Corporate Governance Committee. Almost all companies have audit committee that oversees all internal and external audit activities. However, there is still considerable number of companies need to form Corporate Governance Committee. Additionally, since independent member of board is a prominent deficiency of companies, chairmen of committees are another subject that needs to be improved. The work of existing committees is closely related to the board. Committee meeting minutes and special reports are reported to the boards. The remuneration policy could be further improved in order to comply with the CMB principles. Compensation is determined by general shareholders meeting and it is solely composed of a fixed salary. Generally, there are no additional attendance or committee membership fees. Table 5 Board of Directors Successful Implementation Vision, mission and strategic goals are clearly defined The board is staffed with effective and highly qualified members Executives are qualified and experienced The Issues Should Be Improved Separate the Board Chairman and the General Manager/CEO positions Corporate Governance Committee Independent member in the Board of Directors Deficiencies The cumulative voting system is not applied No written declaration regarding executives’ joint liability for company’s losses caused by a violation of their duties The stakeholders do not have the right to call for a meeting of Board of Directors No performance based incentive remunerations 3.4.2. Improvements and Ongoing Weaknesses after 2009 After 2009 tremendous improvement was observed regarding increasing number of independent board members and establishment of new committees. During the examination of corporate governance rating reports it is observed that almost all companies have established corporate governance committees. Further, almost all corporate governance committees has chaired by independent members. Almost all companies has an audit committee that is formed entirely by indepent board members. Generally, all 219 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo members of the audit committee and the majority of the members of the corporate governance committee are non-executive board members. Along with corporate governance and audit committee majority of companies have established risk management committee. While there is a considerable increase in the compliance degree of committee and independent member requirements, there is slight improvement concerning other weaknesses. It is generally observed that cumulative voting system still is not being applied by companies. Moreover, generally companies do not have written declaration regarding executives’ joint liability for company’s losses caused by a violation of their duties. Additionally, for majority of companies stakeholders do not have right to call for a meeting of Board of Directors. Also, it is observed that only some of the companies utilize performance based incentive remunerations. To sum up, such areas still need improvements for the companies listed in ISE Corporate Governance Index. CONCLUDING REMARKS Istanbul Stock Exchange (ISE) Corporate Governance Index has been active since August 31, 2007. Year by year, number of companies in this index has been increasing drastically. A review of corporate governance rating reports demonstrates that the average of overall corporate governance ratings is well above 7 which is the threshold for ISE Corporate Governance Index. It is observed that overall corporate governance ratings have been gradually increasing year by year. In order to summarize the improvement of corporate governance practices in Turkey, average overall grades for the years between 2007 and 2012 are shown in Figure 5. ISE Corporate Governance Index Companies’ Average Overall Ratings Figure 5 Overall Ratings 10 8 7.89 8.11 8.18 8.32 8.44 8.73 2007 2008 2009 2010 2011 2012 6 4 2 0 Further examination of each section reveals the weaknesses and strengthnesses of companies. According to this examination it is observed that while shareholders, public disclosure and transparency and stakeholders sections’ grades have increased gradually, there were slight improvement in board of directors’ section until 2011. The sharp increase in the average ratings of board of directors section might be due to the enforcement of Communiqué Serial : IV, No:56. Because, under this Communiqué all members of audit committee and the chairmen of other committee’s must be selected from independent board members. Figure 6 Ratings for the Years Between 2007 and 2012 220 �8.47 9.16 9.06 8.15 8.31 9.08 9.01 7.27 8.22 9.01 8.85 7.13 8.15 8.79 8.88 6.92 8.05 8.60 8.64 7.07 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 7.90 8.44 8.04 7.00 International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Shareholders Public Disclosure and Transperancy Stakeholders Board of Directors 2007 2008 2009 2010 2011 2012 Figure 6 depicts the developments in each section from 2007 to 2012. In summary, board of directors is the weakest part with the average 7,00, 7.07, 6.92, 7.13, 7.27, and 8,15 in years 2007, 2008, 2009,2010, 2011, and 2012 respectively. This study includes the analysis of corporate governance practices of Istanbul Stock Exchange Corporate Governance Index Companies. In the future, this study can be expanded by analyzing Istanbul Stock Exchange National 100 Index Companies. Since most of the ISE National 100 Index Companies do not publish corporate governance rating reports, or authors may conduct analysis through developing a corporate governance scorecard. APPENDIX I: Corporate Governance Ratings 221 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Company DOGAN YAYIN HOLDING A.S. HURRIYET GAZETECILIK VE MATBAACILIK A.S. TOFAS TURK OTOMOBIL FABRIKASI A.S. TURK TRAKTOR VE ZIRAAT MAKINELERI A.S. TURKIYE PETROL RAFINERILERI A.S. VESTEL ELEKTRONIK SANAYI VE TICARET A.S. Y VE Y GAYRIMENKUL YATIRIM ORTAKLIGI A.S. ANADOLU EFES BIRACILIK VE MALT SANAYII A.S. ASYA KATILIM BANKASI A.S. DENTAS AMBALAJ VE KAGIT SANAYI A.S. OTOKAR OTOMOTIV VE SAVUNMA SANAYI A.S. YAPI VE KREDI BANKASI A.S. ARCELIK ANONIM SIRKETI COCA-COLA ICECEK A.S. DOGAN SIRKETLER GRUBU HOLDING A.S. IS FINANSAL KIRALAMA A.S. LOGO YAZILIM SANAYI VE TICARET A.S.. PETKIM PETROKIMYA HOLDING. A.S. TURK PRYSMIAN KABLO VE SISTEMLERI A.S. SEKERBANK TURK ANONIM SIRKETI TAV HAVALIMANLARI HOLDING A.S. TURKIYE SINAI KALKINMA BANKASI A.S. TURK TELEKOMUNIKASYON A.S. VAKIF MENKUL KIYMETLER YATIRIM ORT. A.S. TURCAS PETROL A.S. PARK ELEKTRIK URETIM MAD. SAN. VE TIC. A.S. AYGAZ A.S. ALBARAKA TURK KATILIM BANKASI A.S. YAZICILAR HOLDING A.S. IHLAS HOLDING A.S. IHLAS EV ALETLERI IMALAT SAN. VE TIC. A.S. DOGUS OTOMOTIV SERVIS VE TIC. A.S. MENSA SINAI TICARI VE MALI YATIRIMLAR A.S. PINAR SUT MAMULLERI SAN. A.Ş. EGELI & CO YATIRIM HOLDING A.S. TURKIYE HALK BANKASI A.S. IS YATIRIM MENKUL DEGERLER A.S. GLOBAL YATIRIM HOLDING A.S. GARANTI FACTORING HIZMETLERI A.S. ENKA INSAAT VE SAN. A.S. PINAR ENTEGRE ET VE UN SANAYII A.S. BOYNER BUYUK MAGAZACILIK A.S. ASELSAN ELEKTRONIK SANAYI VE TIC. A.S. IS GAYRIMENKUL YATIRIM ORTAKLIGI A.S. AVERAGE 222 Overall Corporate Governance Ratings 2007 2008 2009 2010 2011 2012 8,59 8,76 8,76 8,78 8,88 9,01 7,97 8,32 8,43 8,47 8,55 9,01 7,74 8,16 8,24 8,42 8,58 9,03 7,52 7,83 8,12 8,30 8,50 8,90 7,91 8,34 8,34 8,56 8,62 9,10 7,59 8,26 8,34 8,40 8,59 8,83 7,88 8,16 8,16 8,27 8,56 8,66 8,10 8,27 8,40 8,55 8,94 7,56 7,82 8,17 8,26 8,61 7,82 7,82 8,03 8,06 8,69 7,94 8,12 8,32 8,47 8,68 8,02 8,44 8,79 8,80 8,81 8,21 8,55 8,59 9,11 8,30 8,43 8,50 8,88 8,26 8,42 8,59 9,03 8,02 8,38 8,58 9,03 8,05 8,17 8,26 8,60 7,71 8,19 8,52 8,72 7,76 8,08 8,15 8,44 8,14 8,66 8,76 8,82 8,33 9,04 9,10 9,20 8,77 8,92 9,10 9,11 8,01 8,27 8,87 8,80 7,81 8,23 8,41 8,73 7,52 8,12 8,40 8,65 8,67 8,82 8,46 8,50 8,96 8,14 8,28 8,22 8,04 8,30 8,78 7,71 7,91 8,09 7,12 7,39 7,68 7,71 8,63 7,59 7,75 8,34 8,87 8,20 8,60 8,74 8,77 8,63 8,87 8,36 8,80 8,36 9,16 8,77 8,64 8,77 8,53 7,89 8,11 8,18 8,32 8,44 8,73 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Company DOGAN YAYIN HOLDING A.S. HURRIYET GAZETECILIK VE MATBAACILIK A.S. TOFAS TURK OTOMOBIL FABRIKASI A.S. TURK TRAKTOR VE ZIRAAT MAKINELERI A.S. TURKIYE PETROL RAFINERILERI A.S. VESTEL ELEKTRONIK SANAYI VE TICARET A.S. Y VE Y GAYRIMENKUL YATIRIM ORTAKLIGI A.S. ANADOLU EFES BIRACILIK VE MALT SANAYII A.S. ASYA KATILIM BANKASI A.S. DENTAS AMBALAJ VE KAGIT SANAYI A.S. OTOKAR OTOMOTIV VE SAVUNMA SANAYI A.S. YAPI VE KREDI BANKASI A.S. ARCELIK ANONIM SIRKETI COCA-COLA ICECEK A.S. DOGAN SIRKETLER GRUBU HOLDING A.S. IS FINANSAL KIRALAMA A.S. LOGO YAZILIM SANAYI VE TICARET A.S.. PETKIM PETROKIMYA HOLDING. A.S. TURK PRYSMIAN KABLO VE SISTEMLERI A.S. SEKERBANK TURK ANONIM SIRKETI TAV HAVALIMANLARI HOLDING A.S. TURKIYE SINAI KALKINMA BANKASI A.S. TURK TELEKOMUNIKASYON A.S. VAKIF MENKUL KIYMETLER YATIRIM ORT. A.S. TURCAS PETROL A.S. PARK ELEKTRIK URETIM MAD. SAN. VE TIC. A.S. AYGAZ A.S. ALBARAKA TURK KATILIM BANKASI A.S. YAZICILAR HOLDING A.S. IHLAS HOLDING A.S. IHLAS EV ALETLERI IMALAT SAN. VE TIC. A.S. DOGUS OTOMOTIV SERVIS VE TIC. A.S. MENSA SINAI TICARI VE MALI YATIRIMLAR A.S. PINAR SUT MAMULLERI SAN. A.Ş. EGELI & CO YATIRIM HOLDING A.S. TURKIYE HALK BANKASI A.S. IS YATIRIM MENKUL DEGERLER A.S. GLOBAL YATIRIM HOLDING A.S. GARANTI FACTORING HIZMETLERI A.S. ENKA INSAAT VE SAN. A.S. PINAR ENTEGRE ET VE UN SANAYII A.S. BOYNER BUYUK MAGAZACILIK A.S. ASELSAN ELEKTRONIK SANAYI VE TIC. A.S. IS GAYRIMENKUL YATIRIM ORTAKLIGI A.S. AVERAGE 223 2007 8,53 7,89 7,52 7,57 7,73 8,01 8,03 2008 8,88 8,32 7,76 7,76 8,31 8,43 8,27 8,61 7,02 6,16 8,74 8,29 7,90 8,05 Shareholders 2009 2010 8,88 8,88 8,32 8,51 7,73 8,00 7,98 8,00 8,30 8,48 8,47 8,51 8,53 8,67 8,70 8,80 7,24 7,29 8,16 8,40 8,81 8,77 8,56 8,72 8,55 8,87 7,95 8,00 8,55 8,55 8,20 8,22 7,99 8,16 7,21 8,00 8,67 8,88 7,40 8,51 8,10 9,05 8,55 8,77 7,69 7,94 7,03 7,86 7,29 8,68 8,81 7,46 7,98 7,11 5,77 8,15 8,22 2011 9,04 8,69 8,05 8,05 8,50 8,51 8,75 8,82 7,35 8,40 8,91 8,71 8,87 8,03 8,71 8,15 8,21 8,40 8,71 8,54 9,06 8,78 8,07 8,20 8,30 8,68 8,91 7,71 7,99 7,89 6,81 6,86 7,87 8,33 7,94 8,62 8,13 8,23 8,31 2012 8,92 9,16 8,11 8,09 8,77 8,84 8,75 8,85 7,36 8,65 8,95 8,72 8,95 8,11 8,71 8,30 8,49 8,61 8,85 8,63 9,10 8,79 8,07 8,40 8,40 8,76 8,96 7,73 8,02 8,01 7,27 8,33 7,97 8,45 8,09 8,75 8,61 8,35 8,19 8,91 8,14 8,77 8,00 8,66 8,47 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Company DOGAN YAYIN HOLDING A.S. HURRIYET GAZETECILIK VE MATBAACILIK A.S. TOFAS TURK OTOMOBIL FABRIKASI A.S. TURK TRAKTOR VE ZIRAAT MAKINELERI A.S. TURKIYE PETROL RAFINERILERI A.S. VESTEL ELEKTRONIK SANAYI VE TICARET A.S. Y VE Y GAYRIMENKUL YATIRIM ORTAKLIGI A.S. ANADOLU EFES BIRACILIK VE MALT SANAYII A.S. ASYA KATILIM BANKASI A.S. DENTAS AMBALAJ VE KAGIT SANAYI A.S. OTOKAR OTOMOTIV VE SAVUNMA SANAYI A.S. YAPI VE KREDI BANKASI A.S. ARCELIK ANONIM SIRKETI COCA-COLA ICECEK A.S. DOGAN SIRKETLER GRUBU HOLDING A.S. IS FINANSAL KIRALAMA A.S. LOGO YAZILIM SANAYI VE TICARET A.S.. PETKIM PETROKIMYA HOLDING. A.S. TURK PRYSMIAN KABLO VE SISTEMLERI A.S. SEKERBANK TURK ANONIM SIRKETI TAV HAVALIMANLARI HOLDING A.S. TURKIYE SINAI KALKINMA BANKASI A.S. TURK TELEKOMUNIKASYON A.S. VAKIF MENKUL KIYMETLER YATIRIM ORT. A.S. TURCAS PETROL A.S. PARK ELEKTRIK URETIM MAD. SAN. VE TIC. A.S. AYGAZ A.S. ALBARAKA TURK KATILIM BANKASI A.S. YAZICILAR HOLDING A.S. IHLAS HOLDING A.S. IHLAS EV ALETLERI IMALAT SAN. VE TIC. A.S. DOGUS OTOMOTIV SERVIS VE TIC. A.S. MENSA SINAI TICARI VE MALI YATIRIMLAR A.S. PINAR SUT MAMULLERI SAN. A.