Prof. Dr. Nakiye Boyacıgiller

Dean, School of ManagementSabancı University

Prof. Dr. Nakiye Boyacıgiller

Dean, School of ManagementSabancı University

Candace JohnsonGBRW Coordinator

&Member of Sabancı University International

Board of Overviewers

Toward a better Corporate Governance for the 21st Century

Candace JohnsonIndependent Women Directors Conference 13/12/12

Agenda

• A few anecdotes from personal experiences on Boards and getting on Boards

• The European Business School/Women on Boards Project

• The Global Board Ready Women searchable database administered by the FT Non Executive Club on LinkedIn with BoardEx

• The Independent Women Director’s Project• The ABC’s of Realizing your Dreams

The SES Board 1988

SES/ASTRA – SES/GLOBAL

• First private TV satellite in Europe ( 1983-1985 )• Monopoly Breaking• Happy Day ( Ann Glover)• The Digital Revolution – Takeover (1993 – 1994)• SES Global (1997/1998 – 2000 )

Being at the top is slippery and dangerous. You must constantly go

Forward and be smarter, quicker, more innovative. Or… you can

Sell out.

Think Big ! The world is yours

• You discovered a way to destroy hunger throughout the world?

• You developed a system to educate the world’s poor?• You implemented a plan to put to work every man

and woman on the planet and to have them remunerated for their work?

• You found a way to provide low cost energy for everyone in the world?

• You found a universal vaccine?

Case Study: SES Global – • Advantages of having no home market – Societe Europeene

des Satellites – SES• Within 8 years of 1st satellite launch – No. 1 in Europe, No. 3 in

the world with IPO• Everyone was happy – except for me !• Sitting Duck for Hostile Take Over, throwing off cash, eat or be

eaten !• The “vision” thing – the next horizon. Becoming No. 1 and

Staying No. 1• Everyone was mad at me – but I was the spirit• 1997 – 2001/2007 – Recognition/Arcelor Mittal

The most dangerous woman in Europe! What goes around comes around

• Keeping true to the vision• Never give up, Never accept no, Never go away –

even when others want you to.• Alone in the Wilderness• More frightened than any time in my life – of the

consequences• Went to the press• Had protectors• Didn’t give in and didn’t give up !

Case Study: Teleport Europe

• 1991 – Opportunity to create European-wide networks for the new enlarged Europe

• Germans, French, Brits – The Germans could only think of how to get the French and Brits out !

• We won all European Wide Networks – had to fight all the national monopolies to do so

• Loral bought 99 % - I still own 1 % !• 100 % American but now totally global –

Serendipity – Hawaii Teleport !

Case Study: Europe Online I – III – 1993- 1996/1998 - 2002

• World’s first Internet-based online service and World’s first Broadband Service – Cloud, Streaming, Downloading, Chatting, VoIP all in one!

• Pearson/Matra-Hachette/Burda/ATT• AOL wanted to buy 40 % - Shareholders said no!• Went Bankrupt/CJ bought not once, but twice !• URL, Patent

IRIDIUM – 1994/1996, 2000 and Today

• World’s first Mobile Satellite Telephony• Beautiful, global concept• Greed • Terrible Business Plan• Went belly-up and I went back to help in 2000

For 9/11 and Katarina, the only communications that

worked. Today is profitable.

Global Telecom Women’s Network - 1993

• The changing culture of communications• Women at the Top then and now – Janice Hughes, Bridget

Cosgrave, Ann Glover, Julie Meyer• Best Business Practices across sectors and countries• Networking, networking, and networking• Vodafone sponsored 10th Anniversary at the ITU with 182

young Telecom Women Entrepreneurs in 2003• At the 3GSM, Qualcomm-sponsored event with new global

applications for Africa and best practices from Asia - WOW• - At 3GSM Asia, the GTWN joined with the GSMA to rid the

world of the Digital Divide

European Business Schools/Women on Boards initiative

• Call to Action• Selection Criteria• Lists of Board Qualified Women• European Initiative has now become Global

GBRW Selection Criteria

• Every application to this closed group is formally assessed and reviewed and only those women who meet the criteria below are accepted. Business Schools and Professional organizations have applied the same criteria for their participating Alumnae and Members. All women on the list must have at least 5 years’ experience in 1 or more of the following roles:

• Chair and/or NED of listed/private corporations• CEO, COO, CFO or other C-suite exec/director level in

listed/private corporations

GBRW Selection Criteria

• Family member and controlling shareholder of boards of large family companies

• Director of government agencies• Director of non-profit orgs• Institutional investment community senior professional• Professional firms senior partner serving boards and

their committees as clients• Leading Academics with relevant experience• Entrepreneur

Independent Women Directors project

• 200 identified women• For boards in Turkey and throughout the

world• A new corporate governance• Transparent• Global• Excellent

The ABC’s of Realizing your Dreams

• A -void negative sources, people, things and habits.

