Evaluation of the Concept of Whistleblowing in Turkish Company Law from A Comparative Corporate Law Perspective
Meltem Karatepe Kaya, Ekrem SolakIndividuals who report illegal activities, abuses, corruption, or unethical practices within an organization to the relevant authorized unit within the organization, applicable administrative body, or the general public are considered whistleblowers. In several cases, whistleblowers prevent illegal activity in corporations by informing the public and appropriate administrative entities; however, the significance of whistleblowers in company law has not been recognized. In particular, the whistleblowers’ actions in corporations are severely limited due to the absence of a legal protection system for whistleblowers. Today, to prevent this problem, many countries have implemented legal regulations on whistleblower activities within the company. In the wake of the Enron and WorldCom scandals in the United States, for instance, the significance of whistleblower protection was recognized. Moreover, the Sarbanes–Oxley Act and the Dodd–Frank Act, which were enacted subsequent to the 2007–2008 financial crisis, respectively, incorporated provisions for safeguarding the whistleblowers. Similarly, the Public Interest Disclosure Act was adopted in the United Kingdom in 1998. In addition, the European Union adopted the European Union Notification Directive No. 2019/1937 in 2019 to regulate and protect whistleblowers in the commercial and public sectors. However, no law in Turkey guides the recognition of unlawful violations and the protection of whistleblowers by implementing a whistleblowing system in companies. Therefore, first, this article will establish the theoretical basis underpinning whistleblowing in the context of corporate governance and compliance. Second, the role and significance of whistleblowing in comparative law and the lessons that can be applied in Turkish law will be addressed. Finally, evaluations of the Turkish corporate law provisions about whistleblowing will conclude the paper, suggesting that incorporating whistleblowing mechanisms into Turkish corporate governance frameworks could potentially aid in minimizing corporate abuses and wrongdoing.
İhbarcılık Kavramının Karşılaştırmalı Hukuk Işığında Türk Şirketler Hukuku Kapsamında Değerlendirilmesi
Meltem Karatepe Kaya, Ekrem Solakİhbarcılar, genel olarak bir organizasyon çatısı altındaki hukuka aykırı eylemleri, suiistimalleri, yolsuzlukları veya etik dışı işlemleri, organizasyon içindeki yetkili birime, ilgili idari kuruluşa veya kamuya bildiren kişi olarak tanımlanmaktadır. İhbarcıların kamunun ve ilgili idari kuruluşların haberdar olmasını sağlayarak şirketlerdeki hukuka aykırılıkları önledikleri birçok örnek bulunsa da ihbarcılar şirketler hukukunda hak ettiği değeri görmüş değildir. Özellikle ihbarcılar için kanuni bir koruma mekanizmasının bulunmaması nedeniyle şirketlerde ihbarcı faaliyetleri oldukça kısıtlanmıştır. Günümüzde bu sorunun önüne geçebilmek adına birçok ülkede ihbarcıların şirket içerisindeki faaliyetlerine yönelik hukuki düzenlemeler mevcuttur. Örneğin, Amerika Birleşik Devletleri’nde Enron ve WorldCom skandallarında ihbarcıların önemi anlaşılmış ve akabinde kabul edilen Sarbanes-Oxley Yasasında ve 2007-2008 finansal krizinden sonra kabul edilen Dodd-Frank Yasasında ihbarcıların korunmasına ilişkin düzenlemelere yer verilmiştir. Benzer şekilde Birleşik Krallık’ta 1998 yılında Kamu Yararına Aydınlatma Kanunu (Public Interest Disclosure Act (PIDA)) yasalaşmıştır. Avrupa Birliği de 2019 yılında özel ve kamu sektörlerinde ihbarcılığın düzenlenmesi ve ihbarcıların korunması amacıyla 2019/1937 sayılı Avrupa Birliği İhbarcılık Direktifini kabul etmiştir. Belirtmeliyiz ki, ülkemizde ihbarcılık mekanizmasının şirketlerde işletilerek hukuka aykırılıkların tespitine ve devamında ihbarcıların korunmasına yönelik bir düzenleme bulunmamaktadır. Çalışmamızda, ilk olarak, ihbarcılık kavramının teorik altyapısı kurumsal yönetim ve uyum (compliance) bağlamında açıklanacak, sonrasında kavramın karşılaştırmalı hukuktaki yeri ve önemi incelenerek Türk hukuku bakımından alınması gereken örnekler tespit edilecek ve son olarak da ihbarcılığa Türk kurumsal yönetim yapılarında yer verilmesinin şirketlerde gerçekleşen suiistimalleri ve hukuka aykırılıkları azaltabileceğinden bahisle Türk şirketler hukukunda ihbarcılık düzenlemesine ilişkin değerlendirmeler sunulacaktır.
