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| Corporate Governance |
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The Board of Directors
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18. Structure and Formation of the Board of Directors and Independent Members 18.1. The composition and election of the Board of Directors are subject to the turkish Commercial Code and related provisions are set forth in the Articles of Association. Some arrangements have been made to comply with the CMB principles. 18.1.1. The Company is managed and represented by a Board of Directors that consists of nine members elected from among the shareholders at the General Meeting of Shareholders. 18.1.2. At least one third of the Board Members must be independent members who meet the qualifcations specifed in the CMB’s Corporate Governance Principles. Individuals who have served on the Board for seven years cannot be elected independent members. 18.1.3. The number of executive directors cannot exceed half of the Board of Directors and this point is taken into consideration especially when defning the duties of Board Members. 18.2. Members of the Board of Directors and their status:
18.2.1. There are three independent members on the Board of Directors. The obligation of constituting at least one-third of Board Members from independent members for meeting the requirements set forth by the CMB in the Corporate Governance Principles has been fulflled. 18.2.2. The Chairman and the Chief Executive Ofcer of the Company are diferent persons. 18.2.3. Of the directors, more than half are non-executive members. 18.2.4. Cem Kozlu, born in 1946, was appointed Independent Board Member and he is a consultant for the North Asia, Eurasia and the Middle East Group of the Coca-Cola Company. Before joining the Coca-Cola Company, Kozlu served as a Member of Parliament for four years and as the Chairman of Turkish Airlines. He has written four books on economics and business, one of which is a university textbook on international marketing. The second independent member, Kai Diekmann, born in 1964, served as News Editor at Bunte Magazine and as Editor-in-Chief of the Welt am Sonntag newspaper. In 2001, he was appointed Editor-in-Chief of Bild, the best-selling newspaper of Germany and became Bild’s publisher in 2004. Presently he serves as the publisher of Bild am Sonntag. After his appointment, Diekmann turned the Bild newspaper into one of the best-selling, most efcient and most proftable publishing organizations in Europe. In 2004, he wrote the biography of former German Chancellor Helmut Kohl, who is a close friend. The third independent Board Member Hakkı Hasan Yılmaz was born in 1957. Having served at executive positions in the private sector over many years, Yılmaz was appointed President of Food, Retailing and Tourism businesses of Koç Holding in 2002. He served as the Chairman and Vice Chairman of 21 companies under the Koç Group, responsible for 12,000 employees and over US$ 3 billion turnover, corresponding to 20% of the Koç Group businesses at the time. Since 2005, he has been the “Adjunct Professor/Distinguished Executive in Residence” at Koç University, teaching several courses and supporting the MBA and EMBA programs. 18.2.5. There are no rules and/or restrictions regarding the employment of Board Members outside the Company. 18.3. From the independent members of the Board of Directors written statements regarding their independence that the meet the criteria specifed in the CMB principles are taken. As of the date of this report, there existed no circumstances that would cause any Board Member to lose his/her independent status. back to top
19. Qualifications of Board Members 19.1. the Board of Directors is constituted to ensure maximum efciency and efectiveness. CMB principles are complied with in this regard and relevant guidelines are specifed in the Articles of Association: 19.1.1. Members of the Board of Directors shall be elected from among individuals who have basic knowledge of the legal environment in the Company’s line of business, are professional and experienced in management, can review fnancial statements and preferably hold relevant university degrees. 19.1.2. In order to perform its obligations and duties, every year, the Board of Directors may designate members responsible for fnancial, monetary and legal issues and may delegate part of its duties by assigning executive directors who shall oversee the implementation of the Board’s resolutions. 19.1.3. The compliance program shall be led by the Corporate Governance Committee and implemented under the responsibility of the CEO. Every new member joining the Board of Directors receives an information folder prepared by the Secretariat of the Board of Directors and attends meetings organized by the Secretariat, obtaining information on such issues as the Company’s operations, the situation of the industry as a whole, the competitive environment and reader profles. 19.2. Resumes of Board Members are available in the annual report and at www.hurriyetkurumsal.com. back to top
20. Mission, Vision, Strategic Objectives
20.1. Mission: Hürriyet’s mission is to provide accurate news and information, as well as honest analyses and assessments to all turkish-speaking people around the globe. to accomplish this objective, the main task of the executives of Hürriyet and its subsidiaries is to maintain the independence of both the Company and the newspaper and to manage the Company in a way that will provide maximum value to shareholders. 20.2. Vision: playing an active role in turkey’s modernization, Hürriyet stands out with its high-quality publishing, employee focus and social responsibility. Hürriyet has always been and will continue to be guided by its commitment to serving the public good and maintaining its role as a pioneer. 20.3. Strategic Objectives: Hürriyet’s strategy involves providing customer-focused service, developing reader-oriented specialty products, producing content for traditional brands, keeping abreast of advances in technology and innovatively diversifying and expanding content distribution channels. the Company’s strategy also involves tailoring information and educational products and tools to individuals, diversifying and expanding its sales and distribution channels and cooperate with the world’s leading media enterprises. The Board of Directors and the management continuously review Hürriyet’s position in line with its strategic objectives. At regular and frequent board meetings, the Company reviews its position in the market and devises new targets and strategies responding to changing conditions. the strategic targets defned by executives are implemented following the approval of the Board of Directors. the Chairman of the executive Board reports on progress in achieving the targets and past performance to the Board of Directors. back to top
