You can find below our brief regarding the electronic participation to board of directors meetings in joint stock companies.
In addition to the traditional methods, as a reflection of developing technology and globalization, many new regulations have been introduced with the amendments in Turkish Commercial Code numbered 6102 (“TCC”), in order to benefit from technological developments such as electronic notification, keeping commercial company books electronically, holding general assembly and board of directors meetings in electronically etc.
In fact, the general rule is to hold the board of directors meeting physically and if none of the members requests a physical meeting, decisions can also be taken by circulating the papers. A third opportunity provided by the TCC is to hold board meetings electronically. Thus, it is aimed to facilitate the management of the company and to minimize the possible risks by enabling the board of directors to take instant decisions without being stuck with physical and temporal obstacles. As a matter of fact, the board of directors has inalienable duties and powers in terms of the management of the company, and the inability of the board of directors to convene on time would negatively affect the operation of the company, and this would bring the responsibility of the members of the board of directors to the agenda.
Conditions for Holding an Electronic Board of Directors Meeting
The legal basis of holding the board of directors meetings electronically is Article 1527 of the TCC. According to this provision, although it is possible to hold the meetings of the board of directors electronically or electronic participation in the board meetings where some members cannot attend physically, these matters must be stipulated in the articles of association. For the electronic board of directors meeting, the company must also have an information system dedicated to this purpose.
In this respect, the detailed regulation regarding the electronic board of directors meeting is regulated in the Communiqué on Electronic Boards to be Held in Commercial Companies, Except for Joint Stock Company General Assemblies (“Electronic Boards Communiqué”). According to the Electronic Boards Communiqué, the company that will hold an electronic board of directors must establish an Electronic Meeting System (“ETS”), must register and announce it.
Established system must have the design and capacity to enable all operations specified in the relevant secondary legislation, backup and recovery plans, necessary network and system security against unauthorized access and cyber-attacks.
Participation to Electronic Board of Directors Meeting
Pursuant to Article 9 of the Electronic Boards Communiqué, information and documents regarding participation in the meeting and voting in electronically must be made available on the company’s website, along with the invitation to the Board of Directors meeting.
It would be sufficient for the member of the board of directors to declare its attendance to electronic board of directors meeting. To this, the request to attend the meeting electronically on the company’s website must be signed with a secure electronic signature one day before the meeting date and forwarded to the company’s KEP (registered e-mail) account.
Thereafter, the company receiving the participation request makes the necessary definitions for the access to the Electronic Meeting System (ETS), which is opened one hour before the board of directors meeting, so that a member can attend the meeting.
The member of the board of directors logs in to the system, using its secure electronic signature and expresses its opinions on the agenda in writing or audibly, makes suggestions and votes the agenda items. The chairman of the meeting adds the opposition statements to the decision of the board of directors if any.
The decisions of the board of directors can be signed electronically or can be signed later with a physical signature. Afterwards, the compulsory registration decisions are transferred to the Central Registry Registration System (MERSİS) and registered and announced before the relevant trade registry directorate. In addition, the fact that the electronic meeting does not affect the meeting and decision quorums set out in the TCC or in the AoA. Accordingly, unless there is an aggravating provision in the AoA, the board of directors are convened with the majority of the total number of members of the board of directors and take a decision with the majority of the members present at the meeting.
With Article 1527 of the TCC, joint stock companies have been given the opportunity to hold their board of directors meetings electronically, while certain conditions have been sought by law and secondary legislation. Every joint stock company that meets the above-mentioned conditions is able to hold an electronic board of directors meeting. Through the electronic board of directors meetings, the decision-making process has accelerated, especially for companies with foreign capital, and it has become easier for companies to maximize their benefits in terms of time and finances. If an electronic board of directors meeting is not hold in accordance with the legislation, the validity of the meeting and the decisions taken shall be deemed void and the responsibility of the members of board of directors may come to the fore.