Independent directors to ensure that the company is on the right path

As of 30th of December 2012, Capital Markets Board of Turkey (The CMB) issued a new set of Corporate Governance Principles requiring at least two "independent directors" at the board level. The new principles aim to regulate the corporate governance practices for ISE Listed Public Companies. Also as of last week, corporate governance principles of CMB have been revised and attached in the Serial IV, No: 57. According to the CMB Communiqués No: 56 and No. 57 on Corporate Governance Principles, one these directors will head "Audit Committee" the other will head "Corporate Governance Committee" and both having veto rights for important decisions (sale/purchase/lease/rent of assets large contracts, contracts wit related parties). As per the Communiqué, ISE Listed Companies are required to adapt their articles of association in the first ordinary general assembly meeting to be convened not later than June 30, 2012, which means that companies have a period of approximately three and a half months to nominate the candidates.

Going Independent
By "independent directors", the regulator means;

• resident and tax payer ( by Income Tax Law 193)
• not (employed by /invested in /traded with/ provided services to ) the company & related parties (IAS 24), neither his 3rd degree relatives can have, for the last 5 years.
• not (employed by/invested in) the audit companies, rating agencies, advisors of the company for the last 5 years.
• not acted as the member of the board for more than 6 years in the last 10 years.
• these directors will be elected for 3 years.

If your company currently does not have qualifying "independent director" or does not plan to go private soon, she should consider the last day for calling General Assembly, as the end of May 2012 leaving 3-4 months to identify a search company, review candidates, make interviews, and make an offer, etc.

Decisions related to functioning of the committees, board procedures will also require some time and dedication.

Classification of ISE Companies
The new set of principles divides the companies into three main classes:
I- ISE Companies with market value exceeding TL 3,000,000,000 and free float value exceeding TL 750,000,000;

II: ISE Companies with market value exceeding TL 1,000,000,000 and free float value exceeding TL 250,000,000, and,

III: All other ISE Companies which do not fall under the classes above.

Companies stated in I are required to comply with all mandatory CGPs whereas companies in II and III benefit from certain exemptions. As per the Communiqué, ISE Listed Companies (I and II) are required to adapt their articles of association in the first ordinary general assembly meeting by latest June 30, 2012. The candidates will then be sent to the CMB by latest May 15, 2012. The list of candidates will be approved by CMB by May 31, 2012. The specified dates above are valid for the first and second group of companies above.

The adaptation period for the third group is slightly different as for the dates of candidate nomination and announcement by latest June 6, 2012 and the last general assembly meeting date June 30, 2012.

Public Banks only, are subject to the communiqué as at the end of this year.

Selection procedure and the search process
In recruiting directors from outside the company (and outside the family) companies will find value in a variety of areas such as independent perspective as well as outside skills and experience.

The new set of Corporate Governance Principles precisely define the roles, qualifications, functions, duties, responsibilities of an independent director. Accordingly, an independent director must keep in mind the interest of all stakeholders. For truly independent directors, they have to be nominated by independent organizations. Corporate board work has become an increasingly significant area of MKG&Partners' search practice. The following represents an outline of our approach to board searches.

I. We conduct an in-depth discussion with our client concerning their board philosophy, their immediate director needs, and what will be required in three to four years. Included would be the size and composition of the board, desired industry representation, functional expertise, age, minorities, education and geographic backgrounds. A written specification is then prepared to summarize this discussion and to serve as a blueprint for the search.

II. Through our research departments, contacts with our established sources and other means, we develop names of qualified prospects, along with their backgrounds and experience. Any suggested names by the client would be incorporated for further research. A list of key prospects is then presented to the client.

III. This list is reviewed with the client and the nominating committee in order to determine and prioritize three or four primary candidates. We then conduct further checks to obtain as much updated information as possible.

IV. At this time, we determine the best way the candidates are to be approached, i.e., by the client, by a member of the nominating committee or by MKG&Partners. The initial conversation with the candidate should include discussion of what is expected of a director, board meeting dates, committees, compensation model, etc.

V. Once the preferred candidate has been selected, the client and the nominating committee should meet with him or her to extend an invitation to join the board.

The purpose of an independent board is to make sure members are not influenced by interests in the company. They are there specifically to help a company run honestly and efficiently.

Executive Search is most effective when the candidate population is defined. MKG&Partners recruit management and hard to find positions exclusively for the knowledge based sectors and functions. As specialists, MKG&Partners understand the market, the companies, the functions and have the extensive contacts needed.

Our experienced consultants and research teams find the most qualified positions that offer the best matching specifications for both candidates and companies. MKG&Partners' search process is extremely detailed and client focused. We establish client relationships carefully, study their corporate cultures thoroughly and analyze candidate profiles rigorously to ensure cultural compatibility and a successful match. We have a wide network of top level professionals and know where to find leadership talent. We work as a team, with our clients, to overcome challenges and boundaries of technologies, skills and industries. We are fully aware of the fact that, to lead companies successfully, executives must deliver their leadership skills within the unique cultural framework of their organizations and that the final yardstick of our performance is the long-term contributions made by the executives we place.

