Effectiveness of the Turkish Corporate Governance System: Ceo Changes and Performance Measures

The aim of the current study is to investigate the effectiveness of the Turkish corporate governance system. To reach this aim, the paper first discusses the corporate governance system of Turkey briefly. The measures of effectiveness of a corporate governance system are formulated and CEO turnover is used as a measure. The effectiveness of the Turkish corporate governance system is analyzed by utilizing data from the Istanbul Stock Exchange (ISE) companies. CEO turnover and corporate performance measures are used as dependent and independent variables, respectively, in the logit regressions. Size included in the analysis as a control variable. The evidence suggests that the Turkish corporate governance is not ineffective, but it should immediately be noted that this evidence can not be interpreted as it being effective. The CEOs in Turkey are evaluated based on the pretax income which may be a reflection of a corporate governance system that can be characterized by being bank based, having concentrated ownership structures and low investor protection.