Turkey's leading employers and CEO's have come together in a panel titled "Board V 2.0: New Paradigm, New Definition". Attracting full attention of the business community, the panel was jointly organized by Odgers Berndtson and Istanbul Bilgi University. It took place at Santral Istanbul campus of Istanbul Bilgi University and was moderated by Dr.Ecmel Ayral, Business Development Director of İstanbul Bilgi University. The panellists were prominent names of the corporate world, such as Baroness Virginia Bottomley, Chair of Board & CEO Practice at Odgers Berndtson UK, Agah Uğur, CEO of Borusan Holding, Ayça Dinçkök, Board Member of Akkök Holding and Dr.Paul Doany, CEO of Turk Telekom.
In her opening note, Ayşe Öztuna Bozoklar, Managing Partner of Odgers Berndtson Turkey underlined the importance of the right partner who can bring the board and the independent board member candidate together, manage the process right and successfully monitor the performance as needed. She stated that operating at 51 offices in 24 countries, number two in its field in Europe, Odgers Berndtson (former Ray & Berndtson) is taking the lead in identifying, developing independent board members and increasing the overall performance of boards, with its experience and successful practices in the markets it operates.
Baroness Virginia Bottomley, Chair of Board & CEO Practice at Odgers Berndtson UK and Governor of the London School of Economics, stated that due to the challenges brought by the economic conditions, the existence of independent board members who can take critical roles in a broad range of responsibilities such as shaping the strategies, monitoring the performance of top management, risk and reputation management and addressing global opportunities, have reached highest importance.
Virginia Bottomley stated that "In the current environment and looking at the best practices in developed economies, independent membership in the Boards, is the best, the easiest, fastest to implement method that will provide corporate shareholders supervision, control and direction over professional management. Moreover, when compared to the methods in use today aiming to provide top-down impetus to performance and considering the benefits gained in return, it is even surprisingly efficient for the organizations. Independent Boards are needed, not just to say that "we have it" or because it is required by laws, but because it will provide momentum to performance and create added value.
Some of the other highlights from the discussions in the panel were as follows:
Along with the crisis, nothing will be "as usual" for the companies. "Management Quality" will be the key determinant of the main "paradigm" of the new era. Therefore, in order to make quality decisions and make this sustainable, existence of "non-executive members" in the boards, who have accumulated expertise in areas like financial management, who are able to oversee corporate governance, is gaining importance.
Many recent studies indicate that, companies who have implemented the principles of corporate governance, yield 18% higher return to their shareholders and that Non-Executive Board Members definitely have positive impact on the organization's performance. Similar studies also indicate that, especially in emerging economies, companies that are "managed better" are on average 28% more valuable in respect to the corporate investors.
Looking at the boards of 100 largest organizations in Turkey, it is surprising to see that, percentage of independent board members among the total number of board members is less than 30%. Independent board members should be "real" independents who can "objectively" challenge and support the execution. With the independent board member model, a body that can assess the performance of top management with a balanced approach, is valuable.
In order to download Virginia Bottomley's presentation, please click here.