• B -elieve in yourself. • C -onsider things from every angle. • D -on't give up and don't give in. • E -njoy life today: yesterday is gone and

tomorrow may never come. • G -ive more than you planned to give. • H -ang on to your dreams. • I -gnore those who try to discourage you. • J -ust do it! • K -eep on trying, no matter how hard it seems. It

will get better. • L -ove yourself first and foremost. • M -ake it happen. • N -ever lie, cheat, or steal. Always strike a fair

deal.

• O -pen your eyes and see things as they really are.

• P -ractice makes perfect. • Q -uitters never win and winners never quit. • R -ead, study and learn about everything

important in your life. • S -top procrastinating. • T -ake control of your own destiny. • U -nderstand yourself in order to better

understand others. • V -isualize it. • W -ant it more than anything. • X -ccelerate your efforts. • Y -ou are unique of all of Nature's creations.

Nothing can replace you. • Z -ero in on your target, and go for it!!

Going beyond Ideas - Making Global Impact

• Energy – Haves and Have Nots• Environment• Illness and Poverty• Illiteracy• What are your ideas to Save the planet and the

universe?• What is your business plan?• What are the measurable value created?

You can Do IT!

The Power of Believing

• The Power of Believing• Having the confidence to believe • Do not delude yourself or others

BELIEVE and JUST DO IT!

Video Message

Daniela Bankier

European CommissionDirectorate-General for JusticeHead of Unit Gender Equality

Torkel Stiernlöf

Consul GeneralConsulate General in Istanbul, Sweden

Caroline Sundewall• Current board assignments: Lifco AB, Pågen Group, Chairman of Svolder

(listed), Tradedoubler (listed), Mertzig Asset Management, Södra Skogsägarna, Södra Cell AB, Chairman of the Swedish Business Tennis Foundation, Streber Cup

• Previous board assignments: TeliaSonera (listed) 2001-2010, Strålfors (listed) 2003-2009, Swedbank (listed) 2005-2008, AB Electrolux (listed) 2005-2011, SJ AB (state owned) 2010 -2011

• 1980-1985 Banking experience, Corporate Finance and Export Credits, in London and Stockholm

• 1986-1989 Commentator and Analyst at leading financial newspaper and magazines

• 1990-1992 Business Controller at the listed investment company Ratos• 1992- 2001 Business Commentator at several different papers as well as

Swedish National TV and Radio• Since 2001 own business specialized in board assignments, strategic

management consulting & communication

Melsa Ararat, PhD

Sabancı UniversityDirector of Corporate Governance Forum

and Independent Women Directors Project

Independent Women Directors

December 13, 2012

WOMEN ON THE BOARDS OF TURKEY’S LISTED CORPORATIONS

Melsa Ararat, PhD School of Management

WOMEN ON BOARDS AROUND THE WORLD

Source: Kimberly Gladman and Michelle Lamb, GMI Ratings’ 2012Women on Boards Survey(GovernanceMetrics International, 2012)

Hong Kong Thailand

China Australia

New Zealand Malaysia

SingaporeTaiwan

India Indonesia

South Korea Japan

9.00%

8.70%

8.50%

8.40%

7.50%

7.80%

6.90%

6.10%

5.30%

4.50%

1.90%

0.90%

Percentge (%)

WOMEN ON BOARD IN ASIA

USA

Canada

Mexico

Brazil

Chile

16.10%

10.30%

6.80%

5.10%

1.90%

Percentage (%)

WOMEN ON BOARD IN AMERICA

Israel

Kuwait

Bahrain

Qatar

16.50%15.80%

2.70%2.30%

1.00%0.80%

0.30%0.10%

Percentage (%)

WOMEN ON BOARD IN MIDDLE EAST-AFRİCA

WOMEN ON BOARDS IN EUROPE

Source: Kimberly Gladman and Michelle Lamb, GMI Ratings’ 2012Women on Boards Survey (Governance Metrics International, 2012)

