About the Project


Aim of the Project  

The Capital Markets Board of Turkey (CMBT) has called a rulling in 2012 for listed companies to have 1/3 of their board members independent. In addition, a change in the CMBT’s Corporate Governance Principles requested the listed companies to include at least one woman in their boards based on ‘’comply or explain’’ approach. Unfortunately the expansion of boards due to the independence requirement caused the ratio of women in listed companies to decrease to 11.7 % in 2013 from 11.5 % in 2012.

Sabancı University (SU), with the financial endorsement of General Consulate of Sweden in Turkey and in strategic partnership with Egon Zehnder International Turkey, has initiated the “Independent Women Directors (IWD)” project. The project aims to help companies to give priority to women when nominating independent directors and hence help them to realize both mandates at the same time. 

Within the framework of IWD project, an inventory of women who are board ready will be developed alongside a methodology to be used in matching companies and board ready women. This inventory will be shared with interested companies and three of them that commit to give priority to women for independent director roles will be identified as pilot companies to benefit from a comprehensive matching service at no cost.

The background of the project

Legal requirement of women quotas for corporate boards in some European countries like Norway has created a natural environment to observe the affect of women directors on financial performance. These observations led to the formulation of an EU legislation proposal calling for 40 % of non-executive board members to consist of women by 2020.

"Women Matter’’ research conducted by McKinsey&Co. in 2007 showed that most gender diverse companies enjoyed 10% better ROE and  48% better EBIT between 2003 and 2005 compared with their industry average and 1.7 times more stock price growth between 2005 and 2007 compared with benchmark indices. The difference between the highest and lowest ranking companies with respect to gender diversity of their boards was reported to be even higher; best-ranked companies on organizational performance tend to have an operating margin and a market capitalization more than twice as high as those of the lower-ranked ones.

Other studies have also revealed that women are more stakeholders oriented and have a positive impact on companies’ environmental and social performance. Additionally existence of women in the boards increases the motivation of female employees, improve the corporate image and company’s attractiveness for investors.

Diverse boards make better decisions in Turkey as well. Research conducted by Sabancı University Corporate Governance Forum showed that there is a cause and effect relationship between diversity of boards and company performance through increased effectiveness of audit and control functions.

Despite scientific evidence of positive impact of women directors on financial and non- financial performance, the ratio of non-family related, professional women directors is only 4.9 % and that of independent women directors is 1.8 % in companies listed in the ISE. Corporate boards in Turkey usually consist of members who are acquainted with each other through family ties and previous work experience, and display, therefore, a homogeneous look.

Giving priority to women in nominating independent directors will surely help to reverse the deteriorating effect of the independent director quotas on the ratio of women directors on the boards of ISE firms in 2015.