Our success stems from sourcing and persuading the very best people to work for our clients. Thorough knowledge of specific industries is essential to MKG&Partners as well as to the clients, since we form teams to function in synergies to leverage industry and position knowledge on clients' behalf. This team-work often in partnership with human resources and line and management personnel, results in a clear understanding and evaluation of requirements, expectations, and our ability to respond effectively. We enjoy the return of satisfied clients. Candidates and clients trust MKG&Partners, because we deliver more than we promise. That's why we have long lasting partnerships with our clients.

Leadership Audit is the Right Tool for Strategic Change - Linking Leadership to Strategy.

You need leaders that not only understand your strategy, but also have the management capabilities needed to attain it.

What is its purpose?

• Objective and professional evaluation of leadership
• Utilises validated, structured and thorough methodology
• Aligns leadership talent with the business and cultural imperatives of the Company
• Platform to measure the impact of leadership

Reason for Use

• Mergers and Acquisitions
• Reorganisations
• Due diligence
• New CEO
• Culture change
• Shortened delivery time for leaders
• People development
• Downsizing

LEADING THE WAY

The ability to map a strategic course and move your organisation a1ong it is the critica1 test of leadership on every level. It is the key to your organisation's surviva1 and prosperity. Equally vital is the ability to quickly alter course in response to - or ahead of - changing externa1 factors like markets, technology or competition.

But strategically directed change is the most challenging. The way your leaders lead determines where your organisation goes and how it gets there. And unless you change leadership practices so that they align with your strategy, your leaders won't all pull in the same direction, much less the right one.

The leadership practices your people need to demonstrate depend on your organisation's strategic objectives and their roles in the organisation. If you don't want your people to go in one direction while your strategy goes in another, you need a model of leadership rich enough to account for the full range of leadership practices and behaviours, and a way to identify the practices and behaviours each team member needs to exhibit.

The Leadership AuditTM provides just such a process. And, in addition to measuring your current leadership capabilities, you can easily use the information gathered during the Audit to create targeted development and training plans, ensuring the long term results you want and need.

A strategic view of leadership creates the leaders you need to take your organisation where it wants to go. This strategic approach:

• begins with your business objectives and enables you to identify the specific leadership practices needed to achieve them.
• provides you with information and insight about your current leadership team in a uniquely powerful and comprehensive way.
• is grounded in research and proven models for effective leadership practices
• makes your leadership expectations clear and credible - and that is critical to creating the leadership culture you need to reach your business goals.

UNIQUE SOLUTIONS FOR UNIQUE ORGANISATIONS
The leadership challenges your organisation faces are unique. They are shaped by its current culture, people, environment, history, opportunities and objectives. You need a customisable approach that builds on your past and targets your future.

Research has shown that there's no one right way to lead. Effective leadership is a matter of demonstrating the balance and emphasis that's right for the role and right for the business objectives.

AN ASSESSMENT BASED PROCESS

To Define and Measure your Capabilities

DEFINING LEADERSHIP REQUIREMENTS
The first critical step is to define the leadership practices that are critical to achieving your business objectives. Using MRG`s Strategic Directions process, your top team identifies the few critical behaviours needed to create a leadership culture aligned with your strategy. This creates the template of leadership practices that is right for your organisation.

You can also define the leadership profile needed for specific roles in your organisation. The Role Expectations process helps you define the key leadership practices critical at the role level.

ASSESSING CURRENT PRACTICES

Two powerful assessment tools, the Leadership Effectiveness AnalysisTM and the Individual Directions Inventory, combine to provide objective, persuasive insights into the leadership practices of your current management team. The Leadership Effectiveness AnalysisTM (LEA) measures current leadership behaviour, while the Individual Directions Inventory (IDI) defines the underlying motivators, values and attitudes that are driving the behaviour. Based on the in-depth information provided by these two assessments, you can conduct targeted, structured interviews to gain the accurate insights required to make the right decisions about your fixture leadership team.

DEFINING ORGANISATIONAL IMPLICATIONS

Next you need a composite picture of how your organisation stacks up against your goals. Using advanced statistical techniques, we can provide you with an overall picture of your current leadership capabilities and how those capabilities compare to the practices you defined as critical during your Strategic Directions and Role Expectations processes. In addition, we can compare your leadership profile with effective leadership practices in your global industry.