Ş. EGELI & CO YATIRIM HOLDING A.S. TURKIYE HALK BANKASI A.S. IS YATIRIM MENKUL DEGERLER A.S. GLOBAL YATIRIM HOLDING A.S. GARANTI FACTORING HIZMETLERI A.S. ENKA INSAAT VE SAN. A.S. PINAR ENTEGRE ET VE UN SANAYII A.S. BOYNER BUYUK MAGAZACILIK A.S. ASELSAN ELEKTRONIK SANAYI VE TIC. A.S. IS GAYRIMENKUL YATIRIM ORTAKLIGI A.S. AVERAGE 224 Public Disclosure and Transparency 2007 2008 2009 2010 2011 2012 9,60 9,68 9,68 9,73 9,82 9,82 8,71 9,11 9,13 9,16 9,19 9,39 8,27 9,05 9,26 9,21 9,22 9,15 7,91 8,56 8,84 9,02 9,09 9,08 8,83 8,98 8,98 9,12 9,22 9,22 7,56 8,16 8,33 8,37 8,53 8,80 8,18 8,74 8,76 8,98 9,48 9,40 8,47 8,70 8,96 9,27 9,36 7,33 7,94 8,72 8,91 9,61 8,72 8,71 8,93 8,94 9,04 8,27 8,48 8,95 8,95 8,95 8,11 8,83 9,17 9,25 9,26 8,71 9,22 9,30 9,34 9,21 9,35 9,53 9,54 9,21 9,47 9,41 9,41 8,51 9,23 9,50 9,54 8,54 8,62 8,70 8,81 8,81 9,04 9,36 9,33 7,87 8,61 8,73 8,59 8,70 8,90 8,94 8,95 8,69 9,26 9,34 9,63 9,31 9,36 9,79 9,79 8,98 9,22 9,31 9,33 8,86 8,78 8,83 9,04 8,78 8,83 9,04 9,44 9,47 9,48 9,05 9,07 9,13 9,04 9,04 9,01 8,79 9,30 9,31 8,59 8,75 8,80 8,11 8,04 8,05 8,82 8,83 8,28 8,51 9,06 9,05 8,31 8,85 9,54 9,53 9,12 9,28 8,81 9,31 8,67 9,60 9,00 9,19 9,35 8,89 8,44 8,60 8,79 9,01 9,08 9,16 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Company DOGAN YAYIN HOLDING A.S. HURRIYET GAZETECILIK VE MATBAACILIK A.S. TOFAS TURK OTOMOBIL FABRIKASI A.S. TURK TRAKTOR VE ZIRAAT MAKINELERI A.S. TURKIYE PETROL RAFINERILERI A.S. VESTEL ELEKTRONIK SANAYI VE TICARET A.S. Y VE Y GAYRIMENKUL YATIRIM ORTAKLIGI A.S. ANADOLU EFES BIRACILIK VE MALT SANAYII A.S. ASYA KATILIM BANKASI A.S. DENTAS AMBALAJ VE KAGIT SANAYI A.S. OTOKAR OTOMOTIV VE SAVUNMA SANAYI A.S. YAPI VE KREDI BANKASI A.S. ARCELIK ANONIM SIRKETI COCA-COLA ICECEK A.S. DOGAN SIRKETLER GRUBU HOLDING A.S. IS FINANSAL KIRALAMA A.S. LOGO YAZILIM SANAYI VE TICARET A.S.. PETKIM PETROKIMYA HOLDING. A.S. TURK PRYSMIAN KABLO VE SISTEMLERI A.S. SEKERBANK TURK ANONIM SIRKETI TAV HAVALIMANLARI HOLDING A.S. TURKIYE SINAI KALKINMA BANKASI A.S. TURK TELEKOMUNIKASYON A.S. VAKIF MENKUL KIYMETLER YATIRIM ORT. A.S. TURCAS PETROL A.S. PARK ELEKTRIK URETIM MAD. SAN. VE TIC. A.S. AYGAZ A.S. ALBARAKA TURK KATILIM BANKASI A.S. YAZICILAR HOLDING A.S. IHLAS HOLDING A.S. IHLAS EV ALETLERI IMALAT SAN. VE TIC. A.S. DOGUS OTOMOTIV SERVIS VE TIC. A.S. MENSA SINAI TICARI VE MALI YATIRIMLAR A.S. PINAR SUT MAMULLERI SAN. A.Ş. EGELI & CO YATIRIM HOLDING A.S. TURKIYE HALK BANKASI A.S. IS YATIRIM MENKUL DEGERLER A.S. GLOBAL YATIRIM HOLDING A.S. GARANTI FACTORING HIZMETLERI A.S. ENKA INSAAT VE SAN. A.S. PINAR ENTEGRE ET VE UN SANAYII A.S. BOYNER BUYUK MAGAZACILIK A.S. ASELSAN ELEKTRONIK SANAYI VE TIC. A.S. IS GAYRIMENKUL YATIRIM ORTAKLIGI A.S. AVERAGE 225 Stakeholders 2007 2008 2009 2010 7,63 7,82 7,82 7,82 7,40 7,63 8,32 8,32 9,24 9,40 9,40 9,52 8,87 9,15 9,40 9,52 8,81 9,60 9,60 9,82 7,49 9,13 9,13 9,40 6,86 7,18 7,18 7,18 8,80 9,13 9,21 9,15 9,15 9,51 7,70 7,69 7,99 8,63 9,17 9,24 9,50 9,50 9,67 9,52 9,52 9,21 9,64 8,90 8,90 8,87 8,87 8,51 8,92 8,83 9,27 8,71 8,81 9,23 9,79 8,88 9,54 9,57 9,57 8,72 9,15 8,74 8,33 7,33 8,99 9,05 8,04 9,17 7,54 6,63 8,04 8,64 8,88 8,85 2011 2012 7,92 7,95 8,32 9,11 9,52 9,68 9,76 9,76 9,72 9,72 9,40 9,04 7,91 8,52 9,39 9,39 9,56 9,73 8,17 8,55 9,76 9,76 9,54 9,54 9,52 9,52 9,64 9,64 8,90 8,90 9,30 9,53 9,21 9,31 9,51 9,23 9,29 9,29 9,79 9,91 9,68 9,45 9,73 9,73 9,33 9,33 8,54 9,02 8,78 9,27 8,99 8,99 9,05 9,05 8,10 8,21 9,64 9,64 6,82 6,90 6,83 7,07 8,67 8,97 8,68 8,68 9,17 9,31 9,05 9,05 9,66 9,66 8,24 8,43 9,16 9,29 8,46 8,94 9,23 8,86 8,94 7,91 9,01 9,06 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Company DOGAN YAYIN HOLDING A.S. HURRIYET GAZETECILIK VE MATBAACILIK A.S. TOFAS TURK OTOMOBIL FABRIKASI A.S. TURK TRAKTOR VE ZIRAAT MAKINELERI A.S. TURKIYE PETROL RAFINERILERI A.S. VESTEL ELEKTRONIK SANAYI VE TICARET A.S. Y VE Y GAYRIMENKUL YATIRIM ORTAKLIGI A.S. ANADOLU EFES BIRACILIK VE MALT SANAYII A.S. ASYA KATILIM BANKASI A.S. DENTAS AMBALAJ VE KAGIT SANAYI A.S. OTOKAR OTOMOTIV VE SAVUNMA SANAYI A.S. YAPI VE KREDI BANKASI A.S. ARCELIK ANONIM SIRKETI COCA-COLA ICECEK A.S. DOGAN SIRKETLER GRUBU HOLDING A.S. IS FINANSAL KIRALAMA A.S. LOGO YAZILIM SANAYI VE TICARET A.S.. PETKIM PETROKIMYA HOLDING. A.S. TURK PRYSMIAN KABLO VE SISTEMLERI A.S. SEKERBANK TURK ANONIM SIRKETI TAV HAVALIMANLARI HOLDING A.S. TURKIYE SINAI KALKINMA BANKASI A.S. TURK TELEKOMUNIKASYON A.S. VAKIF MENKUL KIYMETLER YATIRIM ORT. A.S. TURCAS PETROL A.S. PARK ELEKTRIK URETIM MAD. SAN. VE TIC. A.S. AYGAZ A.S. ALBARAKA TURK KATILIM BANKASI A.S. YAZICILAR HOLDING A.S. IHLAS HOLDING A.S. IHLAS EV ALETLERI IMALAT SAN. VE TIC. A.S. DOGUS OTOMOTIV SERVIS VE TIC. A.S. MENSA SINAI TICARI VE MALI YATIRIMLAR A.S. PINAR SUT MAMULLERI SAN. A.Ş. EGELI & CO YATIRIM HOLDING A.S. TURKIYE HALK BANKASI A.S. IS YATIRIM MENKUL DEGERLER A.S. GLOBAL YATIRIM HOLDING A.S. GARANTI FACTORING HIZMETLERI A.S. ENKA INSAAT VE SAN. A.S. PINAR ENTEGRE ET VE UN SANAYII A.S. BOYNER BUYUK MAGAZACILIK A.S. ASELSAN ELEKTRONIK SANAYI VE TIC. A.S. IS GAYRIMENKUL YATIRIM ORTAKLIGI A.S. AVERAGE 226 Board of Directors 2007 2008 2009 2010 2011 2012 7,80 7,93 7,93 7,93 7,96 8,59 7,34 7,63 7,63 7,56 7,68 8,59 6,30 6,57 6,62 7,05 7,67 9,38 6,10 6,10 6,51 6,87 7,38 8,95 6,27 7,73 6,73 7,10 7,24 8,89 7,28 7,69 7,74 7,74 8,27 8,74 7,94 7,81 7,53 7,52 7,46 7,61 6,64 6,71 6,72 6,75 8,17 7,45 7,47 7,46 7,47 7,81 6,30 6,30 6,43 6,43 8,34 6,28 6,31 6,42 6,58 7,38 6,74 7,13 7,74 7,82 7,83 6,37 6,73 6,76 8,69 6,85 6,85 6,83 8,27 6,28 6,53 7,13 7,13 6,66 7,03 7,28 8,76 7,16 7,11 7,13 7,98 6,01 6,54 6,86 7,66 6,12 6,09 6,10 7,32 7,42 7,82 8,10 8,18 7,77 8,40 8,44 8,73 7,76 8,05 8,09 8,10 6,56 6,73 6,79 8,47 6,58 7,79 7,97 8,43 6,11 6,54 6,99 7,29 7,34 7,88 6,93 6,94 8,66 7,62 7,95 7,62 6,39 6,42 8,27 7,17 7,42 7,92 7,36 7,40 7,92 6,62 7,44 5,71 5,89 6,86 8,76 7,79 8,51 7,17 7,20 8,68 8,84 7,39 8,26 8,03 8,92 8,82 7,60 8,64 8,26 7,00 7,07 6,92 7,13 7,27 8,15 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo APPENDIX II: Corporate Governance Rating Scale Rating Explanation 9-10 The company performs very good in terms of Capital Markets Board’s corporate governance principles and has qualified to be included in the ISE’s (Istanbul Stock Exchange) Corporate Governance Index. It has identified and actively managed all significant corporate governance risks through comprehensive internal controls and management systems. The company’s performance is considered to represent best practice, and it had almost no deficiencies in any of the areas rated. 7-8 The company performs good in terms of Capital Markets Board’s corporate governance principles. It has, to varying degrees, identified all its material corporate governance risks and is actively managing the majority of them through internal controls and management systems. During the rating process, minor deficiencies were found in one or two of the areas rated. 6 The company performs fair in terms of Capital Markets Board’s corporate governance principles. It has, to varying degrees, identified the majority of its material corporate governance risks and is beginning to actively manage them. Management accountability is considered in accordance with national standards but may be lagging behind international best practice. During the ratings process, minor deficiencies were identified in more than two of the areas rated. 4-5 The company performs weakly as a result of poor corporate governance policies and practices. The company has, to varying degrees, identified its minimum obligations but does not demonstrate an effective, integrated system of controls for managing related risks. Assurance mechanisms are weak. The rating has identified significant deficiencies in a number (but not the majority) of areas rated. <4 The company performs very weakly and its corporate governance policies and practices are overall very poor. The company shows limited awareness of corporate governance risks, and internal controls are almost non-existent. Significant deficiencies are apparent in the majority of areas rated and have led to significant material loss and investor concern. REFERENCES Akbulak Y. (2011). Türk Sermaye Piyasasında Esaslı Bir Devrim: Kurumsal Yönetim İlkeleri, Mali Cozum, 108, s.111-138. 227 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Akdoğan N. & Akdoğan M. U. (2011). The Comparative Analysis of the Harmony of the Turkish Commercial Code Regulations Related to Corporate Governance Principles with the Corporate Governance Principles Issued by Capital Market Board. Accounting and Auditing Review, 11 (35), 1-31. Akdoğan Y. E. & Boyacıoğlu M. A. (2010). Corporate Governance in Turkey: An Overview. Selçuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, Issue:24, 11-30. Ararat, M. & Ugur, M. (2003). Corporate Governance in Turkey: an overview and some policy recommendations. Corporate Governance, 3 (1), 58-75. Ararat, M. & Yurtoglu, B. (2006). Corporate Governance in Turkey: an Introduction to the Special Issue. Corporate Governance, 4 (4), 201-206. Arsoy, A. P. & Crowther D. (2008). Corporate Governance in Turkey: Reform and Convergence. Social Responsibility Journal, 4 (3), 407-421. Capital Markets Board of Turkey. (2003). Corporate Governance Principles, http://www.cmb.gov.tr/displayfile.aspx?action=displayfile&pageid=84&fn=84.pdf&su bmenuheader=-1 Corporate Governance Association of Turkey, http://www.tkyd.org/en/ Ergin E. (2012). Corporate Governance Ratings and Market Based Financial Performance: Evidence from Turkey. International Journal of Economics and Finance,4 (9), 61-68. Gurbuz, A.O., Aybars, A. & Kutlu, O. (2010). Corporate Governance and Financial Performance with a Perspective on Institutional Ownership: Empirical Evidence from Turkey”, JAMAR, 8 (2), 22-37 Istanbul Stock Exchange, http://www.ise.org/ Mandacı, P.E. & Gumus, G.K. (2010). Ownership Concentration, Managerial Ownership and Firm Performance: Evidence from Turkey. South East European Journal, 5 (1), 57-66. Needles, B. E., Turel A., Sengur E. D. & Turel A. (2012). Corporate Governance in Turkey: Issues and Practices of High Performance Companies. Accounting and Management Information Systems, 11 (4) 510-531. Sakarya Ş. (2011). The Rating Scores of the Enterprises in Scope of the ISE Corporate Governance Index and the Analysis of Relations Between the Stock Returns with the Event Study Method. ZKU Journal of Social Sciences, 7 (13).147-162. Sengur, E. D. (2011). Do corporate Governance Index Companies Outperform Others? Evidence from Turkey. International Journal of Business and Social Sciences, 2 (14), 254-260. Toraman, C. & Abdioğlu H. (2008). Weak and Strong Sides of Companies which are at ISE Yüksel, C. (2008). Recent Developments of Corporate Governance in the Global Economy and the New Turkish Commercial Draft Law Reforms. Journal of International Commercial Law and Technology, 3 (2), 101-111. Turkish Industry & Business Association (TUSIAD). 