Norway Sweden Finland

United KingdomNetherlands

DenmarkFrance

Germany Poland Turkey Ireland

Spain Greece

Switzerland BelgiumAustriaRussia

Italy Portugal

40.10%27.30%

24.50%15.00%

14.00%13.90%

12.70%11.20%

10.80%10.80%

9.50%9.30%

8.80%8.70%

7.70%7.50%

5.90%3.70%

2.30%

Percentage (%)

WOMEN ON BOARD IN EUROPE

TRENDS IN BOARD DIVERSITY IN EUROPE

2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

10

20

30

40

50

60

70

80

90

100

8.5 9 9.8 9.7 10.3 10.7 10.9 11.8 13.6 13.7

Women Men

CHANGE IN WOMEN BOARD MEMBERSHIP IN EUROPE (%)

Source: European Commission, Database on women and men in decison making

WHY BOARDS LACK FEMALE TALENT

• Supply deficiencies• Taste based discrimination • Occupational segregation • Statistical(error based)discrimination

WHY WOMEN ON BOARDS

• Market value and earnings quality• Social Welfare (sustainable and equitable growth) • Human Rights and Justice

SCIENTIFIC EVIDENCE on PERFORMANCE• Gul, Srinidhi and Tsui (2008) ve Srinidhi, Gul and Tsui (2011):

Boardroom gender diversity is positively related to audit effort and earnings quality.

• Adams , Gray, Nowland (2011): Market reaction to female appointees is, on average, positive and significant. The average reaction for female appointees is roughly 2 percent higher than for male appointees after controlling for other appointee characteristics, such as independence, expertise and qualifications. CAR: %2

• Dreber and Johannesson ( 2008); Women were found to lie less frequently than men in order to secure monetary pays

• Adams and Ferreira (2009): Female directors have better attendance behavior at board meetings and male directors have better attendance behavior when boards are diverse

• Kristof (2009) Financial firms are particularly male-dominated and suggests that this may have contributed to the recent poor performance of banks • Adams and Ferreira (2009)

Firms with more monitoring needs may benefit more from female director appointments

SCINTIFIC EVIDENCE ON FIRM BEHAVIOUR

• Adams and Funk (2011): Female directors differ significantly from male directors in survey measures of human values and risk aversion • Adams, Licht and Sagiv (2011) , Female directors are more stakeholder-oriented than male directors • Cohen and Huffman (2007) Gender wage gap for non-managerial workers is lower the greater the representation of women in management • Tate and Yang (2011) An important externality of female corporate leadership is better workplace conditions for women • Andreoni and Vesterlund (2001),Niederle, Segal and Vesterlund (2008), Hogarth,

Karelaia and Trujillo (2011): Women are generally more risk averse, less keen on being exposed to competition, and more altruistic when altruism is expensive

SU SOM RESEARCH on TURKEY

• Ararat, Orbay, Yurtoglu (2011): Independent directors (independence based on company statement) has a negative affect on financial performance

• Ararat, Aksu, Tansel (2012): Board diversity index (gender, nationality, age, education) is positevely correlated with financial performance through better monitoring

CMBT REGULATIONS ON BOARD DIVERISTY AND INDEPENDENCE

Communiqué: 30 December 2011 ve 11 February 2012; Series IV, No: 56 ve 57

Changes in the Corporate Governance Principles• Listed corporations are required to have at least 1/3 independent board members• Listed corporations should have at least one woman on their board or explain why they don’t and what measures they have taken to complywith the principle

WOMEN – MEN BOARD MEMBERSHIP

In ISE Companies 88% of the board members are men where only 12% are women.

Currently among 2766 board members only 320 of them are women.

According to these data; there is 0,77 women board member for each company.

2446

320

WOMEN –MEN BOARD MEMBERSHIP (numeric)

Men

Women

88%

12%

WOMEN -MEN BOARD MEMBERSHIP (%)

Men

Women

FIRMS WITH WOMEN ON THE BOARD

Number of firms with at least one women on the board is 218. Number of firms without any women on the board r is 194.

218194

FIRMS WITH WOMEN BOARD MEMBER (NUMERIC)

Firms Having Women Member

Firms Without Any Women Member

DISTRIBUTION OF FEMALE BOARD MEMBERS

In ISE companies, 56% of the female board members are either family member or shareholder or both. 28% of the female board members are executives either in the company or in the group companies. 16% is independent board members.