21. Risk Management and Internal Control Mechanism
21.1. Risk Management Risk management, operational and fnancial risks the Company is exposed to and eforts by the Corporate Risk Management unit are described in detail under the “Risk Management” section of the Annual Report. 21.2. internal Control The internal audit and internal control system of the Company is described in detail under “internal Control” section of the Annual Report, and the Board of Directors’ declaration on whether the internal control system functions robustly is attached to the Report. In 2008, groundwork was laid for the transition to a risk-based internal control structure, joint eforts were undertaken with the Risk Management Department in areas where risks were identifed. the reports issued facilitated swift action and enabled the Company to face the current crisis environment in the most efective, efcient and robust manner. back to top
22. Authorities and Responsibilities of Board Members and Executives
22.1. The authorities and responsibilities of the Board Members and executives are set forth in the Company’s Articles of Association, in a manner that is consistent with their functions, and is clearly identifable and distinguishable beyond suspicion from the authority and responsibilities of the General Meeting of Shareholders. The agenda of the Board of the Directors meeting drafted by the CeO is submitted to all Board Members at least one week before the date of the meeting by the Secretariat of the Board of Directors, and is revised in accordance with the suggestions of Board Members. As a rule, the Board of Directors convenes upon the invitation of either the Chairman or the Deputy Chairman. it is also mandatory for the Board of Directors to convene upon the joint request of at least three of its members. Any internal auditor or minority shareholder may invite the Board to a meeting, by determining its agenda in advance. in this case, the Chairman of the Board of Directors evaluates the emergency of the matter specifed in the request. eventually, the Chairman may either call for a meeting immediately or decide to postpone the discussion of the matter until the next ordinary meeting of the Board of Directors, assuming the responsibility of this decision and explaining its reasons. Except for situations that require emergency meetings, meeting calls must be made at least seven days before the meeting date and shall also include the agenda of the meeting and all documents and information on agenda items. 22.3. If there are dissenting opinions and negative votes, the reasons of the negative votes are entered into the minutes of the meeting. in 2008, no material disclosures were made due to the absence of dissenting opinions and negative votes. 22.4. Personal presence of all members at board meetings is ensured for decisions on matters that require personal presence as per the Corporate Governance principles of the Capital Markets Board. back to top
23. Fundamentals of Activities of the Board of Directors 23.1. Members of the Board of Directors are promptly provided all information they may need to adequately perform their duties. 23.2. the Board of Directors makes a separate decision for the approval of the fnancial statements, their footnotes and the independent Audit Report, the Corporate Governance Compliance Report and the Annual Report. 23.3. Meetings of the Board of Directors are organized by the Chairman, the Deputy Chairman or the CeO, who is also a Board Member. Communication between Board Members is facilitated by the Secretariat of the Board of Directors, which is responsible for keeping all documents regarding the meetings of the Board of Directors. the duties and responsibilities of the Secretariat of the Board of Directors, which directly reports to the Chairman of the Board, are stated in the Articles of Association. 23.4. in 2008, the Board of Directors held 58 meetings and approved all resolutions unanimously, without any opposing votes. 23.5. Meetings of the Board of Directors are planned efectively and efciently. As stated in the Articles of Association: 23.5.1. The Board of Directors meets whenever required by the business of the Company and at least once every month. 23.5.2. As a rule, the Board of Directors meets when requested by the Chairman, the Deputy Chairman or the CEO, who is also a Board Member. The meeting date may be decided by the Board of Directors as well. In case the Chairman or Deputy Chairman does not call for a meeting upon the request of one of the Board Members, then the members shall have the right to call for a Board meeting. Any internal auditor may call for a Board meeting, by determining its agenda in advance. 23.5.3. Meeting calls are made at least seven days before the meeting date and include the agenda and all documents and information related to agenda items. 23.5.4. As a rule, meetings of the Board of Directors take place at the Company’s headquarters. However, upon a decision of the Board of Directors, meetings can be held in a diferent location in the same city or in another city. 23.5.5. Members of the Board of Directors primarily attend meetings in person. However, it is also possible to use technology that provides remote access. Written opinions of members who cannot attend the meetings in person are conveyed to the other members. 