2002. Corporate Governance Code of Best Practices: Composition and Functioning of the Board of Directors, http://www.tusiad.org/bilgi-merkezi/raporlar/kurumsal-yonetim-en-iyi-uygulamakodu--yonetim-kurulunun-yapisi-ve-isleyisi/ Yüksel, C. (2008). Recent Developments of Corporate Governance in the Global Economy and the New Turkish Commercial Draft Law Reforms. Journal of International Commercial Law and Technology, 3 (2), 101-111. 228 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1534 Title A name given to the resource Improvement of Corporate Governance Practices of İstanbul Stock Exchange (ISE) Corporate Governance Index Companies Author Author DILEK SENGUR, Evren Abstract A summary of the resource. A series of corporate scandals highlighted the corporate governance issue all around the world. Like other countries, Turkey has adopted strong regulatory framework for corporate governance in the last decade. The purpose of this study is to analyze the improvement in corporate governance practices of İstanbul Stock Exchange Corporate Governance Index Companies between the years of 2007 and 2012. With this purpose corporate governance rating reports of companies were examined. Based on the examination of corporate governance rating reports; it is observed that overall corporate governance ratings have been gradually increasing year by year. Further analysis demonstrates that while stakeholders section is the most strength side, board of directors is the weakest part of Corporate Governance Index Companies. Nonetheless, in 2012 a sharp increase in the ratings of board of directors section was observed thanks to enactment of new Commercial Code and enforcement of Communiqué Serial : IV, No:56. Keywords: Corporate Governance, Corporate Governance Index, Corporate Governance Rating, İstanbul Stock Exchange, Capital Market Board of Turkey. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 978-9958-834-23-3 https://omeka.ibu.edu.ba/files/original/2e2769b8a6410ccab0b580c6edd067c3.pdf 1a9056ea80fd426f9950845452d2d659 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Police Officers Are in Burnout Syndrome? : An Applied Research in Nazilli Police Organization Hulusi Doğan Adnan Menderes University, Turkey hulusidogan@gmail.com Hüseyin Gül Adnan Menderes University, Turkey huseyingul@adu.edu.tr Şeker Güven Celal Bayar University, Turkey gdseker@hotmail.com The aim of this study is to give general information about the history of Turkish National Police Organization and to measure police officers’ burnout level by an empirical research in Nazilli Police Organization. In this context, the study includes two parts. The first part examines the history and organization structure of Turkish National Police Organization. The second part includes a research measuring burnout level of police officers working in Nazilli Police Organization. The research (questionnaire) is designed so as to test the following alternative hypotheses: H1: There are differences between police officers’ service unit (narcotic, terror, traffic etc.) and burnout level. H2: There are differences between police officers’ sexuality and burnout level. H3: There are differences between police officers’ vocational experience and burnout level. H4: There are differences between police officers’ marital status and burnout level. H5: There are differences between police officers’ vocational status and burnout level. H6: There are differences between police officers’ educational level and burnout level. 160 �International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Maslach Burnout Inventory (MBI) is used to measure police officers’ burnout level in the study. Maslach Burnout Inventory scale is composed of three dimensions; emotional exhaustion, depersonalization and personal accomplishment. In other words, MBI scale is composed of 22 items; 9 items for emotional exhaustion, 5 items for depersonalization and 8 items for personal accomplishment. The instrument consisted of these 22 (items) questions are answered on a 1-5 likert scales labeled “strongly disagree” (1) and “strongly agree” (5). Additionally, our research questionnaire includes 7 items to determine demographic variables (such as age, sexuality, vocational experience, marital status, service unit, vocational status, education level) of police officers. SPSS 20.0 is used for statistical analysis. T-Test and One Way ANOVA is used to analyze and assess the differences among police officers in terms of their demographic variables. Keywords: Burnout, Police Officers, Emotional Exhaustion. 161 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1628 Title A name given to the resource Police Officers Are in Burnout Syndrome? : An Applied Research in Nazilli Police Organization Author Author DOGAN, Hulusi GUL, Huseyin GUVEN, Seker Abstract A summary of the resource. The aim of this study is to give general information about the history of Turkish National Police Organization and to measure police officers’ burnout level by an empirical research in Nazilli Police Organization. In this context, the study includes two parts. The first part examines the history and organization structure of Turkish National Police Organization. The second part includes a research measuring burnout level of police officers working in Nazilli Police Organization. The research (questionnaire) is designed so as to test the following alternative hypotheses: H1: There are differences between police officers’ service unit (narcotic, terror, traffic etc.) and burnout level. H2: There are differences between police officers’ sexuality and burnout level. H3: There are differences between police officers’ vocational experience and burnout level. H4: There are differences between police officers’ marital status and burnout level. H5: There are differences between police officers’ vocational status and burnout level. H6: There are differences between police officers’ educational level and burnout level. Maslach Burnout Inventory (MBI) is used to measure police officers’ burnout level in the study. Maslach Burnout Inventory scale is composed of three dimensions; emotional exhaustion, depersonalization and personal accomplishment. In other words, MBI scale is composed of 22 items; 9 items for emotional exhaustion, 5 items for depersonalization and 8 items for personal accomplishment. The instrument consisted of these 22 (items) questions are answered on a 1-5 likert scales labeled “strongly disagree” (1) and “strongly agree” (5). Additionally, our research questionnaire includes 7 items to determine demographic variables (such as age, sexuality, vocational experience, marital status, service unit, vocational status, education level) of police officers. SPSS 20.0 is used for statistical analysis. T-Test and One Way ANOVA is used to analyze and assess the differences among police officers in terms of their demographic variables. Keywords: Burnout, Police Officers, Emotional Exhaustion. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564 https://omeka.ibu.edu.ba/files/original/9975da5dd50c1758b6b8d007ce6c8b4f.pdf ba09544240a8434da8a0606d89bb8a01 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo The Effect of Degree of CEO Turnover on Firm Performance in High-tech vs. Low-tech Firms: Evidence from Turkey Mesut Doğan Afyon Kocatepe University, Afyon, Turkey mesutdogan@aku.edu.tr Veysel Ağca Afyon Kocatepe University, Afyon, Turkey agca@aku.edu.tr The main responsibility of Chief Executive Officer (CEO) is to form and implement strategic goals, policies and plans of the firms. Researchers showed that the change of CEO who is on the top position of the organization has positive or negative impacts on firm performance. The decision of CEO’s change and who will be the new CEO is an extremely important issue especially for the firms. The change of CEO in the firms is carried out in two ways. The first is an external mandatory change occurred as a result of deterioration of their financial performance due to economic crisis, intense competition and other compelling reasons. In this case, there are performance improvements expectations by changing the CEO with identified a new and better strategies. The second is an internal voluntary change that occurs when the CEO resigns because of better career expectations and opportunities. In this case, board of directors often selects a new CEO from among the members of the board of the directors who knows well firm’s current valid long-term strategies goals, policies and strategies. As result of this change, the new CEO does not major changes in the firm. Thus, firms generally do not face a bad performance. In the literature, It is not yet seen any study which measures the impact of the degree of CEO turnover on the firm performance in Turkey. In the international literature, factors that determine the rate of CEO turnover have not been examined by differentiating the high-tech and low-tech firms yet. In this study, it is primarily aimed to determine the effect of the CEO turnover rate on the firm financial performance in the 175 firms registered and traded in the İstanbul Stock Exchange (ISE) between the years 2005-2011. It is secondly aimed to find out if there are differences in terms of the affects of CEO turnover rate on financial performance in the 203 �International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo high-tech and low-tech firms. The degree of CEO turnover is used as the dependent variable in this study. On the other hand, Return on Assets (ROA) Return on Equity (ROE) and Tobin’s q(Q) are used as performance indicators or measures. Other independent variables are firms’ sales, total assets, leverage ratio and liquidity level. Hypotheses developed will be tested by analysis examining