The failure of major corporations such as Enron, Tyco, and Lehman Brothers in the past 25 years due to corporate misconduct has caused an examination of the company’s corporate management. It is widely acknowledged that corporate misconduct contributes to global crises. The estimated economic repercussions of the 2007–2008 financial crisis is $17 trillion. Corporate misconduct substantially influences the global economy, highlighting the need for strong corporate governance. The current financial crisis has demonstrated that the interconnection of global corporations can affect multiple nations’ economies concurrently, and physical borders alone cannot be relied upon to safeguard national economies.
Given that the adverse impacts of corporate abuses affect beyond the firm itself to encompass a wide range of stakeholders, such abuses must be exposed before they produce a crisis. Therefore, stakeholders must promote the transmission of information by activating the “whistleblowing” mechanism within the organization. This is one of the strategies established to avoid abuses, corruption, and mismanagement in companies.
Whistleblowers effectively fight against corruption, international crime, and environmental degradation worldwide. Because of their connections or positions, whistleblowers can easily obtain clear information on internal business fraud. According to the breadth of our research, over the last decade, whistleblowing has developed into a crucial instrument for corporate management, decreasing agency costs and in-house audits. Consequently, the result of whistleblowers as instruments for detecting and preventing corruption, abuse, and other forms of misconduct is widely recognized. Reported abuses often include breaches of the law, corruption, bribery, or activities that endanger public health or safety.
Whistleblowing has been controlled in several legal systems and international conventions because of its relevance. For instance, 44 nations, including Turkey, ratified the “Convention on the Prevention of Bribery of Foreign Public Officials in International Business Transactions,” established by the Organization for Economic Cooperation and Development (OECD). In addition, following Article 7 of the 2016 “Recommendation on Development Cooperation Actors in Managing the Risk of Corruption” by the OECD, the necessary measures must be taken to establish whistleblowing and protect certain whistleblowers. Another example is the United Nations Convention Against Corruption. The Anti-Corruption Convention was drafted between January 21, 2002, and October 1, 2003, and it became effective on December 14, 2005. This treaty had 188 signatories, including the Republic of Turkey, as of August 11, 2021. Individuals who make a report are protected by Article 33 of this treaty.
In several cases, whistleblowers prevent illegal activity in corporations by informing the public and appropriate administrative entities around the world, but the importance of whistleblowers in company law has not been recognized in Turkey. Moreover, no regulation exists regarding the protection of whistleblowers and the identification of unlawful violations through the use of a whistleblowing mechanism. However, as elucidated in our article, legislation safeguarding whistleblowers was incorporated into the Sarbanes–Oxley Act and the Dodd–Frank Act in the United States after the Enron and WorldCom scandals (2007–2008). The Public Interest Disclosure Act in the United Kingdom was similarly enacted in 1998. In addition, the European Union adopted the European Union Notification Directive No. 2019/1937 in 2019 to regulate and protect public and private sector whistleblowers.
This article explores the role of whistleblowers in promoting corporate governance and preventing internal misbehavior. According to our research, the successful application of whistleblowing in corporate governance will contribute to the long-term viability of Turkish companies and, eventually, the country’s economy. Furthermore, although there is no law regarding direct whistleblower activities in companies in Turkey, this article also examines the situation and responsibilities of the members of the board of directors and/or compliance officers in the face of possible whistleblowers within the framework of current TCC provisions.