VALIDATION STUDIES

When making critical decisions about your people, you need to feel confident that you are using an assessment process based on extensive research, one that is well grounded and defensible. Our team of experienced consultants and organisational psychologists can work with you to perform a Validation Study that identifies which leadership practices differentiate the most effective leaders in your organisation. The rigorous nature of the validation process verifies that decisions are being made on job relevant criteria. Validation studies can be customised to ensure that you are meeting the appropriate employment laws and guidelines in the countries in which you are doing business.

WHY THE LEADERSHIP AUDIT WORKS

THE REWARDS OF RESEARCH

The model of leadership used in the Leadership AuditTM is the outcome of lessons learned from 35 years of research and more than 250,000 assessment-based profiles of leaders across a wide range of

industries, organisaxions and roles, and countries. Results are generated by questionnaires that have been rigorously developed and psychometrically validated. The data they provide are highly accurate and truly useful.

A GLOBAL PERSPECTIVE

Support is available where and when you need it - from local consultants in local languages. The questionnaires have been translated into many major languages and norms are available for many specific countries and geographic regions. The translation work is has started for Turkish and the tool is currently deliverable in all other major languages.

PRACTICAL BENEFITS

Taking a strategic view of leadership allows you to highlight each individual's strengths in light of your ideal leadership culture, making the changes you require seem both understandable and achievable. It also allows you to leverage your organisations development and training efforts in the areas that will have the most payback for you. Objective measurement tools track organisational and individual progress. Because of the clear link with current initiatives and business strategy, a foundation is created for meaningful organisational interventions and individual development planning.

Strategic Leadership DevelopmentTM (SLD)

Strategic Leadership DevelopmentTM is an integrated process to develop leaders at all levels in the organization and align their leadership practices with the organization's business strategy. Each of the components of SLD are based on MRG's leadership assessment: the Leadership Effectiveness AnalysisTM.


Define Leadership Requirements

Strategic DirectionsTM... Identifies the leadership practices that will be required in order to achieve the organization's strategic business objectives. Role ExpectationsTM... Defines the leadership behaviors required for effectiveness in a specific management/leadership position.
Assess Current Practices

Personal Feedback Profile... The Leadership 360^® report provides individuals with developmental 360-degree feedback on their behavioral leadership practices; the Leadership Self report provides comparable information from a self-only perspective.
Leadership CultureTM... Identifies the prevailing leadership practices within the organization, and describes how leaders are currently fulfilling the leadership aspects of their roles.

Assess Organizational Implications

Group Composite Profile... Describes the behavioral profile of a specific leadership team or group; can be used to conduct a training needs analysis or for leadership team development.
Strategic Directions AuditTM... Analyzes the gap between current leadership practices and the critical leadership behaviors that will be required in the future.
Best Practices Report... Identifies the management/leadership practices that characterize the most effective leaders in the organization.

Develop Strategically

Strategic Leadership PracticesTM... Coaching modules to develop the leadership behaviors measured by Leadership 360^®; can be delivered either in a group session or through one-on-one coaching.

Reassess Leadership Practices

Personal Feedback Profile... Administered 12 to 18 months after the initial assessment, Leadership 360^® enables individuals and the organization to measure progress and set new developmental goals.

MRG SLD products:

• are scientifically validated and highly reliable
• offer country-specific norms drawn from an extensive global database
• are available in multiple languages
• offer an electronic delivery option

Executive coaching is one-on-one coaching for senior professionals and executives to enhance organizational performance, organizational development and communications, to increase their value to themselves and their organization.

EXECUTIVE DEVELOPMENT PROGRAMME (EDP)

It is important to bear in mind that although there is a process, each program is tailored to the specific situation, needs and circumstances of the individual.

The process essentially has four major steps.

1. Initial Stock Take and Contracting Phase
During this phase the goals are to develop a mutual understanding of the process and expected outcome; clarify the issues; timeframe the coaching and agree on timeframes and confidentiality constraints. Both the employee and individual need to be fully supportive of the process and have a joint commitment to making it work.

2. Assessment and Action Planning
This part of the programme examines the individual’s work history, performance patterns and personal goals. Assessment instruments are used to clarify the employee’s skills, leadership abilities, interests, values and interpersonal styles. When appropriate, 360 degree feedback is used. Regular meetings are scheduled between the two parties. Ideally, these should be two hourly meetings at approximately 10 day intervals.

3. Implementation of Action Plan
Following the assessment work, feedback is provided to the individual. Recommendations are made and specific action plans agreed. Situations are created for the individual to practice in the work setting.

4. Conclusion and Follow-up
As the action plan progresses, changes are monitored by both consultant and client. The process is usually concluded in six months, but the individual has an open line on a continuing basis to discuss any issues or problems that may arise. If the odd meeting is required thereafter, it is conducted at no additional cost. However, a final meeting is held to debrief the entire Executive Coaching process, bring closure, identify what has been accomplished and discuss any follow-up needs.