the interactions between the degree of CEO turnover and financial performance indicators, leverage and liquidity ratios. In addition, factors that effect CEO turnover rate will be determined in the high-tech and low-tech firms and then similarities and differences among these firms will be exposed. Keywords: Firm Performance, Ceo Turnover, Turkey, ROA, ROE. 204 � https://omeka.ibu.edu.ba/files/original/b0228ef0ec1e53070ef3f6c5165f0092.docx 181994979cbc6e582161fb60fe12288f https://omeka.ibu.edu.ba/files/original/5a0147bcdc31bea3cf72733478030fef.pdf eb6c1ced978b9a6d13616bf8da671fda PDF Text Text International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo The Effects of CEO Turnover on Firm Performance in High-Tech vs. LowTech Firms: Evidence from Turkey Mesut Doğan Afyon Kocatepe Üniversitesi, Afyonkarahisar, Turkey mesutdogan@aku.edu.tr Veysel Ağca Afyon Kocatepe Üniversitesi, Afyonkarahisar, Turkey agca@aku.edu.tr Abstract The main responsibility of Chief Executive Officer (CEO) is to form and implement strategic goals, policies and plans of the firms. Researchers showed that the change of CEO who is on the top position of the organization has positive or negative impacts on firm performance.In the literature, It is not yet seen any study which measures the impact of the of CEO turnover on the firm performance in Turkey. In the international literature, factors that determine CEO turnover have not been examined by differentiating the high-tech and low-tech firms yet. The present research aims at determining factors that play a role turnover of CEO in 173 firms that are traded in Istanbul Stock Exchange (ISE) in the period of 2005-2011. In addition, firms in the research have been divided in two groups and these two groups have been analyzed in terms of the difference of the effect of CEO change rate on firm performance. The results of the analysis showed that decrease in the performance indicators of firms causes CEO turnover. Accordingly, the effects of CEO turnover on firm performance have been found to be higher in high-tech firms than low-tech firms. Key words: Key Words: Firm Performance, Financial Indicators, CEO Turnover, High and Low Technology Firms Introduction Main responsibility of CEO is to form and implement effective strategies in order to achieve goals and objectives determined in the direction of the firm’s vision and mission. Researchers showed that the change of CEO who is on the top position of the organization has positive or negative impacts on firm performance. The decision of CEO’s change and who will be the new CEO is an extremely important issue especially for the firms. The change of CEO in the firms is carried out in two ways. The first is an external mandatory change occurred as a result of deterioration of their financial performance due to economic crisis, intense competition and other compelling reasons. In this case, there are performance improvements expectations by changing the CEO with identified a new and better strategies. The second is an internal voluntary change that occurs when the CEO resigns because of better career expectations and opportunities. In this case, board of directors often selects a new CEO from among the members of the board of the directors who knows well firm’s current valid long-term strategies goals, policies and strategies. As result of this change, the new CEO does not major changes in the firm. Thus, firms generally do not face a bad performance (Lindrianasari and Hartono, 2012: 207). 1 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo High tech means the most advanced and developed technology and expresses the change happening in time. High tech is used to define current technologies rather than the past or future technologies. Therefore, the products considered to be high tech in 1960s, are considered to be standard or even low tech products today. Today, there are more high tech sector’s depending on the intensity of technology used when compared with 20-30 years before (Akgün and Polat, 2011). Sectors using high technologies are sectors such as Energy, Telecommunication, Chemicals, Medical and Computers. On the other hand, low technology doesn’t require an intense technology to be used in the production process or production of service and its investment costs are lower compared to high technology sectors. Sectors such as Textile, Food Production or Concrete Production are considered to be low technology sectors. Majority of the firms being traded in ISE belongs to low technology group. No study measuring the influence of CEO turnover on firm performance in Turkish Capital Market has been encountered during the literature review. In international literature, on the other hand, no study analyzed the effect of CEO turnover on firms separately depending on their being in high and low tech sectors. The present study is expected to contribute both national and international literatures. Therefore this study is taken to be quite important. The present research aims at determining factors that play a role in the change of CEO in 173 firms that are traded in Istanbul Stock Exchange (ISE) in the period of 2005-2011. In addition, firms in the research have been divided in two groups and these two groups have been analyzed in terms of the difference of the effect of CEO change rate on firm performance. The degree of CEO turnover is used as the dependent variable in this study. On the other hand, Return on Assets (ROA), Return on Equity (ROE) and Tobin’s q(Q) are used as performance indicators or measures. Other independent variables are firms’ sales, total assets, leverage ratio and liquidity level This study consists of five sections. Second section found right after introduction summarizes academic studies measuring the relation between CEO change rate and firm performance. Third section consists of introduction of dependent and independent variables and explanation of methodology and sampling of the study. In addition, regression model has been explained and hypotheses have been developed in this section. Forth section contains the empirical results of analysis. And a general assessment of the study has been put forth in the last section. Literature Review There are two ways for a firm to change CEO. First one consists of the obligatory change of CEO depending on external influences due to worsening of firm’s performance. Second one consists of the resignation of CEO due to better career opportunities and this is a voluntary change. Majority of the studies found in literature review show that CEO decisions and the change of CEO are influential factors on firm’s financial performance. Writers such as Helmich (1974), Davidson et al. (1993) have argued that CEO change is effecting firms' performance positively while Grusky (1964), Allen et al. (1979), Carroll (1984), Beatty and Zajac (1987), Haveman (1993) have argued that CEO change is effecting firms’ performance in a negative way. On the other hand, Boeker (1992) have argued that CEO change is not effective at all on firm’s performance (Lindrianasari and 2 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Hartono, 2012, p. 212). Other than these studies, Kesner and Sebora (1994) have used CEO turnover as a dependent variable. The results of their study showed that the higher turnover CEO results in lower firm performance. Similarly Virany et al. (1992), Shen (2000) have put forth a negative relation between ROA and CEO change rate. Deond and Park (1999), Engel et al. (2003) and Defond and Hung (2004) have determined a negative relation between profits before interests and taxes and CEO turnover. In contrast, writers such as Cannella and Lubatkin (1993), Zazac and Westphal (1996) have found weak relations between CEO turnover and firm performance. Other than the studies summarized above, Smith et al. (2008) who have analyzed the relation between control variables and CEO change rate have found that the increase in total assets causes CEO turnover to slow down, while the increase in capital adequacy ratio (equities/total assets) causes an increase in the probability of CEO change. Conyon and He (2008) have analyzed the relation between CEO turnover and firm performance in firms operating in China. 1200 Chinese firms operating in the period of 1999-2006 have been included to their research. According to the findings of the study, a very strong and negative relation has been found between CEO turnover and firm performance. Similarly Lindrianasari and Hartono (2012) have studied the relation between CEO turnover and firm performance for the firms operating in Indonesia. Logistic regression analysis has been used in the study in which data belonging to the period of 1998-2006 has been included. According to the results of the study, negative relations between CEO turnover and Interest and Profit Before, ROA, ROE, total assets, sales and debt-equity ratio while there was a positive relation between current ratio and CEO turnover. Similarly Rachpradit et al. (2012) have studied the effect of CEO turnover and the structure of board of directors and partnership on firm performance in the firms operating in Thailand outside of the financial sector. According to the results of the analysis, probability of CEO change is much lower in cases in which firms are run by families, CEO being a member of the family or increase in the member number of board of directors. In addition, the sensitivity of CEO turnover on firm performance is proven to be much higher in cases in which CEO duality and decrease in the member number of independent board of directors. Additionally, CEO turnover has proven not to be influential on firm performance in cases in which CEO has reached the age of retirement. Methodology The present research aims at determining factors that play a role turnover of CEO in 173 firms that are traded in Istanbul Stock Exchange (ISE) in the period of 2005-2011. In addition, firms in the research have been divided in two groups and these two groups have been analyzed in terms of the difference of the effect of CEO change rate on firm performance. Logistic regression and t test methods have been used in empirical analysis. In the present study, firms which have changed CEOs in the period of 2008-2011 have been determined and factors to cause these changes have been determined. The dependent variable in the present study is CEO turnover. The cases in which a CEO change happens are considered as 1, others are taken as 0. Sectors such as Energy, Telecommunication, Chemicals and Computer are considered as high tech and others belong to low tech. Table 1 shows dependent and independent variables used in the present study. 