23.5.6. Discussions at meetings of the Board of Directors must be entered into minutes and signed by the members present at the meeting. Opponents to a decision must also sign the minutes, declaring their dissenting opinion and its reasons. The minutes, other related documents and all relevant correspondence must be duly fled by the Secretariat of the Board of Directors. Detailed opinions and the reasons of opposition of dissenting independent members are also disclosed to the public. 23.5.7. Board of Directors meetings require the presence of at least one more than half of the full number of members and decisions require a simple majority of members present at the meeting. In case of equality of votes, the subject matter is added to the agenda of the next Board meeting and if it cannot be approved and decided upon by a majority of the votes at the next Board meeting, the relevant motion is deemed to have been disapproved. Each member is entitled to one vote, irrespective of its position and duties in the Board of Directors. 23.5.8. Pursuant to the second paragraph of Article 330 of the Turkish Commercial Code, Board decisions may be taken by receiving the written consent and approval of other members for a written proposal of any member. However, this method does not apply to decisions on matters that require personal presence at the meeting pursuant to the Corporate Governance Principles of the Capital Markets Board. The following agenda items can only be approved by Board Members attending the meeting in person: a) Determination of the business areas in which the Company will operate and approval of business and fnance plans, b) calling for an ordinary/extraordinary General Meeting of Shareholders and issues related to the organization of the meeting, c) fnalization of the annual report to be presented to the General Meeting of Shareholders, d) election of the Chairman of the Board and the Deputy Chairman; appointment of new members, e) establishment or decommissioning of administrative units, f) appointment and dismissal of the CEO, g) establishmentofcommittees, h) mergers, spin-ofs, restructuring, sale of the Company as a whole, sale of 10% or more of fxed assets, investments in excess of 10% of total assets, expenses in excess of 10% of total assets, i) determination of the Company’s dividend policy and the amount of dividend to be distributed. j) capital increase or decrease. 23.6. Meetings and travel expenses of the Board of Directors, special studies it may request in relation to it duties and related expenses are paid out of the general budget without any restriction. 23.7. According to the Articles of Association, members of the Board of Directors do not have weighted voting and/or veto rights. back to top
24. Restrictions on Dealing and Competing with the Company According to the Articles of Association, Members of the Board of Directors are not allowed to deal or compete with the Company. An exception can be granted at the General Meeting of Shareholders upon the afrmative vote of shareholders who represent at least three-fourths of the capital. In 2008, no Board Member, executive or controlling shareholder, including those who may have access to insider information, conducted business in the Company’s line of business on behalf of themselves. back to top
25. Ethical Rules Hürriyet adheres to the “Values” it has announced in its website and annual report, as well as the “Editorial Principles” announced to the public by Doğan Yayın Holding. In addition to these rules, the Company has also adopted the Code of Conduct of Doğan Yayın Holding, with which all Doğan Media Group personnel should comply. Doğan Holding Editorial Principles and the Code of Conduct are available on Doğan Yayın Holding’ website at www.dyh.com.tr. back to top
26. Number, Structure and Independence of the Committees Constituted by the Board of Directors
26.1. in line with the Company’s current position and needs, an Audit Committee, a Corporate Governance Committee, an executive Committee and a Coordination Board have been established to ensure that the Board of Directors properly fulfls its duties and responsibilities. 26.2. the charters of the Audit Committee and the Corporate Governance Committee have been approved by the Board of Directors and are available at www.hurriyetkurumsal.com. these charters have been carefully designed in light of the Capital Markets law, CMB Regulations, the principles, the Articles of Association as well as practices in other countries; both committees meet on a monthly basis. 26.3. information on the Audit Committee established by the Articles of Association: 26.3.1. The Audit Committee consists of the following members:
26.3.2. According to Section IV/5-4 of the Principles, individuals who are not Board Members but are considered experts in their felds can be appointed to the committee. The Chairman of the Audit Committee is not an Independent Board Member. However, her position complies with CMB regulations because she is a non-executive member. 26.3.3. The Board of Directors held a meeting on May 29, 2008 and decided that H.Hasan Yılmaz and Soner Gedik, Board Members who are concurrently Committee Members Responsible for Auditing, be reelected and authorized to perform the duties specifed in the Capital Markets Board Communiqué Series X, No. 16. 26.3.4. All members of the Audit Committee are non-executive Board Members. 26.3.5. The Audit Committee makes regular eforts in compliance with capital markets legislation and in light of the CMB’s Corporate Governance Principles. In this regard, in 2008: » The Company’s fnancial statements and their footnotes, as well as the independent audit report of the previous year were reviewed prior to their public disclosure and meetings were held with the Independent Audit Firm, » The Company’s independent audit contract was revised, » Results of the internal controls performed by the Internal Control Department and the measures taken have been reviewed, » Emphasis was given to risk management activities. ? The Audit Committee held four meetings during 2008. 26.4. information on the Corporate Governance Committee established by the Articles of Association: 26.4.1. According to Board Decision No. 2008/36 dated September 23, 2008, the Corporate Governance Committee shall consist of the following chairperson and members:
