CORPORATE GOVERNANCE NOTE
CORPORATE GOVERNANCE NOTE
EASTPHARMA CORPORATE GOVERNANCE NOTE
The Board is responsible to the Company’s shareholders for assessing and managing all kinds of risks to provide entrepreneurial leadership of the Company. The Board provides required internal controls and set the Company’s strategic aims in order to achieve Company’s objectives through properly set financial and human resources. The Board meets at least four times annually. Among the key matters on which the Board alone may make decisions are the Group’s business strategy, its annual budget, dividends, and major corporate activities. It is also responsible for reviewing the Company’s internal controls and governance system and for approving the Company’s Standards of Business Conduct. The Board delegates to the Senior Management Team responsibility for overseeing the implementation by the Group’s operating subsidiaries of the policies and strategy which it sets, and for creating the conditions for their successful day-to-day operation. The Board consists of Philipp Daniel Haas (Chairman), Mesut Çetin (Vice Chairman), John Coombe-Tenant (Independent Member), Christoph Sven Hoffmann (Independent Member).
The by-laws of the Company provide for the following committees: Audit, Nomination, and Remuneration. The Board has the authority to form any new committee or dispend any current committee.
The audit committee is chaired by John Coombe-Tennant Christoph Sven Hoffmann as member.
The nomination committee is chaired by Philipp D. Haas with Christoph Sven Hoffmann as Vice Chairman.
The remuneration committee is chaired by Christoph Sven Hoffmann, with John Coombe Tennant as Vice Chairman.
The roles of Chairman and Chief Executive are separate, with each having distinct and clearly defined responsibilities. The Chairman is responsible for leadership of the Board, ensuring its effectiveness and setting its agenda, and for ensuring that a clear business and financial strategy for the Group is formulated for recommendation to the Board. Once agreed by the Board as a whole, it is the Chief Executive’s responsibility to ensure delivery of the strategic and financial objectives. He is also responsible for representation of the Group externally.
The Board has four Directors, of whom two are independent directors. The number of directors in the Company’s Board cannot be less than 2 and exceed 10 (ten) according to the Company’s bylaws.
The Board considers that two of Directors are independent. Christoph Sven Hoffman and John Coombe Tennant are independent directors. The Code recommends that the board of directors of a listed company should include a balance of executive and non-executive directors (and in particular independent non-executive directors) such that no individual or small group of individuals can dominate the board of directors’ decision taking.
In particular, the Code states that at least half of the board of directors, excluding the chairman should comprise independent non-executive directors. The Code states that the board of directors should determine whether a director is independent in character and judgment and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the director’s judgment.
The valuation of the performance of the Board, its Committees and its individual Directors are subject to annual performance targets set by the Remuneration Committee being met. The compensation of the directors is determined by the shareholders at the annual general meetings. Other than this there is a separate Remuneration Committee. All Directors are subject to election by the shareholders at the first Annual General Meeting after their appointment. The compensation of the directors is determined by the shareholders at the annual general meeting. Currently each director is being paid a certain amount of annual remuneration which is paid in monthly installments. The amount of remuneration is reviewed annually by the remuneration committee. Subject to annual performance targets set by the Remuneration Committee being met, the directors may also be entitled to bonus payment.
It is the policy that a Chief Executive Officer’s and Vice Chairman’s one year rolling contract incorporates a provision for a termination or compensation payment in lieu of notice. The notice period required to terminate the above-mentioned service agreement is 12 months from both parties. If the company terminates the above mentioned service agreement at a date earlier than foreseen than the Chief Executive Officer/Vice Chairman will be entitled to a certain amount of severance payment. The Board is responsible for the overall system of internal control for the Company and its subsidiaries and for reviewing the effectiveness of the system. It carries out such a review at least annually, covering all material controls including financial, operational and compliance controls and risk management systems, and reports to shareholders that it has done so.
The Board’s obligation to establish formal and transparent arrangements for considering how it should apply the financial reporting and internal control principles, and for maintaining an appropriate relationship with the Company’s external auditors, Ernst&Young (Güney Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik AŞ) , is met through the Audit Committee.
The Audit Committee’s terms of reference are available from the Company Secretary. The Audit Committee considers and makes recommendations to the Board, to be put to shareholders for approval at the Annual General Meeting, in relation to the appointment, re-appointment and removal of the Company’s external auditor. The Committee oversees the selection process for new auditors and if an auditor resigns the Committee investigates the issues leading to this and decides whether any action is required The Board maintains a dialogue with shareholders, directed towards ensuring a mutual understanding of objectives. Its primary contact with shareholders is through the Chief Executive and Finance Director, but the Chairman and Chief Operating Officer also maintain contact with major shareholders either through Investor Relations or by themselves in order to understand their issues and concerns.
The concerns of some of the institutional shareholders are voiced by the board representatives elected by them; the other shareholders are represented by independent directors in the board. The Investor Relations has a major role in maintaining relationships with current and potential shareholders.
The Annual General Meeting is the principal opportunity for the Board to meet a wide range of investors and for the Chairman to explain the Company’s progress and receive questions from its owners, the shareholders. The breakdown of Annual General Meetings that took place until today is as follows:
General Assembly Meeting for 2015 09 December 2015
General Assembly Meeting for 2014 30 December 2014
General Assembly Meeting for 2013
21 January 2014
General Assembly Meeting for 2012
22 January 2013
General Assembly Meeting for 2011
30 December 2011
General Assembly Meeting for 2010
21 December 2010
General Assembly Meeting for 2009
23 December 2009
General Assembly Meeting for 2008
22 October 2008
The Company may, in accordance with its Articles of Association and best practice, provide for the vote on each resolution to be by poll, using its Registrar’s electronic voting system, rather than by show of hands.
The Notice of Meeting and related papers are sent to shareholders at least 21 working days before the Annual General Meeting.