3 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Table 1: Descriptions of Variables Used in Analysis Variables Description Dependent Variables ( 0, 1) Ceo Turnover (TURNOVER) Independent Variables 1= turnover , 0= otherwise Return on Assets (ROA) The ratio of net profit after tax to total assets Return on Equity (ROE) Tobin’s q (Q) The ratio of net profit after tax to total equity capital Market value to the book value of total assets. Size of firm 2 (SALES) Natural logarithm of total sales Size of firm 1 (ASSETS) Natural logarithm of total assets Leverage (DEPT) The ratio of total liabilities to total assets Liquidity (LIQ) The ratio of current assets to current liabilities Below regression model has been developed using the dependent and independent variables introduced in Table 1 and based on the studies of Defond and Hung (2004); Conyon and He (2008); Smith et al. (2008); Rachpradit et al. (2012); Lindrianasari and Hartono (2012). TURNOVER (1,0)= βit+ β2 ROAit + β3 ROEit + β4 Qit+ β5 LIQit + β6 ASSETSit+ β7 SALESit+ β8 DEBTit+ eit The effect of CEO turnover on firm performance is thought to be higher in high technology firms. Since core competitiveness of these firms for the market and their customers are based on radical innovations. As long as this firms gains sustainable competitive advantage with these innovations, there will not experience an obligatory CEO change. The expectation from an obligatory CEO change in these firms is making innovations based on high technology that provides gains over sector average. These innovations which have a high added value for customers are reflected as high performance. This is provided faster compared to low tech firms. Therefore, the expectation of high performance in the change of CEO is considered to be higher in high technology firms. So main hypothesis of this study is: H1: The effects of CEO turnover on firm performance will be higher for high technology firms than low technology firms. Other hypotheses on performance indicators which have a determining effect on CEO turnover are shown below. H2: ROA has a negative relation with CEO turnover. H3: ROE has a negative relation with CEO turnover. H4: Tobin’s q (Q) has a negative relation with CEO turnover. H5: Liquidity ratio has a negative relation with CEO turnover. H6: Total Assets have a negative relation with CEO turnover. 4 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo H7: Sales have a negative relation with CEO turnover. H8: Debt ratio has a positive relation with CEO turnover. Findings Table 2 shows the results of logistic regression analysis related to the model developed above. Factors causing CEO change have been determined using financial data of 20082011. Table 2: Results of Logistic Regression Analysis Variables B Wald Sig. Exp(B) Constant -1,863 20,352 0,000 0,080 ROA -1,945 13,250 0,008 1,234 ROE -,600 13,652 0,009 0,945 Tobin’s (Q) -1,122 15,005 0,005 1,052 LIQ 0,072 10,287 0,085 1,072 ASSETS -0,092 11,350 0,042 1,096 SALES -0,078 12,665 0,023 1,081 DEPT -1,309 14,354 0,080 3,703 Observation 692 N. R Square ,262 When results from Table 2 are evaluated, the independent variables of ROA, ROE, Q, LIQ, ASSETS, SALES and DEPT are observed to be influencing CEO turnover which is the dependent variable. CEO turnover of firms increases with the decrease of asset profitability, equity profitability, Tobin’s Q rate, total assets, sales and liabilities. In other words, the decrease in accounting and market based performance indicators of firms, results with CEO change. In addition, there is a positive relation between liquidity rate and CEO turnover. In other words, higher ability to pay (solvency) results with higher CEO turnover. As a result hypotheses H2, H3, H4, H6 and H7 are accepted and H5 and H8 hypotheses are rejected. 5 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Table 3: T-Test Table 3 shows the results of t test concerning dependent and independent variables used in analysis. In Table 3, firms are grouped as the ones which have not changed CEOs and the ones which have changed CEOs, so the two groups have been analyzed to determine whether they have a difference in performance or not. 102 firms have changed CEOs and 71 firms haven’t changed CEOs of the firms which were included in the analysis. Between the years 2008-2011, mean ROA, ROE and Tobin’s Q rates of the firms whose CEO’s didn’t change are calculated respectively 3.2%; 4.8% and 2.87, firms whose CEO’s did change calculated 2.8%; -227% and 2.16. The firms which have not changed CEOs during the mentioned years have higher performance indicators both in terms of accounting and market. In addition, total assets and total sales of the firms which have not changed CEOs are higher compared to the firms which have changed CEOs and their short term solvencies and capital adequacy ratio are lower. Table 4: T-Test High and Low Tech Firms Table 4 shows the results of t test concerning dependent and independent variables of the firms which have changed CEOs. Firms are divided in two in Table 4 as high and low technologies and these two groups have been analyzed in terms of their difference in CEO 6 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo turnover. 122 firms are considered to be low technology and 51 are considered to be high technology from 173 firms being traded in ISE. 74 firms from low tech group have changed their CEOs, 28 firms from high tech group have changed their CEOs. Between 2008 and 2011, mean ROA, ROE and Tobin’s Q rates of high tech firms were 3.8%; 0.1% and 2.38 respectively, the mentioned rates for low tech firms were calculated as 2.4%; -4.7% and 1.56. Even though CEOs of the high and low tech firms have been changed in those years, high technology firms still have higher performance indicators both in terms of accounting and market. In other words, high technology firms have a higher CEO turnover in the cases of decreasing of accounting and market based performance indicators by low-tech firms. In addition to this, total assets and sales of high tech firms are higher than low tech firms. In other words, a faster reaction is observed when high tech firms’ sales and assets decrease. However, low tech firms have higher liquidity rate (LIQ) and capital adequacy (DEPT) compared to high tech firms. Since the effect of CEO turnover on the firm’s performance is higher in high tech firms, H1 hypothesis is accepted. General Assessment The present research aims at determining factors that play a role in turnover of CEO in 173 firms that are traded in Istanbul Stock Exchange (ISE) in the period of 2005-2011. In addition, firms in the research have been divided in two groups and these two groups have been analyzed in terms of the difference of the effect of CEO change rate on firm performance. The present study analyzes the interactions between liquidity level, capital adequacy, total assets, sales, accounting and market based performance indicators and CEO turnover. There are two ways for a firm to change CEO. First one consists of the obligatory change of CEO depending on external influences due to worsening of firm’s performance. Second one consists of the resignation of CEO due to better career opportunities and this is a voluntary change. The results of analysis show that CEO turnover increases when asset profitability, equity profitability, Tobin’s Q rate, total assets, sales and liabilities decrease. In other words, the decrease in accounting and market based performance indicators of firms, results with CEO change. There is a positive relation between liquidity rate which is another control variable and CEO turnover. In other words, higher solvency results with higher CEO turnover. So, CEO change seen in firms traded in ISE happened as a result of worsening of financial performance. 102 firms have changed CEOs and 71 firms haven’t changed CEOs of the firms which were included in the analysis. Between the years 2008-2011, mean ROA, ROE and Tobin’s Q rates of the firms whose CEO’s didn’t change are calculated respectively 3.2%; 4.8% and 2.87, firms whose CEO’s did change calculated 2.8%; -227% and 2.16. The firms which have not changed CEOs during the mentioned years have higher performance indicators both in terms of accounting and market. 122 firms are considered to be low tech and 51 are considered to be high tech from 173 firms being traded in ISE. 74 firms from low tech group have changed their CEOs, 28 firms from high tech group have changed their CEOs. Between 2008 and 2011, mean ROA, ROE and Tobin’s Q rates of high tech firms were 3.8%; -0,1% and 2.38 respectively, the mentioned rates for low tech firms were calculated as 2.4%; -4.7% and 7 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo 1.56. Even though CEOs of the high and low tech firms have been changed in those years, they still have higher performance indicators both in terms of accounting and market. In other words, high tech firms have a higher CEO turnover in cases in which accounting and market based performance indicators decrease. In addition to this, total assets and sales of high tech firms are higher than low tech firms. In other words, a faster reaction is observed when high tech firms’ sales and assets decrease. However, low tech firms have higher liquidity rate (LIQ) and capital adequacy (DEPT) compared to high tech firms. Additionally, high liquidity level in a firm doesn’t necessarily show its efficiency and effectiveness. For firms, it is important to keep liquidity level at minimum and to have profitability at maximum. Moreover, it is important for firms to establish a balance between costs and risks, decrease capital costs and raising their market value by doing so. So, the effect of CEO turnover on firm performance is higher in high tech firms. Since intense competition in the high tech sector drives them to be more creative and innovative in terms of their products in order to meet rapidly changing and developing demands, expectations and preferences of the customers. These products and services, which cannot be reproduced and replaced, and which are based on core capabilities with a high added value, take effect faster on performance. With CEO turnover, the success of providing creative and innovative, high quality products are reflected more and quickly in high tech firms compared to low tech firms. References Akgün, A. E., & Polat, V. (2011). Teknoloji Belirsizliği, Pazar Belirsizliği ve Rekabetçi Dalgalanma Ekseninde Yüksek Teknoloji Pazarlaması: Kavramsal Bir Çalışma. KMÜ Sosyal ve Ekonomi̇ k Araştırmalar Dergi̇ si 13 (21), 29-36. Allen, M.P., Panian, S.K., & Lotz, R.E. (1979). Managerial Succession And Organizational Performance: A Recalcitrant Problem Revisited. Administrative Science Quarterly, Vol. 24, 167-180. Beatty, R.P., & Zajac, E.J. (1987). CEO Change And Firm Performance In Large Corporations: Succession Effects And Manager Effects. Strategic Management Journal, 8(4), 305-317. Boeker, W. (1992). Power And Managerial Dismissal: Scapegoating At The Top. Administrative Science Quarterly, Vol. 37, 400-421. Cannella, A. J., & Lubatkin, M. (1993). Succession As a Sociopolitical Process: Internal Impediments To Outsider Selection. Academy of Management Journal, 36(4), 763793. Carroll, G.R. (1984). Organizational Ecology. Annual Review of Sociology, Vol. 10, 71-93. Conyon, M., & He, L. (2008). CEO Turnover and Firm Performance in China’s Listed Firms. http://digitalcommons.ilr.cornell.edu/cri,28.03.2013. Davidson, W.N., Worrell, D., & Dutia, D. (1993). The Stock Market Effects of CEO Succession in Bankrupt?. Journal of Management, 19(3), 517-533. 