EBRD calls for more women on corporate boards in Türkiye

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  Türkiye below average in women’s representation on company boards
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  EBRD-led workshop brings stakeholders together for proposed action
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  Better regulation, reporting, incentives needed for gender equality on boards

The number of women in company boardrooms and senior management in Türkiye is well below global averages. To improve this, a range of policy actions are needed, such as better regulation, reporting, incentives and supporting policies.

With this in mind, representatives from business organisations, regulators, relevant ministries and academics came together recently in Istanbul for the concluding session of a workshop led by the European Bank for Reconstruction and Development (EBRD) and hosted by the Union of Chambers and Commodity Exchanges of Turkey (TOBB). Participants were there to review the regulatory framework related to women’s representation on the boards of Turkish companies and senior management, and propose regulatory reform to bring the numbers into line with the local context and international best practices.

The workshop is the first implementation activity under the related roadmap developed in 2021 with the EBRD’s assistance and approved by a multi-stakeholder Steering Group.

Discussions highlighted the persistent low representation of women in corporate decision-making in Türkiye, which is far below the OECD average of 33.2 per cent. Among the 475 companies traded on Türkiye’s stock exchange Borsa Istanbul, only 17.5 per cent of board members are women and 158 listed companies are governed by all-male boards. Out of Borsa Istanbul’s largest 100 companies, 21 have no women on their board. Only 3 per cent of the listed companies have a female CEO.

Sule Kilic, the EBRD’s Deputy Head for Türkiye, stressed that gender equality was one of the key priorities for the Bank: “We are committed to an inclusive future in Türkiye. We work in close collaboration with our partners and clients to promote women’s economic inclusion and equal representation, especially in leadership positions.”

She pointed out that economies were tested frequently against global shocks, and that sound decision-making was key in overcoming crises.

“No effective decision-making can exist without a diverse and inclusive leadership. We believe that tapping into the vast potential of women as business leaders makes businesses more resilient, innovative, environmentally conscious and better at serving their consumers. We support enhanced diversity at board and top management level. Numbers prove beyond doubt that Turkish companies must improve on this account.”

Several areas for regulatory improvement were identified by the participants, including mandatory targets for more advanced segments of the capital market, changes to the reporting regime, incentives and enforcement measures.

The workshop’s underlying principle was that a dialogue between the private sector, regulators and other rule makers is integral to designing legal and regulatory instruments that foster women’s participation in economic decision-making and promote an inclusive leadership.

Participants also highlighted the recently approved European Council directive, which calls for at least 40 per cent of non-executive director positions in listed companies from European Union member states to be held by members of the under-represented sex by 2026.

It was noted, however, that regulatory instruments were only one part of an effective environment and that companies needed to adopt better nomination policies, training, mentorships and support mechanisms that strengthen gender equality across all levels and attract and retain female talent. Financial institutions were also encouraged to provide incentives to companies where gender equality was promoted and acted upon as a priority.

TOBB board member Cengiz Günay said: “We, as TOBB, are happy to be hosting this project, which aims to increase women’s representation on company boards.”

He continued: “We have been working intensely since 2007 to increase the participation of women in business, and to strengthen their position within society. We lead many projects across the 81 cities of Türkiye in collaboration with national and international stakeholders. Increasing women’s employment and women’s representation at decision-making levels are key priorities of our TOBB Women Entrepreneur Councils. We aim to bolster the visibility of women entrepreneurs in the country, and we take this ambition very seriously. 

“We approach the proposals of this workshop in a very comprehensive manner. I would like to thank the EBRD for keeping this important cause visible, and for providing financial support for these studies. I would also like to thank the EBRD’s Managing Director for Türkiye, Arvid Tuerkner, and all EBRD employees.”

The workshop was led by the founding director of Sabancı University Corporate Governance Forum, Professor Melsa Ararat. Participants were from the Ministry of Family and Social Services, the Ministry of Treasury and Finance, the Ministry of Labour and Social Security, the Ministry of National Education, the Ministry of Trade, and Presidency of Strategy and Budget. Other attendees included members of finance and business associations such as the Banks Association of Turkey, the Turkish Industry and Business Association, TOBB, the Banking Regulation and Supervision Agency and the Capital Markets Board of Turkey.

The EBRD is the leading institutional investor in Türkiye, with nearly €17 billion invested in 390 projects. The Bank support companies through tailored finance and technical advisory services to increase the share of women across their operations, in line with the EBRD’s Strategy for the Promotion of Gender Equality (SPGE) 2021-25. In 2022 the EBRD worked with over 20 clients to adopt new corporate practices that strengthen women’s empowerment and economic participation in Türkiye.