CONCEPT OF COMPLIANCE

    An English word “compliance”, which means “to obey, to consent” “to comply (with)” verb, which is translated as “conformity, compatibility” (1). In the doctrine and some foreign jurisdictions, this type of liability is defined as “Regulatory Compliance (Yasal Uyumluluk)” is also used. This concept implies that the legal requirements have been met. Legality here refers to compliance with both primary and secondary rules in the legislation. In the doctrine, the concept is interpreted in a broad sense, and companies that have “corporate governance principles/standards” and have declared a “declaration of compliance” are now responsible for the consequences of non-compliance, and the managers are also responsible for the consequences of non-compliance. compliance responsibility may be impose

    Besides all this compliance concept also refers to entrepreneurial and organizational strategies that prevent the violation of rules and avoid responsibility. In this respect compliance concept is a kind of preventive law mechanism (3). As a result complianceis the avoidance of liability by a business with the best possible organization, taking the minimum actions for compliance (4).

     

    PURPOSE OF COMPLIANCE

    Compliance The concept does not only define a type of responsibility of managers, but in a broad sense refers to the measures taken, organizations established and services provided to avoid this responsibility.  Compliance's primary objective is to prevent compliance risks. It has two objectives in line with this purpose. The first is to bring the actions of company bodies and employees into compliance with the law. The second is to prevent significant violations such as civil and criminal liability and loss of company reputation by the company and its governing body. Compliance, prevent or mitigate the risk of violations of regulations, standards or codes of conduct leading to legal sanctions, financial losses and reputational damage (5).

     ComplianceIn addition to its preventive function, one of its main objectives is to overcome the crisis in the event of a possible violation. Compliancerefers to both a system that prevents violations of the law and a crisis management organization (6).

    COMPLIANCE OBLIGATION UNDER TURKISH LAW

    Turkish Law compliance responsibility and compliance There is no direct provision regulating the establishment of a compliance organization. The obligation to establish a compliance organization is derived from Article 375/1-e of the TCC titled “Inalienable duties and powers” and Article 369/1 of the TCC regulating the “Duty of care and loyalty” of the board of directors. The legal management and representation body of a joint stock company with legal personality is the board of directors. compliance The board of directors is also responsible for the establishment, implementation and supervision of the organization (7). Article 375/1-3 of the TCC does not distinguish between public or closed companies (8).

    The board of directors is liable for unlawful transactions in the company pursuant to Art. 549 et seq. of the TCC. Company's non-compliance A practice that falls within the scope of the management and/or representation of the company shall, as a rule, be within the scope of duty of the board of directors. Pursuant to Art. 553/1 TCC, the violation of a legal regulation that covers the company may be sufficient for the liability of the members of the board of directors (9).

    In the Turkish legal doctrine, the effect of the delegation of representation authority to the executive members on the joint and several liability of the non-executive members of the board of directors is controversial. One view is that the company non-compliance The court has argued that the members of the board of directors may be liable pursuant to Article 553/1 of the TCC for their acts; however, in the event that the duty and authority regarding the act in question is delegated to an executive director or a non-executive director, the joint liability of the members of the board of directors shall cease pursuant to Article 553/2-3 of the TCC (10). Another opinion, on the other hand, argues that the non-transferable superior supervision obligation of the members of the board of directors belongs to the board of directors as a board body, and the supervision belongs to the individual members of the board of directors due to fault liability (11).

    In Turkish Law, effective supervision and regulation is available for publicly traded companies. In fact, the Capital Markets Board issues regulatory administrative procedures and audits whether public companies comply with corporate governance principles. In this regard, Article 1529/1 of the TCC and Article 17 of the Capital Markets Law are the clearest provisions on the compliance and supervision of companies with corporate governance principles (12).

     

    EXAMPLES OF COMPLIANCE IN THE WORLD

    In recent years, the world has witnessed a spate of corporate violations of competition law, corruption, banking violations and money laundering. Corruption, bribery and manipulation cases against many famous companies operating on a global scale such as ABB, Siemens and Volkswagen have attracted public attention in the past. The European Commission fined Google €2.4 billion in 2017, €4.34 billion in 2018 for violating EU antitrust rules, and €1.49 billion in 2019 for abusing its market dominance, totaling €8.23 billion in three years (13). Individuals who were managers of the company in the years when these fines were imposed compliance sorumluluğu gündeme geleceğine şüphe bulunmamaktadır.

    Companies may be required to comply with many different regulations depending on their field of activity. It is often impossible for even the most qualified manager to keep track of all of them. In order to protect themselves from serious sanctions and damages and to prevent damage to their reputations, it is of great importance for companies and managers to get help from expert lawyers and to manage compliance processes.

     

    SOURCE

    1. Paslı, Ali, “The Meaning of the Concept of Compliance in Joint Stock Company Law and Its Effect on the Liability System, IÜHFM, C. 71, S. 2, Y. 2013, p. 317.
    2. Paslı, s. 318-319.
    3. Pulaşlı, Hasan, Complianve Concept and Compliance Liability of the Governing Body, BATİDER, C. 35, S. 2, Y. 2019, p. 32; Paslı, p. 321.
    4. Pulaşlı, s. 32.
    5. Pulaşlı, s. 34.
    6. Pulaşlı, s. 34.
    7. Pulaşlı, s. 53.
    8. İsviçre Federal Mahkemesi'nin 24.03.2011 tarihli, IN_41/2011, I. Öffentlich-rechtliche Abteilung. Karar için bkz. Pulaşlı, s. 55 – 56.
    9. Paslı, s. 332.
    10. Paslı, s. 332.
    11. Pulaşlı, 58; Bkz. Yargıtay 11. HD, K.T: 07.10.1994, 1994/5009 E. 1994/7236 K.
    12. For detailed information, see Yaşar, Tuğçe Nimet, Şirketler Hukuku Açısından “Compliance” Kavramı ve Borsaya Kayıtlı Şirketlerde Uygulaması, PhD Thesis, Ankara 2018, Ankara University Institute of Social Sciences, p. 336 et seq.
    13. Pulaşlı, s. 30.