8 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Defond, M.L., & Hung, M. (2004). Investor Protection And Corporate Governance: Evidence From Worldwide CEO Turnover. Journal of Accounting Research, 42(2), 269-312. Deond, M.L., & Park, C.W. (1999). The effect of Competition on CEO Turnover. Journal of Accounting and Economics, Vol. 27, 35-56. Engel, E., Hayes, R.M., & Wang, X. (2003). CEO Turnover And Properties Of Accounting Information. Journal of Accounting and Economics, Vol. 36, 197-226. Gamson, W., & Scotch, N. (1964). Scapegoating in Baseball. American Journal of Sociology, Vol. 70, 69-76. Grusky, O. (1964). Reply to Scapegoating in Baseball”, American Journal of Sociology, Vol. 70, pp. 72-76. Haveman, H. (1993). Organizational Size and Change. Administrative Science Quarterly, Vol. 38, 20-50. Helmich, D.L. (1974), “Organizational Growth and Succession Patterns. Academy of Management Journal, Vol. 17, 771-775. Kesner, I. F., & Sebora, T. C. (1994). Executive Succession: Past, Present and Future”, Journal of Management, Vol. 20, 327-372. Lindrianasari, J. H. (2012). Antecedent and consequence factors of CEO turnover in Indonesia. Management Research Review, 35(3), 206 – 224. Rachpradit, P., John C.S. T., & Do B. K. (2012). CEO Turnover and Firm Performance, Evidence from Thailand. Corporate Governance, 12(2), 164 – 178. Shen, W. (2000). Political Dynamics Within Corporate Upper Echelons and Their İmpacts on Contender and Outsider CEO Succession. Academy of Management Proceedings BPS: H1. Smith, F., Wright, A., & Huo, Y.P. (2008). Scapegoating Only Works If The Herd is Big: Downsizing, Management Turnover, and Company Turnaround, International Journal of Business Strategy, 8(3), 72-83. Virany, B., Tushman, M.L., & Romanelli, E. (1992). Executive Succession and Organization Outcomes in Turbulent Environments: An Organization Learning Approach. Organization Science, Vol. 3, 72-91. Zajac, E.J., & Westphal, J.D. (1996). Who Shall Succeed? How CEO/Board Preferences andPower Affect the Choice of New CEOs”, Academy of Management Journal, Vol. 39, 64- 90. 9 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1646 Title A name given to the resource The Effect of Degree of CEO Turnover on Firm Performance in High-tech vs. Low-tech Firms: Evidence from Turkey Author Author DOGAN, Mesut AGCA, Veysel Abstract A summary of the resource. The main responsibility of Chief Executive Officer (CEO) is to form and implement strategic goals, policies and plans of the firms. Researchers showed that the change of CEO who is on the top position of the organization has positive or negative impacts on firm performance. The decision of CEO’s change and who will be the new CEO is an extremely important issue especially for the firms. The change of CEO in the firms is carried out in two ways. The first is an external mandatory change occurred as a result of deterioration of their financial performance due to economic crisis, intense competition and other compelling reasons. In this case, there are performance improvements expectations by changing the CEO with identified a new and better strategies. The second is an internal voluntary change that occurs when the CEO resigns because of better career expectations and opportunities. In this case, board of directors often selects a new CEO from among the members of the board of the directors who knows well firm’s current valid long-term strategies goals, policies and strategies. As result of this change, the new CEO does not major changes in the firm. Thus, firms generally do not face a bad performance. In the literature, It is not yet seen any study which measures the impact of the degree of CEO turnover on the firm performance in Turkey. In the international literature, factors that determine the rate of CEO turnover have not been examined by differentiating the high-tech and low-tech firms yet. In this study, it is primarily aimed to determine the effect of the CEO turnover rate on the firm financial performance in the 175 firms registered and traded in the İstanbul Stock Exchange (ISE) between the years 2005-2011. It is secondly aimed to find out if there are differences in terms of the affects of CEO turnover rate on financial performance in the high-tech and low-tech firms. The degree of CEO turnover is used as the dependent variable in this study. On the other hand, Return on Assets (ROA) Return on Equity (ROE) and Tobin’s q(Q) are used as performance indicators or measures. Other independent variables are firms’ sales, total assets, leverage ratio and liquidity level. Hypotheses developed will be tested by analysis examining the interactions between the degree of CEO turnover and financial performance indicators, leverage and liquidity ratios. In addition, factors that effect CEO turnover rate will be determined in the high-tech and low-tech firms and then similarities and differences among these firms will be exposed. Keywords: Firm Performance, Ceo Turnover, Turkey, ROA, ROE. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 978-9958-834-23-3 https://omeka.ibu.edu.ba/files/original/051f3b0f51ed10a04bf80703dc707b5d.pdf 70a13d98e5d00064226ca3cbd435540e PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo The Relationship between Corporate Governance and Performance of Insurance Firms: Evidence from Turkey Mesut Doğan Afyon Kocatepe Üniversitesi, Afyon, Turkey mesutdogan@aku.edu.tr Bilge Leyli Elitaş Yalova Üniversitesi, Yalova, Turkey bilgeleyli@yalova.edu.tr Ramazan Nacar Yalova Üniversitesi, Yalova, Turkey rnacar@yalova.edu.tr There are many studies in the field of corporate governance from all around the world. In accordance with these studies, it is emphasized that it cannot be mentioned about any single corporate governance model which is valid for all countries. Thus, this study aims to research the relationship between corporate governance and performance of insurance firms. Data used in this study is derived from seven insurance firms listed on İstanbul Stock Exchange (ISE) and it is limited to 2005-2011 periods. The effects of corporate governance on performance of insurance firms are analyzed by correlation and multiple regression analysis. In the study, Return on Asset (ROA) and Return on Equity (ROE) are used as performance indicators of insurance firms, namely the dependent variables. The variables such as number of employees, size of assets, free float rate, size of board of directors, number of independent members and CEO duality of insurance firms are used as corporate governance indicators, namely the independent variables. According to the hypotheses developed, the relationships between corporate governance and performance of insurance firms will be analyzed and findings will be reported. Keywords: Corporate Governance İnsurance Companies Firm Performance. 202 � https://omeka.ibu.edu.ba/files/original/a570cccf8c667558cd94d251e2fa4f1e.docx 0f8315f42a73d356b84728aa53d5a16a https://omeka.ibu.edu.ba/files/original/18f8a14e35cc4aba559c1f86978e5ae2.pdf b7ea0cf385809ba40d0b6f028cab01bd PDF Text Text International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo The Relationship between Corporate Governance and Performance of Insurance Firms: Evidence from Turkey Mesut Doğan Afyon Kocatepe University, Afyonkarahisar, Turkey mesutdogan@aku.edu.tr Bilge Leyli Elitaş Yalova University, Yalova, Turkey bilgeleyli@yalova.edu.tr Ramazan Nacar Yalova University, Yalova, Turkey rnacar@yalova.edu.tr Abstract There are many studies in the field of corporate governance from all around the world. In accordance with these studies, it is emphasized that it cannot be mentioned about any single corporate governance model which is valid for all countries. Thus, this study aims to research the relationship between corporate governance and performance of insurance firms. Data used in this study is derived from seven insurance firms listed on Borsa İstanbul (BİST) and it is limited to 2005-2011 periods. The effects of corporate governance on performance of insurance firms are analyzed by multiple regression method. In the study, Return on Equity (ROE) is used as performance indicator of insurance firms, namely the dependent variable. And insurance firms’ size of board of directors, free float rate, CEO duality, the block holder ratio, number of owners and total assets have been used as independent variables. The results of the analysis have proven a positive relation between ROE and free float rate, CEO duality and total assets. Keywords: Corporate Governance, Firm Performance, Insurance Firms. Introduction The most used definition about the corporate governance is “Corporate governance deals with the ways in which the suppliers of finance to corporations assure themselves of getting a return on their investment” by Shleifer and Vishny (1997: 737) Corporate governance aims to manage in a way which maximizes the profits and benefits of corporate shareholders. It has the most important role to gain trust of investors and the public (Pamukçu, 2011: 134). Corporate governance gives investors a power to prevent CEO and board of directors to expropriate all corporations’ assets. Corporate governance can be summarized in one word as a control (Kula, 2006). Maher and Andersson (1999) referred that there is an effect of corporate governance on corporate and economic performance. Corporate governance both influences the progress and processing of capital markets and puts forward powerful impact on resource allocation. 