There is 0,13 independent female board member for each company.

56%28%

16%

DISTRIBUTION of women board members (%)

Family member/Shareholder

Executive in the com-pany or group companies

Independent member

52

90178

dISTRIBUTION OF WOMEN BOARD MEMBERS (NUMERIC)

Family member/Shareholder

Executive in the com-pany or group companies

Independent member

RATIO OF WOMEN on BOARDS

Among all ISE companies, ratio of women family member/shareholder is 6.44%, ratio of executive women either in the company or the group companies is 3.25% and ratio of independent women members is 1.88 %.

Independent member Executive in the company or group

companies

Family member/Shareholder

1.001.88 3.25 6.44

RATIO OF WOMEN MEMBERS in ALL ISE COMPANIES (%)

WOMEN ON BOARD COMMITTEES

In ISE 38% of female board members (123 member) is also a committee member.

62% of the women are not a member of a committee.

Women in Corporate Governance Committee is 65, in Audit Committee is 54 and women in other committees are 45. One women can be a member of more than one committee.

38%

62%

COMMITTEE MEMBERSHIP OF WOMEN DIRECTORS

Women Member In Committees

Women Not In Committes

Women in Cor-porate Gov. Commiteee

Women in Audit Committee

Women in Other Committees

010203040506070

6554

45

WOMEN DIRECTORS' DISTRIBUTION OF COMMITTEE MEMBERSHIP

INDEPENDENT MEMBERS IN ISE COMPANIES

In ISE companies, number of independent board members are 673. 24,33% of the board members are independent.

Among the independent members 52 (7,73%) of them are women where 621 (92,27%) of them are men.

621

52

INDEPENDENT MEN-WOMEN DIRECTORS (NUMERAL)

Independent Men Directors

Independent Women Directors

92.27%

7.73%

INDEPENDENT MEN-WOMEN DIRECTORS (%)

Independent Men Directors

Independent Women Directors

TREND OF WOMEN BOARD MEMBERS IN ISE 100 COMPANIES

In ISE 100 companies, women board member ratio changes in yearly basis. In 2008 and 2009 women board member ratio is %10.10 , in 2010 the ratio increased to 11.20 and in 2011 women ratio is increased to 12.30. But in 2012 women ratio decreased to 10.02.

2008 2009 2010 2011 20120

4

8

12

16

10.10 10.1011.20

12.30

10.02

TREND OF WOMEN BOARD MEMBER RATIO IN ISE 100 COMPANIES (%)

TREND OF WOMEN BOARD MEMBERS IN ISE 100 COMPANIES

In ISE 100 companies, number of women board member changes in yearly basis. In 2008 and 2009 number of women board member is 53, in 2010 this increased to 57 and in 2011 increased to 58. But in 2012 number of women board members decreased to 54.

2008 yılı 2009 yılı 2010 yılı 2011 yılı 2012 yılı48

52

56

60

53 53

5758

54

TREND OF WOMEN BOARD MEMBERS IN ISE 100 COMPANIES (NUMERAL)

WOMEN IN ISE 30 COMPANIES

In ISE 30 Index companies 20 have at least one female board member. 10 of the index companies have no women on their boards.

Source: Publicly disclosed information, company web sites and KAP – Public Disclosure Platform.

ISE 30 COMPANIES WITH ALLMALE BOARDS

• AKSİGORTA • ASYA KATILIM BANKASI • İHLAS HOLDİNG • KARDEMİR • MİGROS• PETKİM • TÜRK TELEKOM • T. GARANTİ BANKASI • T. HALK BANKASI • T. VAKIFLAR BANKASI

20

10

WOMEN DIRECTORS IN ISE 30 COMPANIES (NUMERAL)

Companies having women directors

Companies without women directors

IWD ADVISORY BOARD MEMBERS

NUR GER

ÖZLEM DENİZMEN

NERİMAN ÜLSEVER

FÜSUN AKKAL BOZOK

AYŞEN SAVCI TAYFUN BAYAZIT

AYŞE YÜKSEL

GÜLDEN TÜRKTAN

ÜMRAN BEBA PİRAYE ANTİKA

LEYLA ALATON

NAKİYE BOYACIGİLLER

LEYLA ŞEN

MELSA ARARAT VAHAP MUNYARHALE TURGAY ORUÇ

Murat Yeşildere

Egon Zehnder InternationalHead of Istanbul Office