26.4.2. Corporate Governance Committee Member Murat Doğu is also a Member of DYH Corporate Governance Committee. 26.4.3. More than half of the committee members are non-executive. 26.4.4.Since its inception, the Committee has been continuing its activities in a regular manner In this regard: » Corporate governance rating studies were carried out, » Corporate governance compliance reports prepared by the Company were reviewed, » Annual reports prepared by the Company were reviewed, » It was ensured that the Ordinary General Meeting of Shareholders, where the activities of 2008 were discussed, was held in compliance with related legislation and principles, » It was ensured that relations with shareholders and investors are pursued in compliance with related legislation and principles, » Public disclosures of the Company were reviewed, » The website was regularly updated and improved. » The Corporate Governance Committee held six meetings during 2008. 26.5. The executive Committee has been established pursuant to Article 19 of the Articles of Association as follows: “the Board of Directors shall form and appoint an executive Committee comprised of a sufcient number of members in order to ensure that the Company’s activities and transactions are performed in accordance with the work program and budget it has determined. the appointment decision shall specify in detail the authorities of the executive Committee and their limits. The Chairman of the executive Committee shall be authorized to manage and direct the activities of the executive Committee and the Company and shall be elected from among the directors. However, the Chairman of the Board of Directors may not be elected Chairman of the executive Committee at the same time. in electing the members of the executive Committee, the Board of Directors shall take into account the suggestions and proposals of the Chairman of the executive Committee. The executive Committee shall meet upon the invitation of its Chairman at intervals required by the Company’s business. Company executives and third parties approved by the executive Committee Chairman may also attend the meetings. All activities of the executive Committee shall be put into writing and in each meeting of the Board of Directors, the Chairman of the executive Committee shall provide information about the work of the committee.” Accordingly, the Board of Directors resolved to appoint Vuslat Doğan Sabancı as Chairman of the executive Board (executive Committee), and the following as executive Board Members with the particular responsibilities: ertuğrul Özkök for editorial issues, Ayşe Cemal Sözeri for the Advertising Group, Ahmet toksoy for Financial Afairs, Ayçin Bayraktaroğlu for Marketing Afairs, Ahmet N. Dalman for Hürriyet information technologies, Ahmet Özer for internet Group. The executive Committee, which is comprised of executive Board Members and group heads, meets weekly or at least once a month.
26.6. The Company’s committees act within their authorities and responsibilities and make recommendations to the Board of Directors. All fnal decisions are taken by the Board of Directors. 26.6.1. The Company’s committees document all of their work in writing and keep a record of them. 26.6.2. The Company’s committees submit their annual operation reports in writing to the Board of Directors. 26.6.3. All managers of technical and administrative departments in the Company regularly generate workfow reports every month on what was achieved in, and planned for, the month to be submitted to their Group Leaders. These reports are then presented to Executive Board for approval. 26.6.4. Penalties to be applied in cases of losses arising from the failure or underperformance of managers serving in the technical and administrative organization are specifed in the Personnel Regulation. back to top
27. Remuneration of the Board of Directors
27.1. the Chairman, Deputy Chairman and Members of the Board of Directors are paid remuneration as decided upon by the General Assembly of Shareholders. the decision regarding this remuneration is based on the time Board Members spend for meetings and the time involved in pre and post-meeting preparations and the duties assumed, as well as the CeO’s salary. the attendance fee to be paid to Board Members for each meeting is also decided upon by the General Assembly of Shareholders. Whether the chairmen and members of the committees are to be paid any fees and the amounts and conditions of such fees, if any, are decided by the Board of Directors together with the resolution regarding the establishment of the particular committee. if the chairman and members of a committee are at the same time the chairman or members of the Board of Directors, it is the duty of the General Assembly of Shareholders to determine whether they are to be paid any fees and the amounts and conditions of such fees, if any. 27.2. At the Ordinary General Assembly Meeting of Shareholders held on May 29, 2008, it was unanimously resolved that the Chairman of the Board of Directors be paid a monthly net fee of ytl 7,500, the Deputy Chairman a monthly net fee of ytl 6,000 and Members of the Board a monthly net fee of ytl 5,000 each. Furthermore, it was resolved that independent Members Hakkı Hasan yılmaz, M.Cem Kozlu and Kai Georg Diekmann each be paid a monthly net fee equal to the ytl equivalent of US$ 5,000. there exists no additional bonus mechanism based on performance for members of the Board of Directors. No loans or credits are extended by the Company to any of its Board Members or executives, either directly or indirectly. back to top
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