1 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Corporate governance, which is a significant framework condition, also impresses industrial competitiveness and economies of member countries in the period of high capital mobility and rapid globalization (Maher and Andersson, 1999). In the literature there are many studies that researched the effects of corporate governance on corporate performance, especially for developed markets. Researchers stated that fine governance applications result in the enhancements of economic value added, higher productivity and reduce the risk of systematic financial failure. However, there is no sufficient research for emerging markets, thus researching corporate governance in emerging markets is a fastgrowing area (Maher and Andersson, 1999). Corporate governance cause to change business management philosophy in the field of information systems and accounting system (Aysan, 2007). There are studies about the relationship between corporate governance and firm performance in the literature. But the originality of this paper comes from assumption that it is the pioneer study that examined how corporate governance effects the performance of insurance firms for Turkey. This study aims to analyze the effects of corporate governance on the performance of insurance firms. The originality of this paper with this purpose, a sample has been constituted by using financial data of 7 insurance firms traded in Borsa İstanbul (BIST) for the period of 2005-2011. The effects of corporate governance on the performance of insurance firms are analyzed by multiple regression method. In the study, Return on Equity (ROE) is used as performance indicator of insurance firms, namely the dependent variable. And insurance firms’ size of board of directors, free float rate, CEO duality, the block holder ratio, number of owners and total assets have been used as independent variables. The study consists of five sections. In the second section that follows the introduction part, we summarize academic studies that measure the relationship between corporate governance and firm performance. The third section describes the methodology and the model of the study by introducing dependent and independent variables. The fourth chapter covers the results of multiple regression models. And in the last section we conducted an overall assessment of the research. The Literature Review Drobetz, Schillhofer and Zimmermann (2003) examine the relationship between corporate governance and firm performance in Germany. Tobin’s Q and market-to-book ratio (MTBR) are used as firm valuation measures. According to the results of the empirical study there is a strong and a significant positive relationship between the quality of firmlevel corporate governance and firm valuation. Beiner et. al. (2004) analyzed the relationship between corporate governance and firm valuation for Switzerland. The results of study show that corporate governance index (CGI), board size and shareholdings of officers and directors have a statistically significant effect on firm valuation. Beiner et. al. (2004) stated that the positive relationship between firm-level corporate governance and Tobin’s Q. 2 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Wu and Xu (2005) investigated corporate financing decisions and corporate governance effects on the firm value. Findings of the study are consistent with major corporate governance theories explaining financing decisions’ roles in a more competitive financial market. Chhaochharia and Grinstein (2007) founded that the corporate governance rules (SarbanesOxley Act) had a significant effect on firm value. Javed and Iqbal (2007) analyzed the relationship between corporate governance and firm value for the Karachi Stock Market, Pakistan. The sample of 50 firms is selected for the year 2003, 2004 and 2005 for the empirical study. The Tobin’s q, corporate governance index (CGI)-board composition (board), ownership and shareholdings (share) and disclosure, transparency and auditing (disc.); and size (in assets), leverage (debt/total asset ratio) and growth (average sale growth) are used in estimation. According to the results of the study a positive and significant relation has been found between the quality of firmlevel corporate governance and firm performance. Toraman and Abdioğlu (2008) investigated weak and strong corporate governance practices of Borsa Istanbul (BIST) corporate governance index companies. In this respect rating reports had been investigated. Study results shows that the most powerful corporate governance practices are observed at the stakeholders section and the weakest are at the board of directors section of the guide. Dinç and Abdioğlu (2009) have studied the relationship between corporate governance and accounting information system with an empirical study for the BIST-100 (Borsa İstanbul100) companies. Dinç and Abdioğlu (2009) points out that there is a strong positive correlation between accounting information system and corporate governance. Karamustafa et. al. (2009) investigated the relationship between corporate governance and corporate performance by analyzing Corporate Governance Index of 8 firms listed in BIST (Borsa İstanbul). They used both pre- and post-indexed the firms’ data. They treated current ratio, asset turnover, ROA, profit capital ratio, net profit margin, operating profit margin, debt ratio and financial leverage ratio as financial performance indicators of firms. They founded that there is statistical difference for asset turnover, ROA, and profit capital ratio between pre- and post-index periods. Najjar (2012) in his study examines the effect of corporate governance mechanisms on the firm’s performance of the insurance industry in Bahrain. A sample of five insurance companies listed on Bahrain Stock Exchange (BSE) has been used for the period of 20052010. The Pooled Least Squares method is used for the empirical study. Board size, CEO status, ownership concentration, firm size, industry performance, employees, shares traded is used as the independent variables and ROE is used as a dependent variable. According to the findings Najjar (2012) stated that in Bahrain there is a significant impact for corporate governance on the firm’s performance in the insurance industry. No significant impact of corporate governance has been found expressed by CEO status, ownership concentration, the number of employees, industry performance and number of shares traded on the firm’s performance (ROE). But a significant impact has been found for board size, firm size and number of blocks-holders on firm performance. 3 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Hatunoğlu and Güneş (2012) studied about the effects of the corporate governance practices on accounting information system based on new Turkish Commercial Code. Methodology The present study aims to analyze the influence of corporate governance on insurance firms' performance. With this purpose in mind, a sample has been constituted by using financial data of 7 insurance firms traded in Borsa İstanbul (BIST) in the years of 20052011. All data utilized in the study have been obtained from the official web site of Borsa İstanbul (BIST)1. Multiple regression and descriptive statistics have been used in empirical analysis. Durbin-Watson d statistic has been used to test if there is an autocorrelation of first degree between the error terms of the sample. Additionally, variance inflation factors (VIF) method has been used to determine multicollinearity. One dependent variable (ROE) and six independent variables (BOARDSIZE, FFRATE, DUALITY, BLOCKHOLDERS, OWNERSHIP and SIZE) have been used in the multiple regression models. Dependent and independent variables used in the study are as below. Table 1: Descriptions of Variables Used in Analysis Variables Description Dependent Variables Return on Equity (ROE) Independent Variables The Size of the Board of Directors (BOARDSIZE) Free Float Rate (FFRATE) Ceo Duality (DUALITY) Structure of Ownership (BLOCKHOLDERS) Number of Owners (OWNERSHIP) Size of firm (SIZE) Variables Description The ratio of net profit after tax to total equity capital It shows the total number of members in board of directors. It is the rate of free float of the business. The cases in which CEO is the chairman of the board of directors=1 other cases=0 The ratio of blockholder’s stocks to all stocks. Number of owners of insurance firms Natural logarithm of total assets Below regression model and hypotheses have been developed based on dependent and independent variables introduced in Table 1 as well as considering the studies of Najjar (2012) and Javed and Iqbal (2007) found in literature. Model: (ROE)it= βit+ β2 BOARDSIZE it + β3 FFRATE BLOCKHOLDERS it + β6 OWNERSHIP+ β7 SIZE +eit H1: There is significant impact for board size on ROE. H2: There is significant impact for free float rate on ROE. H3: There is significant impact for Ceo duality on ROE. 1 www.borsaistanbul.com 4 it + β4 DUALITY it+ β5 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo H4: There is significant impact for blockholders on ROE H5: There is significant impact for ownership concentration on ROE H6: There is significant impact for firm size on ROE Table 2 shows the results of descriptive statistics concerning dependent and independent variables used in empirical analyses. As shown in Table 1, average return on equity (ROE) of the firms listed in BIST and reviewed in scope of the analysis is calculated as -0.7%. Additionally, the values for insurance firms’ board of directors’ size (BOARDSIZE), their free float rate (FFRATE), the ratio of block holder’s stocks to all stocks (BLOCKHOLDERS) and number of owners (OWNERSHIP) have been determined as 7.57; 22.37; 61.26 and 3.14 respectively. Table 2 Descriptive Statistics Variables Minumum Maximum Mean St. Dv. Roe Number Of Observations 49 -1,34 0,36 -0,007 0,30 Boardsize Ffrate 49 49 5 1,34 14 41 7,57 22,37 1,58 1,45 Duality 49 0 1 0,29 0,45 Blockholders 49 34,22 98,66 61,26 2,05 Ownership 49 2 5 3,14 1,12 Size 49 22,45 18,68 20,53 1,01 Findings Table 3 shows multiple regression analysis results indicating the relation between performance of insurance firms and corporate governance related to above developed model. Table 3 Results of Regression Analysis MODEL ROE Constant BOARDSIZE FFRATE DUALITY BLOCKHOLDERS OWNERSHIP SIZE F-Statistic Adjusted R2 DurbinWatson Unstandardized Coefficients B Standart Error -2,497 ,553 ,004 ,017 ,009 ,004 ,209 ,055 ,004 ,003 ,037 ,032 ,090 ,029 Standardized Coefficients Beta ,023 ,445 ,315 ,247 ,140 ,303 t -4,51 ,259 2,232 3,821 1,316 1,169 3,087 7,285 0,162 1,745 Sig. ,000 ,796 ,027 ,000 ,190 ,244 ,002 ***, ** and * indicate significance at the level of 1%, 5% and 10% respectively 5 Collinearity Statistics Tolerance VIF ,547 ,108 ,634 ,122 ,299 ,445 1,828 9,233 1,578 8,219 3,342 2,246 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo According to Table 4, the results of regression model may be shown mathematically as below: Model : (ROE)it= βit+ (,023)BOARDSIZE it + (,445)FFRATE