A typical program will consist of approximately 25 hours of one-to-one counseling time, of which roughly half this time is spent in the diagnostic/assessment phase.

Personal Directions^®

Organizations are in a state of constant flux, reacting to a rapidly changing global marketplace. Individuals are changing as well. They face the challenges of dual career families, multiple careers over the course of their working years, possible early retirement, and a growing need to balance work, family, community and personal interests.
Personal Directions^® is a unique and powerful assessment tool designed to be used by coaches and counselors in order to explore career development and personal growth issues with their clients. It provides individuals with rich and insightful feedback that helps them explore their motivations, examine how these have affected the choices they have made in different areas of their lives, and consider what actions they might wish to take in the future. Personal Directions® can help individuals align their personal strengths with their job roles and responsibilities in order to increase their effectiveness and enhance their satisfaction.
Personal Directions^® is a versatile tool that can be used for many consulting applications:

• Executive development
  
• Career development for people at all levels
  
• Personal growth planning and work/life balance issues
  
• Pre-retirement planning
  
• Coaching/personal assistance for anyone in transition

 

Interim Management is a special service within MKG&Partners that focuses on the search for and provision of senior executives for as long as they are needed, to help clients respond quickly and effectively to change, opportunity and uncertainty.

Clients gain access to top level executives on an 'as needed' basis; individuals who often are not available on a permanent basis. These are individuals who "make things happen"; they are not advisers; they go in, do the job and go away again. For example, during start-up or growth phases, we can provide executives to assist with new ventures, product/service development, rapid expansion and acquisitions. By their very nature, these individuals bring a fresh perspective and sense of objectivity, to the company.

Interim Management assignments follow essentially the same process as standard searches do.

Firstly, the client decides whether an interim executive is needed. This means striking a balance between need, benefit and cost. We are always available to discuss and guide our clients through this process.

Once the need is identified, we interview our clients to discuss the real issues and tasks facing the interim executive and define the profile of the ideal individual for the position. We use this discussion to come up with a target list of candidates and from this a short list is prepared.

A consultant interviews and assesses each interim executive candidate and, before being put forward, each is referenced. The client is then given a choice of candidates, who are all sensibly over-qualified, so that an interim can be selected who not only meets the brief, but who will work well within their corporate culture.

Both client and candidate are contacted during the first week of the placement and monthly afterwards to ensure that things are going as planned.

In order to ensure the success of such a project:

• We are client-focused not candidate driven
  
• We cover every business sector and operate internationally
  
• We use full search techniques - not just in our database of potential or known interims, but by having access to executives who are leaving or have recently left a permanent role and could be attracted by interim roles.
  
• We have a vast pool of candidates available to us, all of whom have a substantial track record in the area in which they are needed

The typical Interim Management interim executive

Interim Management Executives are all senior level managers, who have proved themselves to be successful at senior levels. They are selected, not only on the basis of technical skills and experience, but on their leadership skills.

The Typical Interim Executive is usually :

Age:
- 35 to 60 years of age

Personal Characteristics:
- Practical
- Hands- on
- High Energy
- Flexible
- Good Communication and Listening Skills
- Culturally flexible

Interim executives are of two types: permanent and temporary.

• Permanent interims are attracted by the challenge, excitement and rewards
  
• Temporary interims are filling time between permanent assignments [and often remain interim managers by choice]

Every environment has diverse conditions and these conditions change over time. In MKG&Partners we believe that if an organization has a need for improvement, it is necessary to identify the specific need and to invent the right solution.

Usually, problems or needs are defined differently by different parties involved within a same organization. Therefore, any process intervention should start with a 360° assessment that allows us to understand the perception of all related parties.

Once a thorough awareness is achieved, then it is time to create a solution which satisfies the needs of everybody. We believe that tailor-made interventions collect broader commitment and have more long-lasting impact.

Part of our service incorporates the understanding and the strategy setting and, part of it requires the implementation of the strategy. Once a solution has been identified and all the related parties are committed, then we provide the development and execution of the solution. In some instances we are directly involved in the execution, whereas in other cases we carry a facilitator role.

One the solution is developed and organically integrated, we provide that it does not have a one-time impact, but continues to be efficient in the future as well. To achieve sustainability we provide that the human dimension is ready, knowledgeable, and engaged with the newly acquired solution.

Here are some examples of our solutions

• Facilitation in Strategic Executive Decision-Making process
• Group Coaching for assisting Managers struggling of identical or similar challenges
• Individual Coaching
  • Developmental Coaching for Managers to improve their performance in their current jobs
  • Transitional Coaching for Managers handling change processes
  • Transformational Coaching to prepare Managers for future roles
• Corporate solutions for coping with challenges of Transformation and Change
• Increasing Self, Others and Environmental Awareness
• People Assessment for Career
• Study and improvement of Engagement