DECOUPLING THE GRANT OF FINANCIAL AND EXECUTIVE DISCHARGE TO THE BOARD OF DIRECTORS IN STOCK CORPORATIONS (original) (raw)

2021, Uluslararası Necmettin Erbakan Hukuk Kongresi, Necmettin Erbakan Üniversitesi, Konya Nisan 2021, Bildiri (Tam Metin) Kitabı

Discharge means “acquittal, exoneration” and releases one from civil liability. In the context of 6102 numbered Turkish Commercial Code (TCC), discharge of board of directors from liability is a statement delivered at the shareholders’ meeting through a resolution that the stock corporation shall not claim any damages from the board in connection with the management of the corporation, during the process in which the board reports its actions for the relevant financial period. Discharge resolution may be in the form of an explicit or implicit discharge and an explicit discharge resolution may be in the form of a general or specific discharge. If a discharge is limited in terms of person, time, and transactions, it is accepted as a specific discharge. Still, the Yargıtay 18. H.D. E. 2012/14591 K. 2013/3764 T. 12/03/2013 case (in the context of associations) provides that the grant of financial discharge shall be inclusive of the grant of executive discharge, and that it is not possible to accuse a board with no financial fault, of an executive fault. When considered in the context of stock corporations, the fact that financial records of a company are correct does not necessarily mean that the board has directed the company prudently. For example, even though financial records may seem correct and accurate, it is possible that the company is made subject to tunnelling. All in all, rejection of an executive discharge would signal a dissatisfaction concerning the board members’ administration and may lead to an election. When TCC Art. 558(2) is considered together with TCC Art. 340, it should be accepted that articles of incorporation may also include articles on aforementioned separation, and that the abovementioned case precedent shall not be applicable.