it + (,315)DUALITY it+ (,247)BLOCKHOLDERS it + (,140)OWNERSHIP+ (,303)SIZE +eit When Model 1 is analyzed, independent variables of FFRATE, DUALITY and SIZE are observed to influence insurance firms’ performance (ROA). A positive relation has been found between free float rate (FFRATE), Ceo duality (DUALITY) and total assets (SIZE) and performance (ROE) of the insurance firms. In other words performance increases as free float rate and total assets of the insurance firm increase. In addition to this, return on equity rate of insurance firms have been observed to increase in cases in which general manager is also chairman of the board of directors. A positive and statistically insignificant relationship has been determined between insurance firms’ financial performances and other independent variables, namely the size of board of directors (BOARDSIZE), the ratio of block holder’s stocks to all stocks (BLOCKHOLDERS) and number of owners (OWNERSHIP). Although BLOCKHOLDERS and OWNERSHIP did not have a significant relation with the performance of insurance firms, the positive quality of this relation (β= 0,247 and 0,140) may be considered as an important finding. In conclusion, H2, H3 and H6 hypotheses are accepted while H1, H4 andH5 hypotheses are refuted. Durbin-Watson d statistics have been used in the model to test if there is autocorrelation of the first degree. Durbin-Watson d statistics usually show no autocorrelation around 1.5 and 2.5 (Kalaycı, 2009: 267). Variance Inflation Factor (VIF) has been used to test multicollinearity and to support regression model’s results. Other method used to determine multicollinearity problem is tolerance value of the variables. In cases where VIF value is under 10 and tolerance value is not very close to 0, model is considered to be free from multicollinearity problem (Gujarati, 1995). All three models have pretty good VIF and tolerance values. There are no multicollinearity problems and autocorrelation in the model and this shows soundness and reliability of the model. Findings The present study aims to analyze the influence of corporate governance on insurance firms' performance. With this purpose in mind, a sample has been constituted by using financial data of 7 insurance firms traded in Borsa İstanbul (BIST) in the years of 20052011. In the study, Return on Equity (ROE) is used as performance indicator of insurance firms, namely the dependent variable. And insurance firms’ sizes of board of directors, their free float rates, CEO duality, the block holder ratio, number of owners and total assets have been used as independent variables. The results of the analysis have proven a positive relation between ROE and free float rate, CEO duality and total assets. . In other words performance increases as free float rate and total assets of the insurance firm increase. In addition to this, return on equity rate of insurance firms have been observed to increase in cases in which general manager is also chairman of the board of directors. A positive and statistically insignificant relationship has been determined between insurance firms’ financial performances and other independent variables, namely the size of board of directors (BOARDSIZE), the ratio of 6 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo block holder’s stocks to all stocks (BLOCKHOLDERS) and number of owners (OWNERSHIP). Although BLOCKHOLDERS and OWNERSHIP did not have a significant relation with the performance of insurance firms, the positive quality of this relation (β= 0,247 and 0,140) may be considered as an important finding. In conclusion, H2, H3 and H6 hypotheses are accepted while H1, H4 andH5 hypotheses are refuted. References Aysan, Mustafa A. (2007) “Muhasebe ve Kurumsal Yönetim” Muhasebe ve Finansman Dergisi (MUFAD), Sayı: 35, 17-24. Beiner, Stefan; Drobetz, Wolfgang; Schmid, Markus M.; Zimmermann, Heinz (2004) “An Integrated Framework of Corporate Governance and Firm Valuation Evidence fromSwitzerland” European Corporate Governance Institute (ECGI) Working Paper Series in Finance, Working Paper No: 34/2004 January. Chhaochharia, Vidhi and Grinstein, Yaniv (2007) “Corporate Governance and Firm Value: The Impact of the 2002 Governance Rules” The Journal of Finance Vol. 62, No. 4 (August 2007), pp 1789-1825. Dinç, Engin and Abdioğlu, Hasan (2009) “İşletmelerde Kurumsal Yönetim anlayışı ve Muhasebe Bilgi Sistemi İlişkisi: İMKB-100 Şirketleri Üzerine Ampirik Bir Araştırma” Balıkesir Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, Cilt: 12, Sayı: 21: 157-184. Drobetz, Wolfgang; Schillhofer, Andreas; Zimmermann, Heinz (2003) “Corporate Governance and Firm Performance: Evidence From Germany” http://www.cofar.uni mainz.de/dgf2003/paper/paper146.pdf Erişim Tarihi: 28.04.2013. Gujarati, N. D. (1995), “Basic Econometrics. 3rd Edition”, New York McGraw-Hill, ISBN 0-07-025214-9. Hatunoğlu, Zeynep and Güneş, Nazire (2012) “Kurumsal Yönetim Uygulamalarının Muhasebe Bilgi Sistemine Etkileri” II. Bölgesel Sorunlar ve Türkiye Sempozyumu, 1-2 Ekim 2012, 238-244. Javed, Attiya Y. and Iqbal, Robina (2007) “Relationship Between Corporate Governance Indicators and Firm Value: A Case Study of Karachi Stock Exchange” Munich Personal RePEc Archive (MPRA), Paper No: 2225, http://mpra.ub.uni-muenchen.de/2225/Erişim Tarihi: 26.04.2013 Kalaycı, Şeref (2010), “SPSS Uygulamalı Çok Değişkenli İstatistik Teknikleri”, 5. 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Shleifer, Andrei and Vishny, Robert W. (1997) “A Survey of Corporate Governance” The Journal of Finance, Vol. 52, 737-783. Toraman, Cengiz; Abdioğlu, Hasan (2008) “İMKB Kurumsal Yönetim Endeksinde Yer Alan Şirketlerin Kurumsal Yönetim Uygulamalarında Zayıf ve Güçlü Yanları: Derecelendirme Raporlarının İncelenmesi” Muhasebe ve Finansman Dergisi (MUFAD), Sayı: 40, 96-109. Wu, Xueping and Xu, Lily Li (2005) “The Value Information of Financing Decisions and Corporate Governance During and After The Japanese Deregulation” The Journal of Business, Vol. 78, No. 1 (January 2005), pp. 243-280. 8 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1663 Title A name given to the resource The Relationship between Corporate Governance and Performance of Insurance Firms: Evidence from Turkey Author Author DOGAN, Mesut BILGE ELITAS, Leyli NACAR, Ramazan Abstract A summary of the resource. There are many studies in the field of corporate governance from all around the world. In accordance with these studies, it is emphasized that it cannot be mentioned about any single corporate governance model which is valid for all countries. Thus, this study aims to research the relationship between corporate governance and performance of insurance firms. Data used in this study is derived from seven insurance firms listed on İstanbul Stock Exchange (ISE) and it is limited to 2005-2011 periods. The effects of corporate governance on performance of insurance firms are analyzed by correlation and multiple regression analysis. In the study, Return on Asset (ROA) and Return on Equity (ROE) are used as performance indicators of insurance firms, namely the dependent variables. The variables such as number of employees, size of assets, free float rate, size of board of directors, number of independent members and CEO duality of insurance firms are used as corporate governance indicators, namely the independent variables. According to the hypotheses developed, the relationships between corporate governance and performance of insurance firms will be analyzed and findings will be reported. Keywords: Corporate Governance İnsurance Companies Firm Performance. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 978-9958-834-23-3 https://omeka.ibu.edu.ba/files/original/2eaac69d35c1faa711fd0ddc30200a9e.pdf e882267a1e5ab52271deda1771980d77 PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo A Case Study of Electronic Government Adoption Dzenan Donko International Burch University, Sarajevo, Bosnia and Herzegovina Meliha Handzic International Burch University, Sarajevo, Bosnia and Herzegovina mhandzic@ibu.edu.ba Electronic government initiatives in Bosnia and Herzegovina are still in its infancy and facing many issues and challenges. Therefore, the main goal of this study is to gain a better understanding of these issues and challenges by examining the adoption and diffusion of ‘e-government services’ from the citizen’s perspective at the local municipal level. Sixty nine usable responses were obtained from one hundred surveyed citizens with permanent residency in the Centar Municipality Sarajevo. The participants were asked about their perceptions of different aspects of egovernment services provided by their municipality. The results are encouraging. The citizens of Centar Municipality Sarajevo perceived their municipal e-government system as useful, easy to use, and having a high level of information quality. Consequently, they were willing to use e-government, particularly for accessing laws and by-law acts, filing state taxes, ordering birth, death and marriage certificates, renewing drivers’ licenses, registration and shopping. However, they were not in favour of using internet for online voting. Keywords: Electronic Government, Local Government, Case Study, Municipality Centar-Sarajevo 88 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1504 Title A name given to the resource A Case Study of Electronic Government Adoption Author Author DONKO, Dzenan HANDZIC, Meliha Abstract A summary of the resource. Electronic government initiatives in Bosnia and Herzegovina are still in its infancy and facing many issues and challenges. Therefore, the main goal of this study is to gain a better understanding of these issues and challenges by examining the adoption and diffusion of ‘e-government services’ from the citizen’s perspective at the local municipal level. Sixty nine usable responses were obtained from one hundred surveyed citizens with permanent residency in the Centar Municipality Sarajevo. The participants were asked about their perceptions of different aspects of egovernment services provided by their municipality. The results are encouraging. The citizens of Centar Municipality Sarajevo perceived their municipal e-government system as useful, easy to use, and having a high level of information quality. Consequently, they were willing to use e-government, particularly for accessing laws and by-law acts, filing state taxes, ordering birth, death and marriage certificates, renewing drivers’ licenses, registration and shopping. However, they were not in favour of using internet for online voting. Keywords: Electronic Government, Local Government, Case Study, Municipality Centar-Sarajevo Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-4564